Australian wage earners seem to be singled out in the developed world for exclusion from the benefits of the current global economic boom.
Wednesday’s figures from the Bureau of Statistics (ABS) confirmed that wages grew through 2016-17 by just 1.9 per cent. This was the lowest for any financial year since the series began in 1997.
That matched the inflation rate through the year of 1.9 per cent exactly, making it only the second time wages for a full financial year have failed to outpace inflation outside a severe global recession. The first was in 2014 during the first year of the Abbott government.
Even through the global financial crisis, 2008 to 2012, wages rose faster than the cost of living for every year except 2008 (when the difference was just -0.1 per cent) and 2010 (when wages and inflation were matched at 3.1 per cent).
In 2016-17, wages in the private sector grew just 1.8 per cent, well below the rate for the smaller number of public sector workers. This means the majority of workers actually copped a real wage cut through 2016-17.
Instead of being near the top of world tables for wage rises for employees, where it has been historically, Australia is now languishing. Of the 24 developed countries which disclose annual wage rises, Australia now ranks 15th – well down in the bottom half.
Of the 24 countries with data available, only eight have wages rising at or below the inflation rate. This is the first time in Australia’s history wage earners have missed out so badly on a share of the nation’s extraordinary income growth.
Wages are rising in Iceland and Poland – where governments serve all sectors – at 6.0 per cent with inflation at 1.8 per cent and 1.7 per cent respectively.
They are rising in Estonia at 7.0 per cent with inflation at 3.6 per cent. Wages are rising in Slovenia at 3.36 per cent with inflation at 1.0 per cent.
Stark contrast to profits boom
On the same day the ABS released the dismal wages data, online stock broker Commsec advised its clients that:
- CSL Limited posted a 7.6 per cent lift in full year net profit to $1.69 billion. Revenue from sales jumped 12 per cent to $8.35 billion. CSL declared a final dividend of $0.91 a share – up 5 cents on last year
- Woodside Petroleum reported a 49 per cent rise in first-half net profit to $639 million, and said it would pay an interim dividend of $0.62 a share, 44 per cent higher than last year
- Fairfax Media’s net profit came in at $83.9 million compared with a loss of $773 million last year
- Shopping centre operator Westfield reported a 20 per cent jump in first half net profit to $743 million, with revenue climbing 18 per cent to $1.25 billion
- Stockland posted a 34 per cent full year net profit rise to $1.2 billion.
The latest ABS figures show booming profits across all sectors. Total gross profits for the first quarter of 2017 were a staggering $82.6 billion. That is up an impressive 39.7 per cent on the $59.1 billion recorded in the first quarter of 2016. (We will have year end figures in early September, which are expected to show a similar lift for the full financial year.)
All other indicators – including the record number of million-dollar homes – confirm the big corporations and the rich individuals are doing very nicely indeed.
Wage rises might not be such cause for frustration and anger if this was the only area where Australian workers were missing out on the current global boom. But it appears not.
As The New Daily has reported recently, Australia appears to be out of kilter with the rest of the developed world on public debt, jobs, underemployment, household debt, wealth inequality and income inequality.
Australian corporations, especially the big multinational companies, may be doing exceptionally well.
But regular working people seem to be struggling.