Wages, inflation and COVID make quite the cocktail
New data released by the Bureau of Stats shows why many Aussies are coming up short each week. Wages grew 0.7% between January-March taking the annual rate to 2.4% – that’s well behind the 5.1% rise in prices over the same period. And just as we’re being encouraged to embrace ‘COVID-normal’ and get back to work/leisure/life, case numbers remain stubbornly high.
WHAT DOES THAT ALL MEAN?
It underlines that things remain tricky for the Aussie economy as we transition out of COVID. Wages are growing – but at a rate that’s slower than the average of 3.1% recorded since data started being published in 1998. Given analysts reckon a small proportion of workers in “market sensitive” occupations are getting large pay rises, it’s clear that not all workers have had that pay bump. But inflation is high, and that’s eroding our standard of living. “The disconnect between wage growth and inflation would be devastating for household budgets across the country,” economist Callam Pickering says. And if that’s not enough, COVID isn’t done with us yet… Last week, Oz was a world leader in per-capita COVID infections, and there are continuing disruptions to schooling, health services, sport, and workplaces across the country. Note: there are currently more than 380,000 active cases in Australia, according to yesterday’s update.
HOW DOES THIS END?On wages growth, PM Scott Morrison says if we keep the economy chugging along and unemployment low, pay packets will be fatter in about 18 months. In the meantime, there’s the government’s measures to help with cost of living pressures. And he pledged not to return to pandemic-era lockdowns. “I will not drag Australia back to those times again, and I have noticed that Anthony Albanese is keen to get back to that type of approach,” he claimed. In response, the Labor leader said yesterday’s wage figures were a product of the PM’s mismanagement. “Australian workers are paying the price for a decade of bad policy,” he said. He also vowed to establish a national strategy to better deliver information about COVID to a pandemic-weary population and said the virus is still a “major issue”.
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