Wednesday’s Q1 2025 wage price index from the ABS recorded a slight rebound, with wages growing by 0.9% over the quarter and by 3.4% annually:
Public sector enterprise agreements drove the rebound in wages. These drove more than half (54%) of the total quarterly wage increase.
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Actual wages remained within the gutter, monitoring 6.1% beneath their Q2 2020 peak when deflated by headline CPI and three.6% beneath the Q2 2021 peak when deflated by underlying CPI.
Actual wages deflated by headline CPI had been monitoring at round This fall 2011 ranges, whereas they had been monitoring at round Q1 2012 ranges when deflated by underlying CPI.
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Deflating the wage value index towards the ABS’s worker value of residing index makes the state of affairs far worse.
Utilizing this measure, actual wages in Q1 2025 had been monitoring 10.2% beneath the Q2 2020 peak at round Q1 2012 ranges.
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The RBA’s newest Assertion of Financial Coverage projected a sluggish rebound in actual wages.
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By Q2 2027, actual wages deflated by headline CPI will nonetheless be 5.9% beneath their peak, monitoring round This fall 2011 ranges.
Worse, extrapolating from the RBA’s projection means that actual wages might not recuperate to their earlier peak till about 2040.
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Australians will bear the results of the post-pandemic value of residing disaster for a few years.
We might lastly have received the conflict towards inflation. Nonetheless, this doesn’t imply that monetary circumstances will rebound shortly for Australian households.
The restoration from the recession shall be sluggish and unsightly.
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