Smallest wage increase on record

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Australian workers have benefited from an unprecedented annual wage increase in the past fiscal year, reports Alan Austin.

AUSTRALIA HAS ALWAYS rewarded workers with steady year-to-year pay increases, as industrial cooperation and improved productivity have generated ever-increasing corporate profits.

That is to say until 2013, when the current coalition government came to power.

In the next eight years, wage increases fell to a new all-time low six times, the most recent at an appalling 1.71%, according to data last week.

The Australian Bureau of Statistics (ABS) started recording salary levels across Australia in 1997. Until 2013, the annual increase ranged from 2.84% to 4.16%. The average was 3.54% healthy.

It compares well with other countries. Over the same period, wage increases averaged 3.4% in Sweden, 3.2% in Great Britain, 2.4% in Italy, 2.3% in Canada and the Netherlands and 1.3% % in Swiss.

This has now radically changed. The policies of the coalition government have seen wages plummet while profits soar.

From 1997 to 2013, the lowest recorded wage increase was 2.96% until June 2013, as economies around the world emerged from the Global Financial Crisis (GFC). The next eight years under the coalition all saw wage increases lower than the lowest recorded by a previous government.

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Majority of Australian workers are much poorer

The other variable that benefits employers and disadvantages workers is inflation, which is increasing alarmingly under the current economic mismanagement. Inflation until June was 3.85%, which means that the average rise in real wages – wage increases minus inflation – was in fact negative 2.15% on the year until June.

We know that many top wages have benefited from large wage increases during this period, so that the vast majority of workers have experienced a substantial drop in their real disposable income and standard of living.

How far can wages really go?

In its first year, the Coalition led by Tony Abbott achieved what was then the lowest ever pay hike level of just 2.59%. Conference halls across the country celebrated merrily. Abbott and his hapless treasurer Joe Hockey improved that the following year with salary increases to 2.27%, before they were both dumped by their own party.

Incoming Treasurer Scott Morrison topped hockey by dodging Australian workers in 2016 with another record wage increase of just 2.06%. It achieved an even better result for large overseas employers when wages rose 1.94% in 2017.

This has made four consecutive years of new record salary increases.

After Morrison took the top job and woefully underqualified Josh Frydenberg became treasurer, two more all-time salary increases were recorded: 1.82% through June 2020 and 1.71 % until June 2021.

The question that cheering bosses are asking themselves today is how far can wages fall? Can Morrison and Frydenberg succeed in transferring even more wealth and income from poor and middle Australians to them?

Global comparisons

This is yet another area where Australia fell from or near the top of all developed countries before this incompetent regime took office among today’s losers.

Trading Economics has current wage and inflation data for 32 developed OECD member countries. Twelve of them generated real wage increases – an increase in the rate of pay minus the rate of inflation – of more than 2%.

Nine other real wages managed increase below 2%. That leaves eleven economies whose workers have lost their wages in real terms in the past year. Of these, Australia was among the bottom four.

OECD salaries August 2021 F.jpg

Wages rise to record as profits skyrocket

It is not the inevitable result of the pandemic or a global economic downturn, or any other external factor. It is the result of specific decisions taken by governments and businesses to shift the wealth and incomes of the poor and middle incomes – the majority of Australians – to the wealthy businesses in Australia and beyond.

Corporate profits have grown impressively over the past eight years, averaging 8.02%. They keep exploding.

The Commonwealth Bank reported last Friday that 27 companies listed on the Australian Stock Exchange reported profits for the year through June. Overall net income increased 32%, dividends increased 66% and cash increased 152%.

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All the companies announced a final dividend. Only one company has reduced its dividend compared to a year ago.

The bank said:

Australian companies are cash-in and eager to reward shareholders … Of all ASX 200 companies that have reported half-yearly or full profits to date, $ 17.7 billion will go to shareholders in the form of dividends or buybacks, up from 6 , 0 billion dollars per year. earlier.’

Record profits and record low wages are the choices of this government. Whether or not this government continues is the choice of Australian voters.

Alan Austin’s defamation case is nearing completion. You can read the latest update here and contribute to the crowdfunding HERE. Alan Austin is an Australian freelance columnist and freelance journalist. You can follow him on Twitter @ alanaustin001.

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