[Australia] Prime Minister sends wages into freefall

The rebound in Australia’s enterprise bargaining agreement (EBA) wages has stalled and Union inflation expectations have also fallen, suggesting EBA wage claims will moderate, MacroBusiness reports.

Recent indicators suggest that Australia’s labour market is weakening, meaning there will be less opportunity for workers to negotiate on pay and conditions, meaning lower wage growth.

Australia’s workforce is reportedly growing at its fastest pace since the late 1970s as a result of the Albanese government’s record immigration program. While Australia’s civilian population grew by a record 601,000 (2.8 per cent) in the year to September; roughly double its pre-pandemic level.

In addition, the number of applicants per job ad is currently tracking above pre-pandemic levels, reflecting lower job demand combined with rapid labour supply growth. This suggests that wage growth could stall amid rising numbers of migrant workers and the weakening economy.

Leith van Onselen - Chief Economist at the MB Fund and MB Super - describes this as bad news for Australian workers, who have already seen real wages drop to March 2009 levels after falling 7.5 per cent since June 2020.

Australian real wages will continue to lag inflation for a while yet as the Albanese government’s record immigration programme stokes inflation (via rents, for example) and suppresses wage growth, Mr van Onselen said.

Source: MacroBusiness

The rebound in Australia’s enterprise bargaining agreement (EBA) wages has stalled and Union inflation expectations have also fallen, suggesting EBA wage claims will moderate, MacroBusiness reports.

Recent indicators suggest that Australia’s labour market is weakening, meaning there will be less opportunity for workers to negotiate on pay and conditions, meaning lower wage growth.

Australia’s workforce is reportedly growing at its fastest pace since the late 1970s as a result of the Albanese government’s record immigration program. While Australia’s civilian population grew by a record 601,000 (2.8 per cent) in the year to September; roughly double its pre-pandemic level.

In addition, the number of applicants per job ad is currently tracking above pre-pandemic levels, reflecting lower job demand combined with rapid labour supply growth. This suggests that wage growth could stall amid rising numbers of migrant workers and the weakening economy.

Leith van Onselen - Chief Economist at the MB Fund and MB Super - describes this as bad news for Australian workers, who have already seen real wages drop to March 2009 levels after falling 7.5 per cent since June 2020.

Australian real wages will continue to lag inflation for a while yet as the Albanese government’s record immigration programme stokes inflation (via rents, for example) and suppresses wage growth, Mr van Onselen said.

Source: MacroBusiness