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A new report has detailed the states and industries being hit the hardest when it comes to a drop in wage growth caused by rising inflation.
A decade of wages lost has been released by McKell Institute, detailing how wages in Australia have been in a low growth period for over 10 years.
As per the report, the Wage Price Index was established in 1997, and from then until 2013, wage growth sat at around 3 per cent. Since then, wages have seen an average growth of 2.3 per cent, with 2016 seeing the figure drop below 2 per cent.
While 2022 saw wage growth break from the slump it had up until 2021, McKell Institute said that it has been “offset by a dramatic rise in inflation. The result has been a real wage cut.”
According to McKell Institute, Queensland has been hit the worst by wage decline, at 2.5 per cent. NSW has dropped 1.7 per cent and Victoria 0.2 per cent. NSW was equal with Victoria in 2012, but since then has fallen to second worst, only just above Queensland.
When looking at occupations specifically, the report found nurses have been hit hardest by wage drops.
In 2012, a first-year NSW Health-employed nurse earned $79,184.68. In 2022, with wages adjusted to account for inflation, that same nurse was earning $76,403.60. That’s a $2,825.33 decrease for the same job, a decade later.
Paramedics, firefighters, and correctional officers also saw a decrease. Author of A decade of wages lost and McKell Institute chief executive Michael Buckland commented: “Real wages are at their lowest level in years. The nominal wage growth we have seen over the last decade has been wiped out by inflation.
“Workers across Australia have been exposed to the onset of inflation and low wage growth and will be worse off for years to come. Paramedics, registered nurses, correctional officers and firefighters are getting paid less, and have a lower standard of living today than they did 10 years ago.”
Further, the report offered insight into how long it’ll take wage growth figures to see a turnaround.
“It will take years to recover the lost purchasing power,” it said.
“The scale of real wage decline has been so severe that wage earners today have a lower standard of living than they did in September 2012 and will be worse off for years to come.”
According to McKell Institute, the wage decreases are intentional, with a separate report released by the organisation in April 2022 noting the government has achieved this through:
- Ignoring wage theft
- Increasing migrant worker numbers for low pay
- Decreases in penalty rates
- Freezing wages in the public sector
- Declining minimum wage increases
- Unregulated gig economy development
Mr Buckland said: “Government policies have been driving anaemic wage growth. This has included public sector wage freezes, inaction on wage theft, and an expansion of the gig economy without adequate regulation.
“The federal government will no doubt prioritise reducing inflation, but it must also balance this with recovering a decade of lost wages for workers. It will take years to regain the wage growth that has been fought for and now lost.”
Jack Campbell
Jack is the editor at HR Leader.
