Australians suffer world’s biggest collapse inliving standards
Leithvan Onselen
Thursday, 11 July 2024
Australian households suffered one of the world’s steepest declines inreal per capita household disposable incomes last year:
Australians have likewise recorded one of thesharpest declines in real per capita since the start of the pandemic:
The March quarter national accounts from theAustralian Bureau of Statistics (ABS) showed that annual real per capitahousehold disposable incomes in Australia had collapsed by 7.6% from their June2022 peak to be tracking at early 2018 levels:
It is a similar story for Australian real wages.
When adjusted for headline CPI inflation,Australian real wages are currently tracking 7.1% below their June 2020 peak asshown below:
Not surprisingly, then, the latest employmentoutlook from the Organisation for Economic Co-operation and Development (OECD)shows that Australia has recorded one of the world’s biggest declines in real wages.
Australia was one of 16 member countries whose realincomes have gone backwards since the end of 2019. It fell well below the OECDaverage of 3.5% real wage growth over the same period.
“This is one of the largest drops in real wagesamong OECD countries,” the organisation said.
The May federal budget projected that Australianreal wages would only recover to December 2014 levels by mid-2028:
If this forecast comes to fruition, Australianswill have lost around 14 years of progress in their living standards.
You will also notice from the above chart thatAustralian real wages in mid-2028 are expected to be 4.3% below their June 2020peak.
This suggests that it could take more than a decadefor Australian real wages to recover from their losses.
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