Nine Entertainment has slammed Albanese’s preference for a rise in the minimum wage of 5.1% in line with inflation as it would increase inflationary pressures. However many economists have pointed out that this coverage is missing half of the equation when it comes to inflation.
The Centre for Future Work has released a report on Australia’s nine-year wages crisis, by three of Australia’s top labour policy experts: Professor Andrew Stewart, Associate Professor Tess Hardy and Professor Stanford.
This report demonstrates that wages should normally grow faster than inflation.
The sustained slowdown in wage growth since 2013 can’t be explained by normal labour market factors (such as unemployment). So lower unemployment alone won’t solve the problem. Policies and institutions explain why wages have lagged; they must be fixed to get wages growing again.
The idea inflation results from businesses passing on higher labour costs hasn’t been true for years. Rather, it’s higher profit margins that correlate to higher prices.
Callum Foote a journalist and Revolving Doors editor for Michael West Media.
Callum has studied the impact of undue corporate influence over Australian policy decisions and the impact this has on popular interests.