Big digs covered up sliding wages
Economists say the sugar hit of mining boom masked a deterioration in Australian wage growth.
Figures out this week show annual wage growth is at a record low pace of 2.3 per cent.
It is a steep drop from the rate at the height of the mining investment boom, when it was above 4 per cent.
“What the mining boom covered up was the weakness of the mainstream labour market,” University of Newcastle economist Bill Mitchell told reporters.
“The east coast really has been close to recession for some years.”
Builders, scientists and other technical professions have seen the slowest wage growth.
Professor Mitchell said it was linked to Australia’s high unemployment rate.
“We've now got upwards of 15 per cent of our available labour force not working in one way or another, either unemployment or under employment,” he said.
“What the Government should do is step in and stimulate the economy.
“When the private sector's booming the Government should be putting the brakes on so we don't get inflation, but when the private sector's not booming, the Government should do exactly the opposite and inject spending stimulus to the economy.”
Australian Chamber of Commerce and Industry CEO Kate Carnell says Government spending will not fix the problem.
“Wage increases are still at [a] higher rate than inflation,” she said.
“If we were seeing more of a wage blowouts, that would be reflected much more dramatically in unemployment rates.”
Carnell says changing Sunday penalty rates is a better way to boost employment.
“The difference in our society between Saturday and Sunday now is lower, what we want to do is ... ensure businesses in the hospitality industry can open longer hours,” she said.
“If they open longer hours, they can pay more staff, employ more people.”
Professor Mitchell says there is no evidence to back that up.
“We may get some spending redistribution towards Sundays, maybe, but that will be at the cost of spending elsewhere.”