Real wages are barely rising

By Leith van Onselen

Today’s wage price data, released by the ABS, revealed that annual wages growth fell to the slowest pace on record (1997) in the December quarter, clocking it at just 1.87% (trend) over the year:

ScreenHunter_17608 Feb. 22 12.29

At least the news was better when adjusted for underlying (core) inflation, with annual wages growth rising 0.3% in the year to December in trend terms, courtesy of historically weak inflation:

ScreenHunter_17609 Feb. 22 12.31
ScreenHunter_17610 Feb. 22 12.31

That said, in the three years to December 2016, real wages grew by just 1.8%.

Clearly, wages – both nominal and real – are stuck in the slow lane, which will make paying off today’s mega-mortgages all the more difficult.

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