Household incomes are stuck in the no-growth zone

By Leith van Onselen

The December quarter national accounts was a sobering experience for Australian workers.

According to the ABS, the average compensation per employee registered only 0.1% growth in the 2016 calendar year – the lowest growth on record:

ScreenHunter_17822 Mar. 07 14.14

In a similar vein, separate per capita wages & salaries data registered zero growth over the 2016 calendar year:

ScreenHunter_17823 Mar. 07 14.19

Now, the Reserve Bank of Australia (RBA) has released real household disposable income (HDI) data, derived from the December quarter national accounts, which revealed that real per capita HDI fell by 0.4% over the quarter but was up by 0.4% over the past year.

The below chart tracks quarterly real per capita HDI:

ScreenHunter_17824 Mar. 07 14.24

As you can see, quarterly real per capita HDI has registered zero growth since June 2012, or 4.5 Years!

Below is the same chart presented on a 4QMA basis:

ScreenHunter_17825 Mar. 07 14.24

Here, real per capita HDI has grown by just 1.0% over the same 4.5 year period.

To add insult to injury, the growth in real per capita HDI so far this decade remains anaemic at just 0.8% per annum, which is lower than the 1960s (2.3%), 1970s (1.8%), 1980s (0.9%), 1990s (1.3%), and 2000s (3.2%):

ScreenHunter_17826 Mar. 07 14.30

Just another sign of Australia’s ‘lost decade’ in the making.

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Unconventional Economist

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