Last week, the Melbourne Institute’s latest monthly survey of workers revealed that wages fell by 0.7% in the year to June. This was the first time there had been negative growth in pay since the early 2000s, with the series also hitting a record low:
Now, ANZ Bank economists Catherine Birch and Bansi Madhavani have forecast that Australia’s nominal wage growth will slow to a record low of just 0.7% in the first half of 2021. They warn that wages growth could fall to around zero during some quarters, and note that Australia had lower growth in wages than the US and New Zealand prior to the onset of the coronavirus pandemic:
It would be the slowest growth in wages on record. Wages growth slowed to 2.6 per cent during the global financial crisis while in 2017 it hit a then-record low of 1.8 per cent, which prompted concerns from the Reserve Bank.