Aussie wages were in recession long before COVID-19

The March quarter Business Indicators report was released by the ABS yesterday, which includes aggregate wages & salaries data, namely “gross earnings before taxation and other deductions” and “includes provisions for employee entitlements”.

In order to get a better sense of how Australian workers have fared, I have deflated this aggregate nominal wages & salaries data to real values (using the consumer price index) and real per capita values (using the latest population data).

Below are the charts presented in index form since the series’ inception in March 2001.

First, the national picture:

Real per capital wages & salaries nationally have fallen by 3.7% since peaking in March 2012.

Next NSW:

Real per capital wages & salaries in NSW have risen just 0.6% since March 2012.

Next Victoria:

Real per capital wages & salaries in VIC have fallen 5.8% since March 2012.

Next Queensland:

Real per capital wages & salaries in QLD have fallen 7.1% since March 2012.

Next Western Australia:

Real per capital wages & salaries in WA have fallen 7.1% since March 2012.

Next South Australia:

Real per capital wages & salaries in SA have fallen 5.0% since March 2012.

Next Tasmania:

Real per capital wages & salaries in TAS have fallen 2.0% since March 2012.

Next ACT:

Real per capital wages & salaries in TAS have fallen 4.6% since March 2012.

And finally, here’s the NT:

Real per capital wages & salaries in NT have risen 28.0% since March 2012.

Finally, here’s the per capita summary by jurisdiction:

It should be emphasised that the above charts measure real aggregate wages & salaries on a per capita basis (i.e. divided by every man women and child), rather than on a per employee basis, so it does not take into consideration changes in the employment-to-population ratio (this was 62.0% in March 2012 versus 62.5% in March 2020).

Regardless, the above charts suggest that Australian workers’ living standards have fallen over the past seven years, masked on an aggregate level – and caused in part by – breakneck population growth (immigration).

The COVID-19 shutdown will only make the situation even worse.

Leith van Onselen

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