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TS Lombard has written a note (below) downplaying concerns of a 1970s-style “wage-price” spiral, suggesting it is an historical artifact that won’t be repeated in “the modern, globalized, high-tech economy, where workers and individual firms have much less bargaining power”.
I wholeheartedly agree. In Australia’s case, centralised wage fixing was abolished and workers have never had less bargaining power. This alone makes comparisons to the 1970s redundant.
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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