The Australia Institute’s Greg Jericho has published interesting analysis on the RBA Statement of Monetary Policy’s wage forecasts.
The RBA now forecasts that Australian wages will be 5.3% below their pre-pandemic level by the end of 2023:
This would see real wages fall back to the level they were in March 2009.
“It remains a truly unprecedented destruction of living standards for Australian workers”, notes Jericho.
“Worse still, the recovery is set to take at least 7 years. If we extrapolate the trend growth from December this year, it will take till the end of 2031 until real wages are back at the level they were in March 2020”, Jericho adds.
The one shining light is that the RBA has revised up its forecast for wage growth, with wages by the middle of this year now expected to be growing by 4.1% annually – up from the RBA’s previous estimate of 3.9%.
In turn, real wages will only fall to March 2009 levels, rather than the December 2008 levels previously forecast by the RBA.
Be grateful for small mercies.
