Aussies brace for new wage shock

Australians have experienced a record 6.1% decline in their real wages. Worse, the Reserve Bank of Australia’s (RBA) own forecasts suggest that real wages will only recover to December 2011 levels by mid-2026, by which time they will still be tracking 5.7% below their mid-2020 peak.

Thursday’s labour force data for June, released by the Australian Bureau of Statistics (ABS), raises the prospect that real wages won’t recover as expected.

As illustrated below by Alex Joiner from IFM Investors, weak employment and a lift in the participation rate saw Australia’s unemployment rate lift to 4.3%, which was the highest rate since November 2021.

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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.