Australia endures wage stagnation as it becomes a political issue

The Australian Federal Governments' response to the 'low wage crisis', which was declared in 2017, has done little to nothing and urged employees to be patient. Taking a step forward, Opposition Leader Bill Shorten has pledged that next election will be 'a referendum about wages'. It will focus on who the economy should work for.

Over the last two years, Australian workers have received the lowest share of total economic output since the ABS began gathering quarterly GDP data in the 1950s, less than 47 per cent of GDP. Moreover, reports reveal that the share of GDP from Australia's labor force declined by 11 percentage points since peaking in the mid-1970s. And this is perfectly reflected in an increased corporate profit share, now near record highs. This, has left economists puzzled. Experts have tried to explain this that if the unemployment rate reduces, then the price of labor in the form of wages should increase, but wages have stagnated, while unemployment has decreased.

An analysis by the Centre for Future Work revealed that for the first time, a minority of Australian workers enjoy permanent, full-time employment with access to sick leave and holiday pay. Moreover, employees are hampered by repressive laws which further impede their ability to band together and effectively bargain. The ability to take industrial action in support for better wages, free from the risk of retaliation and legal liability is extremely limited.