Australia’s economic growth is in a dire state – and it’s putting wage growth and Australian standards of living under threat.
Figures released yesterday show that the growth of Australian gross domestic product was only 0.2 per cent in the December quarter.
It’s caused economist Shane Oliver to revise down his annual growth forecasts – and it spells bad news all round for job seekers and paypackets.
“Growth around 2-2.5 per cent won’t be enough to further eat into [unemployment and underemployment], let alone absorb new entrants to the workforce,” Oliver wrote in a note.
“So we see unemployment rising to around 5.5 per cent by year end.”
This is consistent with the slowdown in job vacancies, he added.
“This in turn points to wages growth remaining weak.”
Workers’ union call for increase to minimum wage
The Australian Council of Trade Unions (ACTU) has called for the minimum wage to be lifted, arguing that the current minimum working wage of $37,398 is too low.
“Australia desperately needs a pay rise,” said a statement by the ACTU.
The current minimum wage shouldn’t see employees working full-time but still living in poverty, ACTU secretary Sally McManus said.
Two in five Australians who live in poverty are employed, according to a report by the Australian Council of Social Services.
McManus called on the Fair Work Commission – which determines our national minimum wage – to overhaul the way the figure is calculated.
“The independent umpire needs new rules that allow it to determine what a living wage should be based on the costs and needs of working people.”
And according to an ACTU report released earlier this week, wages have become “anaemic” in the face of soaring household and living costs.
Standards of living have plunged to levels not seen since before the last recession and it’s seen us sink into an ‘incomes recession’.
Aussies ‘crying out’ for wage growth
Business Council chief executive Jennifer Westacott acknowledged that Australians were “crying out” for wages growth.
“But we can’t deliver that with an economy standing still,” Westacott said.
GDP growth of 0.2 per cent last quarter is “simply too low” to create new jobs and wages.
The key to driving wages growth will be raising productivity, Westacott said. But raising productivity will require business investment – and businesses need confidence from the government in order to invest.
“We need a comprehensive plan to grow the economy, lift productivity and grow wages for Australian workers,” she said.
“Employers are ready to invest in new jobs and higher wages but we can only deliver on that potential if Australia gets the settings right to boost growth and investment.”
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