Yahoo Finance Want a pay rise? Switch jobs, government says
Amid stagnating wage growth, the Australian Federal Treasury has pointed the finger at stationary workers, who it claims need to switch jobs to invigorate wage growth.
In new analysis released today, the Federal Treasury said workers who are choosing to stay in lower-paying jobs are putting the brakes on wage growth.
Related story: Here's what's holding back wages
"Treasury work highlights the fact more frequent job switching is associated with higher real wage growth, even for those that stay in their job," Federal Treasury deputy secretary Meghan Quinn said.
According to Treasury figures, the job switching rate across the country has slowed from 11 per cent in the early 2000s to 8 per cent.
And, Treasury analysis links a 1 per cent fall in the job switching rate to a 0.5 per cent drag on average wage growth.
“The last decade has seen fewer people leaving or losing their jobs," head of labour statistics at the Australian Bureau of Statistics, Bjorn Jarvis Jarvis confirmed earlier this month.
“This has been especially true for women, with 15 per cent of all women who worked in the year leaving or losing a job, down from 19 per cent in 2008. This compared to 14 per cent for men in 2019, down from 17 per cent in 2008.”
The same ABS data found the number of people complaining of underemployment - that is, not working their desired amount of weekly hours - had increased to 8.2 per cent of the workforce from 7.6 per cent in 2009, another drag on wage growth.
Professionals were the most likely to change jobs in the year to February 2019, while drivers and machinery workers were the least likely.
‘A bit rich’ to blame workers
However, Labor frontbencher Jason Clare rejected Treasury’s argument, claiming it was “a bit rich” for Treasury to blame workers for the sluggish wage growth.
"If today the government's argument is that workers are to blame for wages not going up, then it shows that this is a government which is really out of touch," Clare told Sky News on Tuesday morning.
"People are struggling to pay the bills right now, can't get enough hours at work.
"There were statistics that came out a couple of weeks ago that showed there are more people behind on their mortgage today than any time in the last 10 years."
The Treasury analysis comes just weeks after the second official interest rate cut from the Reserve Bank of Australia (RBA).
While it’s one of the largest levers to stimulate the economy, RBA governor Philip Lowe warned it would take more than rate cuts to boost Australia’s slowing economy.
He said the government needs to consider fueling infrastructure investment to cut underemployment and unemployment.
“As a country, we should also be looking at other ways to get closer to full employment. One option is fiscal policy, including through spending on infrastructure," Lowe said.
"Another is structural policies that support firms expanding, investing, innovating and employing people. Both of these options need to be kept in mind as the various arms of public policy seek to maximise the economic prosperity of the people of Australia."
With AAP.
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