1 week Ago By Ross Gittins
The craziest thing about this election is that we’re into the last week of the campaign without anyone much bothering to mention the word “wages”. Really? We’re too obsessed by the cost-of-living crisis to have any interest is what has happened, and will happen, to our wages? Is it possible our voters could be so detached from reality that they don’t see the link between prices and wages? It reminds me of the person who voted for Trump because “prices went up, and they’ve never come back down”. That’s right, sir, the general level of consumer prices goes up and rarely falls back.
That’s why it’s nice to see your wage rising in line with the rise in prices, or even a bit faster than prices. If that’s what happens, you don’t have a lot to complain about. Anthony Albanese (left) and Peter Dutton.
Credit: Fairfax Media Is it possible some people think the government can do something about rising prices but has nothing to do with wages? Actually, the proportion of workers who are members of a union has fallen so far – to 13 per cent – that many workers may feel they have no say in what happens to their wage, and neither does the government. The boss increases your pay occasionally if she feels like it. The fact is that the cost of living is always high on ordinary people’s list of complaints.
But it became a particular concern in 2022 because of the huge surge in prices caused by the pandemic. The annual rate of increase in prices got to about 8 per cent, but is now back down to the 2 to 3 per cent range we’ve become used to. Loading Trouble is, wages didn’t rise as much as prices did and, to make matters worse, in its efforts to get the inflation rate down, the Reserve Bank caused interest rates on home loans to rise by more than 4 percentage points.
As well, “bracket creep” took an extra bite out of workers’ after-tax pay. That’s what explains the voters’ obsession with the cost of living. But the surge in prices was set in train before the Albanese government won the last election in May 2022.
So the real questions are: what has this government done about it, and would a change of government improve the prospects for the cost of living?.
