Australians’ living standards face the greatest threat in a generation, with no signs of strong wage growth, longer unpaid commuting times and a rise in workforce casualisation putting more pressure on middle- and lower-income households than they have faced in 20 years.
A new report from Per Capita, an independent think tank, also shows the split of national income between labour and capital is continuing to worsen in Australia, with wages’ share of national income dropping from 65.5 per cent at the turn of the century to 59.7 per cent in 2012.
It says this has occurred at the same time as the bulk of productivity improvements have come from labour rather than capital in recent years.
The report, “Paradise Lost? The race to maintain Australian living standards”, says Australians’ living standards are under threat due to slowing productivity, rising unemployment and slowing wages growth.
It warns Australians face an “inevitable correction” in their income and wages levels – with real wages set to fall markedly to reflect the country’s changed economic circumstances and lack of reform over the last decade – if nothing is done about it.
David Hetherington, Per Capita’s director, warned Australian governments they must re-start the reform process now to arrest the worrying trends, saying the benefit of the economic reforms of the 1980s and ’90s had run their course.
“Australia must either reform once again or face a dramatic downwards adjustment in wage levels and living standards,” Mr Hetherington said.
“To continue to lift labour productivity, we must lift our investment in hard infrastructure like transport and broadband, as well as soft infrastructure like skills and education.
Courtesy: The Age
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