Australian Wages Become Ever More Stagnant

Wage stagnation has long been a problem in Australia, and it's one that hasn’t been improving. Labour market deregulations weakened unions and brought about a big cut in wage increases in the 1990s and ever since then, wage increases have kept on slowing. In 2018, union membership in Australia was at just under 10 percent in the private sector. For workers under the age of 25, it was at about 5 percent, according to reporting by the Guardian.

Ahead of the federal elections in May, Labor politicians have said they would consider returning to industry-wide bargaining to remedy the situation. In 1993, the current system of bargaining at the company level was introduced, also under a Labor administration, which seems to have decreased the annual wage gains for workers. The plan was initially drafted to counteract high inflation rates, with support of trade unions at the time.

As seen in the graphic, the number of average annualized wage gains have been decreasing both for the quarter they were approved as well as during all quarters they remained active for. The numbers from the Australian Department of Jobs only include those wage increase agreements in which the increase was stated as a concrete number and not as being dependent on performance, outside funding or was not equally distributed among employees.