Wages

Despite Australia’s sluggish economic growth and record-high government spending, a closer look at the data reveals that the situation may not be quite as dire as it seems.

Interest rates have come down in Canada and the eurozone. When will Australia follow suit?

Real wages in Australia have stagnated because the pandemic made us all poorer; a lack of wage growth just reflects that reality. If we push wages further above productivity, we risk disemployment, a wage-price spiral, and even a painful recession.

Australia’s national accounts were released last week and confirmed that our per capita recession – defined as two consecutive quarterly contractions – didn’t just continue into the December quarter, but deepened: on a per person basis, our economy is now a full 1% smaller than where it was a year ago.

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