Australians Have Effectively Copped An $800 Pay Cut Without Even Realising
If you didn't receive a 3.5% raise in 2021, you're actually worse off now.
As if the last year hasn’t already been hard enough, the average Australian ended up more than $800 worse off in 2021 than they were in 2020 as a result of the rising cost of living and not-so-rising wages.
According to the Australian Council of Trade Unions President Michele O’Neil, the average worker earning $68,000 per year effectively copped an $832 pay cut in 2021 as wage increases struggled to match the living cost inflation in Australia.
O’Neil’s claims — given in a speech to the Australia Institute on Tuesday — are backed by data from the Australia Bureau of Statistics, which shows wages only growing by 2.3 percent in Australia, while consumer prices skyrocketed by 3.5 percent.
“Shockingly, it is actually worse for the workers who have been on the frontline keeping the country going during the pandemic,” said O’Neil. “The cost of living issue has been compounded by nine years of low wage growth, continued attacks on workers’ rights and conditions, and the increases under this government of casual and insecure work.”
The decrease was even more significant for those in essential work like transport and warehousing, where salaries effectively dropped by as much as $1,497, followed closely by a $1,362 drop for education workers and $1,185 in admin.
So basically, if your pay didn’t go up by at least 3.5 percent in the 2021/22 financial year, you effectively copped a pretty hefty pay cut, which explains why it may feel like you’re struggling more than last year.
While you can — and should — try your hand at negotiating a higher salary if you’re in a salaried position, this isn’t quite so easy for casual worker or those on an hourly wage.
For those working for an hourly wage, we’re really dependent on the government to step in and ensure people aren’t ending up worse off as inflation continues to wreak havoc on Australian life.
Treasurer Won’t “Take Lectures”
However, according to The Guardian, Josh Frydenberg has already asserted that he won’t “take lectures from the unions or the Labor party on wages”, so it is probably not worth holding your breath for things to get better any time soon — especially considering he already admitted there was a problem last year.
In a speech last year, Frydenberg acknowledged that inflation was growing faster than wages but asserted that the solution was a focus on jobs.
“The key to driving increased real wages is actually to get a tighter labour market,” he said at the time, noting that the government remains firm on its position to leave the call for raising minimum wage up to FairWork. “That’s why you’ve seen in these budget papers that the unemployment rate comes below 5 percent by the end of next year.”
This sentiment was again echoed earlier this year by Treasury secretary Steven Kennedy in an address to the senate estimates that also noted that the department isn’t exactly sure when the tipping point for a new wages boom will actually happen.
Technically speaking, wages are rising at the fastest pace we’ve seen since COVID first kicked off in 2020, but until it meets — or exceeds — the increase in cost of living, life will only continue to get tougher for Australians.