Australia’s wage recession

Australia’s wage cost index is only 2.3% higher than a year ago, which represents its slowest annual growth since the inception of the series in the late 1990s and well below growth at the peak of the financial crisis (see chart). The wage recession suggests that the demand for labour remains weak. Renewed strength of employment growth in recent months might be an early sign that low wages growth is encouraging businesses to lift their hiring intentions. Sluggish wages growth might help to explain the adverse community reaction to the travel rorts affair recently, which claimed the scalp of the Speaker of the House of Representatives, Ms Bronwyn Bishop. From the perspective of the new Turnbull Government, the community’s appetite for economic reform will remain limited thanks to Australia’s wage recession. Read the full Weekly Impressions on the Evidente Blog (VIEW LINK)