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Recent data indicates that Australian families are grappling with some of the steepest reductions in real per capita income levels since the early days of the pandemic.
According to the Australian Bureau of Statistics (ABS), the national accounts for the March quarter revealed a startling 7.6% decline in annual real per capita household disposable incomes from their peak in June 2022. This has set incomes back to levels seen in early 2018.
Furthermore, this troubling trend isn't exclusive to disposable incomes—real wages in Australia are also facing a significant downturn. Adjusted for headline CPI inflation, real wages have plummeted 7.1% from their high in June 2020, underscoring the pressures on working Australians.
The Organization for Economic Co-operation and Development (OECD) has reported similar findings in their latest employment outlook, showcasing Australia's unfortunate position among the worst-hit nations in terms of real wage declines.
As one of 16 member nations whose real incomes have regressed since end-2019, Australia falls well short of the 3.5% real wage growth average recorded across OECD countries during the same period.
"This marks one of the biggest falls in real wages amongst OECD countries," the organisation stated, spotlighting the severity of Australia's economic circumstances.
The Federal Budget released in May forecasts that real wages in Australia will likely rebound to 2014 levels by mid-2028, cautioning that the nation may lose up to 14 years' worth of advancements in living standards if projections hold steady.
Notably, even with this estimated recovery, mid-2028 real wages are anticipated to be 4.3% below their June 2020 peak, highlighting the long and arduous road ahead for Australian wage growth.
This bleak outlook implies that Australians could face a decade-long hurdle in restoring their pre-pandemic wage levels, painting a challenging picture for the nation's economic future.
Published:Thursday, 11th Jul 2024
Source: Paige Estritori
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