Australia is facing an ‘incomes recession’, new ACTU research finds

Flat wages growth drove a fall in living standards over the past three years greater than what occurred during the 1991-92 recession, finds ACTU research.

ACTU Secretary Sally McManus says people are struggling to maintain their living standards while corporations make bumper profits.

Australia is facing an “incomes recession’’ with flat wages growth driving a fall in living standards over the past three years that is greater than what occurred during the 1991-92 recession, new ACTU-commissioned research finds.

The research by Australia National University associate professor Ben Phillips found the fall in living standards over the past three years represents the biggest decline in 30 years.

His research used data from the Australian Bureau of Statistics measuring wages, welfare payments and investment incomes, allowing for taxes and interest payments and accounting for rising costs and the effects of population growth.

It found living standards peaked in Australia in 2011 before a “dramatic slide” between 2015 and 2018 to “plummet” to their current levels.

“The clear driver for the fall in living standards has been low wages growth,’’ the report says.

“The fall in living standards in the past three years was greater than during the last recession in 1991-92. It is clear Australia is currently facing an ‘income recession’.”

The ACTU says “anaemic real wages growth is the key driver in Australia’s declining living standards”.

“Using wages and salaries data from the national accounts we can see that this has been slowest and most sustained period for most of Australia’s post second world war history,’’ it says.

ACTU secretary Sally McManus used the report’s findings to restate her push for changes to the federal workplace laws, greater spending on health and education, an increase in Newstart and measures to ensure corporations and the very rich pay their fair share of tax.

“Right now people are struggling to maintain their living standards while corporations make bumper profits and CEOs take sickeningly large salaries and bonuses,’’ she said.

“The Morrison Government has overseen multi-nationals and the very wealthy taking more than their fair share of the nation’s wealth at the expense of the living standards of millions of working people.

“We need to re-balance our system so that people can negotiate fair pay rises and get a fair share of the wealth their work produces.

“Working people in Australia are ready to take action to restore our living standards.”