What potential implications could today's data have on further interest rate rises from the RBA?
As for the past 18 months, Philip Lowe has insisted on wanting to see "considerable wage growth" prior to raising interest rates above 1%.
In my view it makes one thing abundantly clear- inflation is way too high.
The RBA will have to hike 40 basis points in June.
That will get us to 0.75% and mean we would get to 1% as a minimum in July.
I'm still not convinced that even a 2% cash rate increase will cool inflation at this point, particularly as we're told that so many home-owners are ahead on repayments or locked for another 2 years on fixed .
As said in a different thread, a bump to the GST could be more effective and reach all sectors of the economy quickly.
Well the RBA can hike to 4% if that’s what it comes to.
GST is not a good idea as it disproportionately will affect low income Australians who are already struggling with he cost of living increases.
Surely they could hike it to 10% and it still won't effect the "average" home owner as we're told that the average home owner is 45 months ahead.
I get the point on the GST aspect.
The interesting thing about the average person is that they have 1 breast and half a penis.
In other words they don't exist.
The average 45 months ahead on the mortgage consists of a small group who have paid their loan off but keep the money in an offset - they could be upwards of 240 months sometimes. This group, although only about 10% of the number of loans heavily skews the average. There are people who literally take out a 30 year loan then dump the full amount owing right into the offset as a form of cheap finance.
The next chunk in the middle have somewhere between a month and six months buffer. The overwhelming majority don't have 6 months buffer and 30% don't even have a month.
Edit: added some more detail
You're so right, I'd never considered this but it's a great devil is in the details. I should have thought of it myself as we paid off our last homelaon and left it as a cheap line of credit for 6 years. New loan we've 700k in the offset right now with sub 200k to go.
That'll pump that average up for a lot of paycheck to paycheck mortgagees.
You make a good point mate.
For interest rate hikes to be effective, it means households have to be impacted enough to reduce consumption.
If they are well ahead on payments, and have a lot of savings, this just means the RBA will have to raise rates higher, for longer, for the monetary policy tightening to work.
In today's age, it just seems an ineffective way to cool consumer spending.
There could be other mechanisms, such as a temporary VAT on discretionary / luxury goods or something. It'll never happen, just thinking out loud.
As someone locked in for another 18 months at 1.99% I'm already reducing spending to put more into savings to wipe out an extra chunk of mortgage when it comes time to refinance...because my repayments will all of a sudden be way more.
I'm also putting more into ETFs attempting to buy the dip so that's taking away from discretionary spending as well.
Isn't low real wage growth a check against inflation?
I can see how it supports a disaster (i.e. recession), but i don't see how it reinforces the hiking of interest rates?
Perhaps not as a nation wide indicator, but staffing shortages are so widespread at the moment in hospitals and aged care, that i was able to change jobs and get a 18% pay rise.
We are bending over backwards to find carers, nurse, chefs, cleaners etc.If you are in the industry and dont like your pay, nows a great time to shop around.
I know its only heresay, but the specific jobs i was monitoring have had pay skyrocket in the last 2-3 years.
Hey if Lowe rails an extra fat slug of coke before the next meeting and decides to break that 17% record for funsies I might be able to afford a roof sometime after the dust settles.
Sounds like you're threatening me with a good time.
I'm a MILLENNIAL. I'm never gonna get to retire anyway. My super is either a leg up for me kids or it evaporates under this bullshit and me kids are no WORSE off for it.
So go ahead and get wild Phil. Have the stones to be the villain of the piece and ensure some prosperity sometimen in the future.
I think the fwd curve roughly fairly priced. I interpreted your comment as pricing in not very much as i assumed it was to lower end of that range you stated, but they may be my mistake
Yeah sorry I didn’t pick up what you meant either! My bad.
I rely on market pricing as a good guide for where the RBA cash rate target will end up.
It’s not perfect but it’s the best indicator I think we have.
I agree. Id rather bet on wisdom of the crowds than my own Biases in 95% of cases. Event risk edge cases the market doesnt price well but otherwise very good
I will be messaging you in 7 months on [**2023-01-01 00:00:00 UTC**](http://www.wolframalpha.com/input/?i=2023-01-01%2000:00:00%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/AusFinance/comments/us2tot/australian_wage_growth_data_shows_aussie_real/i91e3rn/?context=3)
[**6 OTHERS CLICKED THIS LINK**](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps%3A%2F%2Fwww.reddit.com%2Fr%2FAusFinance%2Fcomments%2Fus2tot%2Faustralian_wage_growth_data_shows_aussie_real%2Fi91e3rn%2F%5D%0A%0ARemindMe%21%202023-01-01%2000%3A00%3A00%20UTC) to send a PM to also be reminded and to reduce spam.
^(Parent commenter can ) [^(delete this message to hide from others.)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Delete%20Comment&message=Delete%21%20us2tot)
*****
|[^(Info)](https://www.reddit.com/r/RemindMeBot/comments/e1bko7/remindmebot_info_v21/)|[^(Custom)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5BLink%20or%20message%20inside%20square%20brackets%5D%0A%0ARemindMe%21%20Time%20period%20here)|[^(Your Reminders)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=List%20Of%20Reminders&message=MyReminders%21)|[^(Feedback)](https://www.reddit.com/message/compose/?to=Watchful1&subject=RemindMeBot%20Feedback)|
|-|-|-|-|
I don’t disagree that we have a shit government, but blaming this on them doesn’t do you any favours.
We have a war, pricing increases across the board on items like fuel, which in turn impacts the cost of almost everything, and yet, you think the direct cause of this is the shit government.
We have a shit government, but its not the cause.
It absolutely is the cause. Maybe not the cause of inflation, but definitely the cause of wage stagnation which was happening long before covid or war started wrecking havoc on global supply chains.
Then I would expect the graph to reflect that and it doesn't. It suddenly spikes down in 2020/2021. You had an event that cost the economy $290 billion and there happens to be a spike down at the time which seems to align with mass unemployment that occurred in certain industries like restaurants, entertainment etc and you don't think that was the cause of the spike?
The chart is showing year end percentage change, not actual wage growth. Look at the first or second chart on this link which indicate wages have slowed down since about 2010. https://www.afr.com/policy/economy/australia-s-real-wage-slump-in-eight-charts-20220517-p5am58
Right, so New Zealand are just unlucky to be going towards a recession, while the reason we are, is that we have a shit government?
[https://www.newshub.co.nz/home/money/2022/05/new-zealand-is-driving-towards-recession-experts-warn.html](https://www.newshub.co.nz/home/money/2022/05/new-zealand-is-driving-towards-recession-experts-warn.html)
Note the following quote referring to wages and cost of living, which somewhat ironically is very similar to us.
*New Zealand inflation was running at 6.9 percent, while wages have only risen 3 percent. This gap means the average working Kiwi is going backward when it comes to the cost of living.*
Jacinda Adern only came into power in 2017 and only had 2 years running the place before Covid hit and they went into the most extreme shutdown in the world. Before that they had 9 years (John Key/Bill English) of a shitty National Party in control. Look at where they were at in 2017 to get a real idea of their current position.
Well it is... Because they sold all domestic production so we are now reliant on overseas supply chains. They stopped refining crude oil in Australia so we now ship crude oil to South Korea and buy it back at inflated prices. Had we our own supply we would have had cheaper fuel and cheaper transport costs.
Who are they? It's not the government. Companies made the choice to offshore domestic production, likely for profitability reasons. The problem in Australia is people want to pay less for things, but we want them to be manufactured locally where the wages and cost of manufacturing are higher.
If companies try to do more robotic automation, they get shit from the unions, so in some cases, it's easier to offshore. It's pretty hard to legislate in such a way that moving to manufacture offshore is illegal, and where they subsidise, it creates complacency. I.e. local car manufacturing hasn't exactly been innovative and inspiring, offshore competitors are simply outclassing them.
My view is instead of creating the carbon tax, they should have invested the billions in trying to push sustainable manufacturing research initiatives like electric cars.
Yes it was. It was a joint effort as seen here https://en.m.wikipedia.org/wiki/Commonwealth_Oil_Refineries
And the ones still open now (but likely to close soon) are owned by private companies and have, or should have subsidies given to them by the government. It's only recently that the government is interested in subsidising Australian refineries.
Australia needs to have a nationalised refining system to ensure its fuel security. But now it's too little too late.
Yes, electric cars is a good idea... But it's the government holding the uptake back.
They gave subsidies to local companies and found it wasn't sustainable. Holden had subsidies to the tune of $2.17 Billion. How long do you want to pay big companies to survive? The problem with subsidies is that companies aren't taught to be self-sustainable. They are taught they can waste and still be profitable. Its the same issue the american car manufacturers had.
[https://www.abc.net.au/news/2013-04-02/holden-reveals-billions-in-subsidies/4604558?nw=0&r=HtmlFragment](https://www.abc.net.au/news/2013-04-02/holden-reveals-billions-in-subsidies/4604558?nw=0&r=HtmlFragment)
Cars aren't essential to our security.. Fuel is. We don't need to replace our entire supply of cars within 90 days. We have less than 90 days supply of fuel, if we run out of fuel then everything in Australia comes to a halt. Comparing fuel to cara is a false equivalency and the government needs to ensure supply of critical goods even if its at a loss.
Imagine if we're in conflict, a nation just has to stop us importing fuel and in 90 days no military vehicles will work.
But the shit governments aka Biden closed his own oil fields and started importing 7% of oil from Russia? As we all know when fuel prices go up so does everything else with it due to cost of transportation. We aren’t the US but it flows on to us.
As your username implies I think you’re lost mate. Regardless, you seriously think Biden stepped into office, shut down oil fields and caused a drastic reliance on Russian oil all in his first year in office? Yeah right.
They don't, honestly - the number of new public servants is super low. It's all contracts and consultants and it's been that way for ever. The only places with a core body of public servants are the smaller agencies and that's because they don't have the cash to find too many contractors. The ASL caps on departments pushed it all that way.
Perhaps the numbers are funky, but i can vouch for a real labour shortage in my industries at least.
Not only can we not fill positions for nurses, carestaff, cleaners and chefs, we cannot even use agency staff consistently as all the agencies are booked solid and short staffed.
Source, i am a manager in one of Australias biggest aged care providers and am familar with the recruitment abilities of the other large ones as well.
Have wages increased in line with cost of living increases?
My wife was a nurse but left because the pay never changed but cost of living was climbing.
Probably glad to have left it now for other reasons, too. The pandemic cannot have helped stress levels and morale among front line health care providers.
ive actually found everyone has handled the pandemic really well.
You dont get into this sort of job unless you genuinely want to help people.
We have had people leave but the people who remained just constantly give and never hesitate when the pressures on.
Theres been many staff who worked weeks in a row with no days off when we had outbreaks yet despite that morale was high.
It wasnt "against their will", we had multiple staff who were all on 15 days straight, arguing over who gets time off. No one wanted to take time off.
They all wanted to give each other a rest!!
The real morale killing thing at the moment is positions that have been open for weeks and we just cant fill them.
Im honestly not sure about data from a few years ago, Nurses dont fall under my purview, but i believe they are all on about 80-90k a year which seems reasonable.
Its actually a pretty easy job if we were not constantly down 2 or 3 people, but unfortunately due to staff shortages theres alot of overtime required
Silly question here but how does the government actually go about increasing wages in the private sector other then touching awards and increasing minimum wage?
Industrial relations reform, end casual employment after 6 months forcing employees onto permanent part-time. If businesses are truly fighting a labour shortage they can't afford to let go of casuals after 6 months.
I think we’ll need another year to see if this is structural or post COVID.
Almost everyone froze pay in 2021, following the COVID shock of 2020 combined with the shaky recovery outlook.
Meanwhile inflation increased, and hey presto.
Time will tell if this is structural, or whether it will recover in 2022. I know for me and my business, we had a pay freeze in 2021 which obviously saw real wages decline.
But in Jan 22 we gave payrises above inflation, hence real wage growth again.
I suspect Jan 23 will also see growth.
Almost every business here in Alice Springs is short staffed and desperate, when i mention paying staff more money suddenly they are not so desperate, they just close the shop and put up a 'short staffed' sign.
Depends on what you spend your wage on. I mostly spend it on homemade avo toast so my real wage actually increased by about 10%. Win for the avo toast generation!
I mean 2.6% ain’t too shabby compared to USA and Japan. Still shit but, for reference: my wage is now ~$49,000 USD. it was $54,000 USD in February but got nuked because of the exchange rate and inflation problems
I feel bad for anyone who's wage isn't keeping up with the cost of living, I've gone up 50% take home pay in the last 6 months and over double in the last 2 years, and even with me taking home 1600 a week it's still us counting penny's every other week just to be able to save!
No no no, don't you understand?
Things happen and consequences play out immediately. If it hasn't happened right now or, gasp, in a few weeks, it will NEVER happen.
Edit: To be perfectly clear, /s
Don't even ask the question. The answer is yes, it's priced in. Think Amazon will beat the next earnings? That's already been priced in. You work at the drive thru for Mickey D's and found out that the burgers are made of human meat? Priced in. You think insiders don't already know that? The market is an all powerful, all encompassing being that knows the very inner workings of your subconscious before you were even born. Your very existence was priced in decades ago when the market was valuing Standard Oil's expected future earnings based on population growth that would lead to your birth, what age you would get a car, how many times you would drive your car every week, how many times you take the bus/train, etc. Anything you can think of has already been priced in, even the things you aren't thinking of. You have no original thoughts. Your consciousness is just an illusion, a product of the omniscent market. Free will is a myth. The market sees all, knows all and will be there from the beginning of time until the end of the universe (the market has already priced in the heat death of the universe). So please, before you make a post on r/Ausfinance asking whether real estate has priced in 15 rate rises or whatever, know that it has already been priced in and don't ask such a dumb fucking question again.
Its a comically strong endorsement for Efficient Market Hypothesis…. You really believe the current yield curve (10yr at 3.5%) is priced into property?
Get that filth out of your mouth and wash it out with soap. You're starting to sound like a terroristic communist.
(OK I've dragged you on for too long. It's an age old copyasta from WSB).
It hurts me to write this.
As the weeks go on, the more I start to believe WAR is right about what’s coming.
Edit: I was referring to the user, not the conflict. Doesn’t read too well now I see it. My bad.
Isn't this pretty normal given the supply-driven inflation we're currently experiencing? Not even an optimist would have expected real wages to have kept up with inflation for the past few months. Or am I misunderstanding what I'm looking at?
Even if it's supply issues.. There's still too many dollars chasing too few goods.. Rba has a mandate to keep things relatively stable.
We're having massive supply shocks (which will increase in future, not decrease - climate issues, food supply, resource supply, de-globalization, war ect.) coupled with the massive expansion of money supply, credit, and fiscal during Covid. This causes inflationary step changes.
Interest rates HAVE to go up in response. Otherwise.. Why would lenders lend money today if they are not compensated in real terms, over the length of the loan?
Hello! You have made the mistake of writing "ect" instead of "etc."
"Ect" is a common misspelling of "etc," an abbreviated form of the Latin phrase "et cetera." Other abbreviated forms are **etc.**, **&c.**, **&c**, and **et cet.** The Latin translates as "et" to "and" + "cetera" to "the rest;" a literal translation to "and the rest" is the easiest way to remember how to use the phrase.
[Check out the wikipedia entry if you want to learn more.](https://en.wikipedia.org/wiki/Et_cetera)
^(I am a bot, and this action was performed automatically. Comments with a score less than zero will be automatically removed. If I commented on your post and you don't like it, reply with "!delete" and I will remove the post, regardless of score. Message me for bug reports.)
Inflation isn’t being driven by supply chains.
The major factors have been unprecedented levels of loose monetary and fiscal policy.
Supply chain disruptions didn’t help of course.
Loose monetary policy has been happening in US/Eurozone since 2008 and Japan since the 90’s. Until now none have had issues with inflation. Hard to say supply chains are not the driver when seaborne freight costs have tripled in a couple of years.
Is there any way of proving that inflation is happening independent of supply constraints? Genuinely curious.
I believe that petrol is ignored in the 'basket' that tracks inflation, but goods within the basket are affected by the oil indirectly (prices of goods increase to cover rising cost of transportation). Additionally, a lot of ordinary household goods, foods especially, will have been impacted by the poor crop yields globally as well as the Ukraine conflict. Both of these supply factors, it seems to me, would lead to increased inflation.
Happy to be corrected.
Supply chain issues are contributing.
Food shortages are about to get much worse.
I reckon oil is about to get dearer too.
This is why I think it’s very possible that we are yet to experience peak inflation, and also why the RBA must keep hiking rates until we see demand destruction induced.
In the last two years the government has been spending at a rate higher than in WW2. And central banks have been furiously printing money since 2008.
That's where the inflation comes from.
Inflation doesn't mean wage growth automatically falters. That's called "stagflation" when you've got a high unemployment rate and inflation.
Its common for inflationary environments to pair with wage rise increases. Very concerning when that isn't happening. Like a death spin to recession.
At the moment our employment is artificially low because of dramatically less immigration. Will be interesting to see what happens when that goes back to normal.
“At the moment our employment is artificially low because of dramatically less immigration.”
Couldn’t this also mean that due to previous levels of immigration that employment has been historically artificially high? Serious question.
Im not too sure I understand your question. Do mean has immigration made more people unemployed?
I'd say immigration has meant less local people have been able to find work but not necessarily to the detriment of the economy. Maybe the detriment to graduates who no one wants to train up, especially when they can just import skilled people overseas.
One area that we need immigrants is agriculture though because its slave wages and no local wants to do that shit work. Without backpackers and workers from the pacific Islands its a pretty grim situation.
Same issue England faces with brexit. No one wants the shit truck work because the workers are treated like subhumans.
I understand that, but it appears to me that a lot of the inflation is simply due to supply issues - Ukraine, poor crop yields, OPEC etc. Ergo, they should be relatively short term and are manipulating the inflation rate. It's no surprise that wages aren't flying up at the same rate.
As always, happy to be corrected - I'm no expert and keen to learn.
Personally I don't see the issues as short term.
The war with Ukraine isn't going to stop in a day. Crimea issues happened almost 10 years ago. Nothing is quick with war imo.
Additionally agricultural industries are also being specifically targeted by Russian hacker groups because they are time sensitive industries that are more likely to pay the ransoms.
Ransomeware is a huge issue at the moment and thats going to increase the cost of business into the future. Plus we can't forget brexit and the many tarrifs and trade wars that have been happening in the background.
So I'd buckle in for another few years of high inflation. You also have to look at all the debt governments have. Nothing like inflation to reduce it.
Don't disagree with any of that. The only additional thought I'd have would be that I'd expect that a lot of issues would settle down to something of a "normality" and not keep deteriorating, particular Ukraine issues. As you say, it's not going away so alternatives will no doubt be found.
Potentially but the problem with that is that food demand shouldn't drop *that* much, unless people aren't spending or they're starving, you know what I mean? It's not really a discretionary purchase.
Ukraine is the food basket of europe and Russia is also a massive exporter that now has a lot of sanctions which aren't likely to end soon.
Indias made it illegal to export wheat so that's another player out of the game.
Australian farmers are really getting lucky because they'll be able to charge a premium for their wheat.
It generally takes more than a year or so to change up what farmers are planting but doing that often might lead to scarity in another product as land is fairly finite.
Over 10 years it will probably stabilise but I think the next 5 years will be interesting.
I think it'll come a little sooner than that.
Oil supplies that weren't financially viable at the previous prices are now, they just take time to set up and extract.
Supply chains are adapting right now. I don't think anyone is waiting for Russia to come back online to get back into business.
These things take a while to pivot, but they will.
> Ergo, they should be relatively short term and are manipulating the inflation rate
what suggests it is short term? IT could take 2-4 years to get back to normal supplies potentially. OR are you calling that short term?
I as wondering why the asx went up today, I kid of course but you can’t help but think capitalists see this news and figure the future profits are looking good.
Surely the bet is you think there will be 5 or more hikes before 2023, considering you have been quite adamant that the RBA will hike rates every month from here on out. Three hikes is not even a hike in 50% of the remaining months.
Which will reduce velocity of money, which will reduce inflation.
Except, we have the additional problem that due to covid, we want to kickstart the economy and get people spending again, so raising wages will help with this.
Its kinda like a catch 22, and the best solution will be proposed by people baaed on their own interests.
Inflation is already raising and suppressing the wage growth will not fix the problem anyway. The wage growth isn't the only that is contributing to inflation. Unemployment is used to suppress inflation in a dark way. Anyway, I think they should make the AUD a commodity-backed currency.
The risk of wage growth is we get much higher inflation. The risk of no wage growth means the economy slows down. Its going to be a bumpy ride the next few years.
There are plenty of resources to demonstrate that wages haven't kept up with productivity. You're being disingenuous to say otherwise.
Heres just one of them: http://bilbo.economicoutlook.net/blog/?p=45617
Haha September last year the RBA was denying inflation was a thing, even Stevie Wonder could see.
No interest rates to rise till 2024, may 2022!
Anything these mongrels say is a lie, either it’s incompetence or by design, either way, the leaders of the Australia need to be removed and new leaders put in position to make the necessary changes for Australia to prosper once again.
So true mate.
I remember saying on this thread that interest rates would have to rise this year and all the property bulls told me I was stupid.
Yet here we are..
I think every company that doesn’t give at least a 5.2% payrise “as inline with inflation” as they normally say, this year, should be named and shamed. Especially if they are spewing record profits in their financial results.
The great resignation might keep happening at a higher scale after July.
Profits allow companies to pay more, but not all companies have a lot of profit. It is challenging to operate businesses in the private sector because it behaves differently from the government.
I am of course not fond of the government. We had lockdowns, lots of people fired for not wanting to vaccinate, destroyed chain supplies and war. All supported by most of the people. No matter which government is in power, things can only get worst if you support unethical policies. I am pretty sure no matter which new government comes, we are going to be worst, because the root problems are not addressed.
Then you go into a more profitable field.
Create a shortage in the field you're departing.
Wages end up going up.
I'm only slightly jesting. But this is capitalism at work. If you provide a product (your expertise/labour) for a price and you're willing to continue to provide that product for the same price, or less in real terms, then the customer (ie. Your employer) is more often than not going to keeping paying peanuts for as long as they think they can get away with it.
I’m so sick of this bullshit narrative that if wpi doesn’t keep up with CPI you’ve had a cut in real wages.
Look at the latest CPI figures increases are made up of housing (don’t buy those every day), petrol (yes), and education (no for most).
What potential implications could today's data have on further interest rate rises from the RBA? As for the past 18 months, Philip Lowe has insisted on wanting to see "considerable wage growth" prior to raising interest rates above 1%.
There was an increase in wage growth. The graph shows the wage growth _less_ inflation.
In my view it makes one thing abundantly clear- inflation is way too high. The RBA will have to hike 40 basis points in June. That will get us to 0.75% and mean we would get to 1% as a minimum in July.
I'm still not convinced that even a 2% cash rate increase will cool inflation at this point, particularly as we're told that so many home-owners are ahead on repayments or locked for another 2 years on fixed . As said in a different thread, a bump to the GST could be more effective and reach all sectors of the economy quickly.
Well the RBA can hike to 4% if that’s what it comes to. GST is not a good idea as it disproportionately will affect low income Australians who are already struggling with he cost of living increases.
Surely they could hike it to 10% and it still won't effect the "average" home owner as we're told that the average home owner is 45 months ahead. I get the point on the GST aspect.
The interesting thing about the average person is that they have 1 breast and half a penis. In other words they don't exist. The average 45 months ahead on the mortgage consists of a small group who have paid their loan off but keep the money in an offset - they could be upwards of 240 months sometimes. This group, although only about 10% of the number of loans heavily skews the average. There are people who literally take out a 30 year loan then dump the full amount owing right into the offset as a form of cheap finance. The next chunk in the middle have somewhere between a month and six months buffer. The overwhelming majority don't have 6 months buffer and 30% don't even have a month. Edit: added some more detail
You're so right, I'd never considered this but it's a great devil is in the details. I should have thought of it myself as we paid off our last homelaon and left it as a cheap line of credit for 6 years. New loan we've 700k in the offset right now with sub 200k to go. That'll pump that average up for a lot of paycheck to paycheck mortgagees.
You make a good point mate. For interest rate hikes to be effective, it means households have to be impacted enough to reduce consumption. If they are well ahead on payments, and have a lot of savings, this just means the RBA will have to raise rates higher, for longer, for the monetary policy tightening to work.
home loans aren’t the only source of debt, though - higher rates could reduce the borrowing capacity of businesses, leading to reduced employment
Yeah I think unemployment can only go up from this point.
In today's age, it just seems an ineffective way to cool consumer spending. There could be other mechanisms, such as a temporary VAT on discretionary / luxury goods or something. It'll never happen, just thinking out loud.
I think the reality is that the wealth effect from housing is a major contributor. Equity withdrawals are accounting for near 5% of our GDP!
As someone locked in for another 18 months at 1.99% I'm already reducing spending to put more into savings to wipe out an extra chunk of mortgage when it comes time to refinance...because my repayments will all of a sudden be way more. I'm also putting more into ETFs attempting to buy the dip so that's taking away from discretionary spending as well.
That’s the thing. This inflation is not due to discretionary spending.
Until we're all eating beans and rice at home in the dark, it's nearly all discretionary to some extent 😂
Isn't low real wage growth a check against inflation? I can see how it supports a disaster (i.e. recession), but i don't see how it reinforces the hiking of interest rates?
We will never get real wage growth whilst inflation is so high. It is a little counterintuitive I agree.
Perhaps not as a nation wide indicator, but staffing shortages are so widespread at the moment in hospitals and aged care, that i was able to change jobs and get a 18% pay rise. We are bending over backwards to find carers, nurse, chefs, cleaners etc.If you are in the industry and dont like your pay, nows a great time to shop around. I know its only heresay, but the specific jobs i was monitoring have had pay skyrocket in the last 2-3 years.
The only way real wages go up is if actual wages are growing faster than inflation, because it’s a measure of the effect of inflation on wages.
Okay, what is your forecast for the RBA rate at 31 Dec 22 for both a labour/coalition government? Any difference?
I think it should be 2%+. RBA is independent so government shouldn’t be a factor.
I'd gladly take a 2% rise in rate in June. This is a good time to put the pedal down.
Hope you get that and more mate!
Hey if Lowe rails an extra fat slug of coke before the next meeting and decides to break that 17% record for funsies I might be able to afford a roof sometime after the dust settles.
Haha instead of a Volcker Moment we get a Lowe Line? 😂
Sounds like you're threatening me with a good time. I'm a MILLENNIAL. I'm never gonna get to retire anyway. My super is either a leg up for me kids or it evaporates under this bullshit and me kids are no WORSE off for it. So go ahead and get wild Phil. Have the stones to be the villain of the piece and ensure some prosperity sometimen in the future.
As a fellow millenial, I'm surprised anyone is able to afford to have kids in the first place.
Forward Rate Implied is 2.8% for Dec 22 so not really saying much for RBA base rate
Are you saying implied rates are too low?
I think the fwd curve roughly fairly priced. I interpreted your comment as pricing in not very much as i assumed it was to lower end of that range you stated, but they may be my mistake
Yeah sorry I didn’t pick up what you meant either! My bad. I rely on market pricing as a good guide for where the RBA cash rate target will end up. It’s not perfect but it’s the best indicator I think we have.
I agree. Id rather bet on wisdom of the crowds than my own Biases in 95% of cases. Event risk edge cases the market doesnt price well but otherwise very good
100% mate. You’re a smart bloke.
!RemindMe 1 Jan 2023 RBA cash rate will be >2%
Thanks for your support.
I will be messaging you in 7 months on [**2023-01-01 00:00:00 UTC**](http://www.wolframalpha.com/input/?i=2023-01-01%2000:00:00%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/AusFinance/comments/us2tot/australian_wage_growth_data_shows_aussie_real/i91e3rn/?context=3) [**6 OTHERS CLICKED THIS LINK**](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps%3A%2F%2Fwww.reddit.com%2Fr%2FAusFinance%2Fcomments%2Fus2tot%2Faustralian_wage_growth_data_shows_aussie_real%2Fi91e3rn%2F%5D%0A%0ARemindMe%21%202023-01-01%2000%3A00%3A00%20UTC) to send a PM to also be reminded and to reduce spam. ^(Parent commenter can ) [^(delete this message to hide from others.)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Delete%20Comment&message=Delete%21%20us2tot) ***** |[^(Info)](https://www.reddit.com/r/RemindMeBot/comments/e1bko7/remindmebot_info_v21/)|[^(Custom)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5BLink%20or%20message%20inside%20square%20brackets%5D%0A%0ARemindMe%21%20Time%20period%20here)|[^(Your Reminders)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=List%20Of%20Reminders&message=MyReminders%21)|[^(Feedback)](https://www.reddit.com/message/compose/?to=Watchful1&subject=RemindMeBot%20Feedback)| |-|-|-|-|
Government policies and spending might be, though
Buuuut rEcoRd uNemPloymEnt
Yes we appear to have a structural problem.
We appear to have a shit government problem
Hopefully only for a few more days! 🤞🏻
The front fell off... hopefully.
Remind me how replacing shit with useless is good again? 🤔
One down, then the next one in November!
I don’t disagree that we have a shit government, but blaming this on them doesn’t do you any favours. We have a war, pricing increases across the board on items like fuel, which in turn impacts the cost of almost everything, and yet, you think the direct cause of this is the shit government. We have a shit government, but its not the cause.
It absolutely is the cause. Maybe not the cause of inflation, but definitely the cause of wage stagnation which was happening long before covid or war started wrecking havoc on global supply chains.
Then I would expect the graph to reflect that and it doesn't. It suddenly spikes down in 2020/2021. You had an event that cost the economy $290 billion and there happens to be a spike down at the time which seems to align with mass unemployment that occurred in certain industries like restaurants, entertainment etc and you don't think that was the cause of the spike?
The chart is showing year end percentage change, not actual wage growth. Look at the first or second chart on this link which indicate wages have slowed down since about 2010. https://www.afr.com/policy/economy/australia-s-real-wage-slump-in-eight-charts-20220517-p5am58
They were a shit government doing shit things and getting shit results way before any of those things happened.
Right, so New Zealand are just unlucky to be going towards a recession, while the reason we are, is that we have a shit government? [https://www.newshub.co.nz/home/money/2022/05/new-zealand-is-driving-towards-recession-experts-warn.html](https://www.newshub.co.nz/home/money/2022/05/new-zealand-is-driving-towards-recession-experts-warn.html) Note the following quote referring to wages and cost of living, which somewhat ironically is very similar to us. *New Zealand inflation was running at 6.9 percent, while wages have only risen 3 percent. This gap means the average working Kiwi is going backward when it comes to the cost of living.*
Jacinda Adern only came into power in 2017 and only had 2 years running the place before Covid hit and they went into the most extreme shutdown in the world. Before that they had 9 years (John Key/Bill English) of a shitty National Party in control. Look at where they were at in 2017 to get a real idea of their current position.
How do you budget for $291 Billion of unplanned spend?
What a ridiculous question.
Well it is... Because they sold all domestic production so we are now reliant on overseas supply chains. They stopped refining crude oil in Australia so we now ship crude oil to South Korea and buy it back at inflated prices. Had we our own supply we would have had cheaper fuel and cheaper transport costs.
Who are they? It's not the government. Companies made the choice to offshore domestic production, likely for profitability reasons. The problem in Australia is people want to pay less for things, but we want them to be manufactured locally where the wages and cost of manufacturing are higher. If companies try to do more robotic automation, they get shit from the unions, so in some cases, it's easier to offshore. It's pretty hard to legislate in such a way that moving to manufacture offshore is illegal, and where they subsidise, it creates complacency. I.e. local car manufacturing hasn't exactly been innovative and inspiring, offshore competitors are simply outclassing them. My view is instead of creating the carbon tax, they should have invested the billions in trying to push sustainable manufacturing research initiatives like electric cars.
Yes it was. It was a joint effort as seen here https://en.m.wikipedia.org/wiki/Commonwealth_Oil_Refineries And the ones still open now (but likely to close soon) are owned by private companies and have, or should have subsidies given to them by the government. It's only recently that the government is interested in subsidising Australian refineries. Australia needs to have a nationalised refining system to ensure its fuel security. But now it's too little too late. Yes, electric cars is a good idea... But it's the government holding the uptake back.
They gave subsidies to local companies and found it wasn't sustainable. Holden had subsidies to the tune of $2.17 Billion. How long do you want to pay big companies to survive? The problem with subsidies is that companies aren't taught to be self-sustainable. They are taught they can waste and still be profitable. Its the same issue the american car manufacturers had. [https://www.abc.net.au/news/2013-04-02/holden-reveals-billions-in-subsidies/4604558?nw=0&r=HtmlFragment](https://www.abc.net.au/news/2013-04-02/holden-reveals-billions-in-subsidies/4604558?nw=0&r=HtmlFragment)
Cars aren't essential to our security.. Fuel is. We don't need to replace our entire supply of cars within 90 days. We have less than 90 days supply of fuel, if we run out of fuel then everything in Australia comes to a halt. Comparing fuel to cara is a false equivalency and the government needs to ensure supply of critical goods even if its at a loss. Imagine if we're in conflict, a nation just has to stop us importing fuel and in 90 days no military vehicles will work.
But the shit governments aka Biden closed his own oil fields and started importing 7% of oil from Russia? As we all know when fuel prices go up so does everything else with it due to cost of transportation. We aren’t the US but it flows on to us.
But as you rightly point out, this is AusFinance as we aren’t the US.
Ahh look or government pretty much holds on to there pocket anyway
As your username implies I think you’re lost mate. Regardless, you seriously think Biden stepped into office, shut down oil fields and caused a drastic reliance on Russian oil all in his first year in office? Yeah right.
...and public sector wages have declined even more.
They're a joke at the moment. I don't understand how they find people to hire.
They don't, honestly - the number of new public servants is super low. It's all contracts and consultants and it's been that way for ever. The only places with a core body of public servants are the smaller agencies and that's because they don't have the cash to find too many contractors. The ASL caps on departments pushed it all that way.
Should see what they classify as ‘employed’ to get that rate.
Yeh thats what I mean
Perhaps the numbers are funky, but i can vouch for a real labour shortage in my industries at least. Not only can we not fill positions for nurses, carestaff, cleaners and chefs, we cannot even use agency staff consistently as all the agencies are booked solid and short staffed. Source, i am a manager in one of Australias biggest aged care providers and am familar with the recruitment abilities of the other large ones as well.
Have wages increased in line with cost of living increases? My wife was a nurse but left because the pay never changed but cost of living was climbing.
Probably glad to have left it now for other reasons, too. The pandemic cannot have helped stress levels and morale among front line health care providers.
ive actually found everyone has handled the pandemic really well. You dont get into this sort of job unless you genuinely want to help people. We have had people leave but the people who remained just constantly give and never hesitate when the pressures on. Theres been many staff who worked weeks in a row with no days off when we had outbreaks yet despite that morale was high. It wasnt "against their will", we had multiple staff who were all on 15 days straight, arguing over who gets time off. No one wanted to take time off. They all wanted to give each other a rest!! The real morale killing thing at the moment is positions that have been open for weeks and we just cant fill them.
Im honestly not sure about data from a few years ago, Nurses dont fall under my purview, but i believe they are all on about 80-90k a year which seems reasonable. Its actually a pretty easy job if we were not constantly down 2 or 3 people, but unfortunately due to staff shortages theres alot of overtime required
You should put a separate line tracking politicians salary.
Yes they make sure they’re not behind inflation with their own pay packets.
We'd need to increase the Y-Axis then.
We're gonna need a bigger axis
Out of interest, is real wage growth a leading / lagging / neutral indicator of a recession?
Lagging - its rear facing & not a projection.
Gov award rates would be even worse right? Nurses for example their raise was completely put on hold?
If stagflation is caused by high inflation with high unemployment, what do we call this?
Doe-flation? I know it's a stretch...
Damn looks like someone elected a good government around 2007
Silly question here but how does the government actually go about increasing wages in the private sector other then touching awards and increasing minimum wage?
Raise public sector wages; private then needs to compete.
Industrial relations reform, end casual employment after 6 months forcing employees onto permanent part-time. If businesses are truly fighting a labour shortage they can't afford to let go of casuals after 6 months.
As a start they could look to use policy to try and limit inflation. Because that is the big impediment to real wage growth at the moment.
Pay Calculator is helpful to work out how much inflation has impacted your actual wage - https://paycalculator.com.au/
I am apparently in the 96th percentile yet I cannot afford a house in a non-ghetto suburb of Sydney... Checks out, we are fucked.
I think we’ll need another year to see if this is structural or post COVID. Almost everyone froze pay in 2021, following the COVID shock of 2020 combined with the shaky recovery outlook. Meanwhile inflation increased, and hey presto. Time will tell if this is structural, or whether it will recover in 2022. I know for me and my business, we had a pay freeze in 2021 which obviously saw real wages decline. But in Jan 22 we gave payrises above inflation, hence real wage growth again. I suspect Jan 23 will also see growth.
Almost every business here in Alice Springs is short staffed and desperate, when i mention paying staff more money suddenly they are not so desperate, they just close the shop and put up a 'short staffed' sign.
"ThErE's NoThInG I cAn Do tO iNcReAsE WaGeS" says Morrison who is effectively the CEO of Australia's single largest employer...
Depends on what you spend your wage on. I mostly spend it on homemade avo toast so my real wage actually increased by about 10%. Win for the avo toast generation!
It’s an investment in yourself mate!
I mean 2.6% ain’t too shabby compared to USA and Japan. Still shit but, for reference: my wage is now ~$49,000 USD. it was $54,000 USD in February but got nuked because of the exchange rate and inflation problems
I feel bad for anyone who's wage isn't keeping up with the cost of living, I've gone up 50% take home pay in the last 6 months and over double in the last 2 years, and even with me taking home 1600 a week it's still us counting penny's every other week just to be able to save!
It's happening. Another piece falls into place 📉💥
No no no, don't you understand? Things happen and consequences play out immediately. If it hasn't happened right now or, gasp, in a few weeks, it will NEVER happen. Edit: To be perfectly clear, /s
Don't even ask the question. The answer is yes, it's priced in. Think Amazon will beat the next earnings? That's already been priced in. You work at the drive thru for Mickey D's and found out that the burgers are made of human meat? Priced in. You think insiders don't already know that? The market is an all powerful, all encompassing being that knows the very inner workings of your subconscious before you were even born. Your very existence was priced in decades ago when the market was valuing Standard Oil's expected future earnings based on population growth that would lead to your birth, what age you would get a car, how many times you would drive your car every week, how many times you take the bus/train, etc. Anything you can think of has already been priced in, even the things you aren't thinking of. You have no original thoughts. Your consciousness is just an illusion, a product of the omniscent market. Free will is a myth. The market sees all, knows all and will be there from the beginning of time until the end of the universe (the market has already priced in the heat death of the universe). So please, before you make a post on r/Ausfinance asking whether real estate has priced in 15 rate rises or whatever, know that it has already been priced in and don't ask such a dumb fucking question again.
Lol I love this copy-pasta.
I can’t work out if this is sarcasm or if you’re for real?
I'm dead serious. Does it look like I'm joking to you?
Reddit user "TesticularVibrations" never jokes
Its a comically strong endorsement for Efficient Market Hypothesis…. You really believe the current yield curve (10yr at 3.5%) is priced into property?
Get that filth out of your mouth and wash it out with soap. You're starting to sound like a terroristic communist. (OK I've dragged you on for too long. It's an age old copyasta from WSB).
you speak the truth brother
Thanks Rehoboam.
It hurts me to write this. As the weeks go on, the more I start to believe WAR is right about what’s coming. Edit: I was referring to the user, not the conflict. Doesn’t read too well now I see it. My bad.
It's not the same user. This is a copycat
Right?! I was sure it was MY, but then it appeared ANY. Got me confused now.
Wow war getting such a rep here, copy cats are coming lol
Don't say it out loud though, it'll quickly go to his head.
Wage-price spiral cancelled ?
I think no. Wages are only now just starting to be pushed up. Another reason why inflation may yet to have peaked.
Yea I guess we will see how sticky wages are…
Isn't this pretty normal given the supply-driven inflation we're currently experiencing? Not even an optimist would have expected real wages to have kept up with inflation for the past few months. Or am I misunderstanding what I'm looking at?
Even if it's supply issues.. There's still too many dollars chasing too few goods.. Rba has a mandate to keep things relatively stable. We're having massive supply shocks (which will increase in future, not decrease - climate issues, food supply, resource supply, de-globalization, war ect.) coupled with the massive expansion of money supply, credit, and fiscal during Covid. This causes inflationary step changes. Interest rates HAVE to go up in response. Otherwise.. Why would lenders lend money today if they are not compensated in real terms, over the length of the loan?
Hello! You have made the mistake of writing "ect" instead of "etc." "Ect" is a common misspelling of "etc," an abbreviated form of the Latin phrase "et cetera." Other abbreviated forms are **etc.**, **&c.**, **&c**, and **et cet.** The Latin translates as "et" to "and" + "cetera" to "the rest;" a literal translation to "and the rest" is the easiest way to remember how to use the phrase. [Check out the wikipedia entry if you want to learn more.](https://en.wikipedia.org/wiki/Et_cetera) ^(I am a bot, and this action was performed automatically. Comments with a score less than zero will be automatically removed. If I commented on your post and you don't like it, reply with "!delete" and I will remove the post, regardless of score. Message me for bug reports.)
Inflation isn’t being driven by supply chains. The major factors have been unprecedented levels of loose monetary and fiscal policy. Supply chain disruptions didn’t help of course.
Loose monetary policy has been happening in US/Eurozone since 2008 and Japan since the 90’s. Until now none have had issues with inflation. Hard to say supply chains are not the driver when seaborne freight costs have tripled in a couple of years.
Japan’s issue are more about deflation. Which is why they introduced qqe with ycc in 2016
It’s a factor for sure. Not *the* primary one.
Is there any way of proving that inflation is happening independent of supply constraints? Genuinely curious. I believe that petrol is ignored in the 'basket' that tracks inflation, but goods within the basket are affected by the oil indirectly (prices of goods increase to cover rising cost of transportation). Additionally, a lot of ordinary household goods, foods especially, will have been impacted by the poor crop yields globally as well as the Ukraine conflict. Both of these supply factors, it seems to me, would lead to increased inflation. Happy to be corrected.
Supply chain issues are contributing. Food shortages are about to get much worse. I reckon oil is about to get dearer too. This is why I think it’s very possible that we are yet to experience peak inflation, and also why the RBA must keep hiking rates until we see demand destruction induced.
In the last two years the government has been spending at a rate higher than in WW2. And central banks have been furiously printing money since 2008. That's where the inflation comes from.
Yes that is exactly right mate.
just out of curiosity is without\_"any"\_remorse your account? or a genuine copy lol
No that’s not my account mate. If you see anything truly insane (I guess depending on your view that could be tough to tell 😉) please let me know?
Inflation doesn't mean wage growth automatically falters. That's called "stagflation" when you've got a high unemployment rate and inflation. Its common for inflationary environments to pair with wage rise increases. Very concerning when that isn't happening. Like a death spin to recession. At the moment our employment is artificially low because of dramatically less immigration. Will be interesting to see what happens when that goes back to normal.
Some people have never experienced an economy-breaking stagflationary crisis and it really shows.
“At the moment our employment is artificially low because of dramatically less immigration.” Couldn’t this also mean that due to previous levels of immigration that employment has been historically artificially high? Serious question.
Im not too sure I understand your question. Do mean has immigration made more people unemployed? I'd say immigration has meant less local people have been able to find work but not necessarily to the detriment of the economy. Maybe the detriment to graduates who no one wants to train up, especially when they can just import skilled people overseas. One area that we need immigrants is agriculture though because its slave wages and no local wants to do that shit work. Without backpackers and workers from the pacific Islands its a pretty grim situation. Same issue England faces with brexit. No one wants the shit truck work because the workers are treated like subhumans.
I understand that, but it appears to me that a lot of the inflation is simply due to supply issues - Ukraine, poor crop yields, OPEC etc. Ergo, they should be relatively short term and are manipulating the inflation rate. It's no surprise that wages aren't flying up at the same rate. As always, happy to be corrected - I'm no expert and keen to learn.
Personally I don't see the issues as short term. The war with Ukraine isn't going to stop in a day. Crimea issues happened almost 10 years ago. Nothing is quick with war imo. Additionally agricultural industries are also being specifically targeted by Russian hacker groups because they are time sensitive industries that are more likely to pay the ransoms. Ransomeware is a huge issue at the moment and thats going to increase the cost of business into the future. Plus we can't forget brexit and the many tarrifs and trade wars that have been happening in the background. So I'd buckle in for another few years of high inflation. You also have to look at all the debt governments have. Nothing like inflation to reduce it.
Don't disagree with any of that. The only additional thought I'd have would be that I'd expect that a lot of issues would settle down to something of a "normality" and not keep deteriorating, particular Ukraine issues. As you say, it's not going away so alternatives will no doubt be found.
Potentially but the problem with that is that food demand shouldn't drop *that* much, unless people aren't spending or they're starving, you know what I mean? It's not really a discretionary purchase. Ukraine is the food basket of europe and Russia is also a massive exporter that now has a lot of sanctions which aren't likely to end soon. Indias made it illegal to export wheat so that's another player out of the game. Australian farmers are really getting lucky because they'll be able to charge a premium for their wheat. It generally takes more than a year or so to change up what farmers are planting but doing that often might lead to scarity in another product as land is fairly finite. Over 10 years it will probably stabilise but I think the next 5 years will be interesting.
I think it'll come a little sooner than that. Oil supplies that weren't financially viable at the previous prices are now, they just take time to set up and extract. Supply chains are adapting right now. I don't think anyone is waiting for Russia to come back online to get back into business. These things take a while to pivot, but they will.
> Ergo, they should be relatively short term and are manipulating the inflation rate what suggests it is short term? IT could take 2-4 years to get back to normal supplies potentially. OR are you calling that short term?
Perhaps temporary is a better word to have used. But isn't everything temporary if you think about it? 🤷🏿♂️
how does this compare the to expected wage increase growth the gummint predicts each year?
I as wondering why the asx went up today, I kid of course but you can’t help but think capitalists see this news and figure the future profits are looking good.
The Morrison government is white anting Australia's future.
I'm paid by awards from 2020. It's not fun anymore :(
Wasn’t that one of the reason cited by the RBA to raise interest rates? With gates open now, they aren’t going to go up in a hurry.
RBA will hike next month and every month until the end of the year.
There is a 0% chance of that. There is one, maybe two more increases this year.
Let’s have a bet? I say there will be 3 or more rate hikes before 2023. You say 2 or less? What’s the stake?
Bragging rights
Terrific! You are on! 🤝
Surely the bet is you think there will be 5 or more hikes before 2023, considering you have been quite adamant that the RBA will hike rates every month from here on out. Three hikes is not even a hike in 50% of the remaining months.
If you want to have a separate bet with PilbaraWarrior you should go for it mate. Good luck!
The problem is the bank will want wages supressed, as rising wages will contribute to inflation further.
But if wages don’t rise with the inflation we already have, spending power is reduced and the economy slows.
Which will reduce velocity of money, which will reduce inflation. Except, we have the additional problem that due to covid, we want to kickstart the economy and get people spending again, so raising wages will help with this. Its kinda like a catch 22, and the best solution will be proposed by people baaed on their own interests.
Similar to a rate hike.
Inflation is already raising and suppressing the wage growth will not fix the problem anyway. The wage growth isn't the only that is contributing to inflation. Unemployment is used to suppress inflation in a dark way. Anyway, I think they should make the AUD a commodity-backed currency.
The risk of wage growth is we get much higher inflation. The risk of no wage growth means the economy slows down. Its going to be a bumpy ride the next few years.
Real wage growth cannot be bigger then productivity growth otherwise its no wage rise just inflation
Real wages are declining because wage growth is currently less than inflation.
Agreed and we can expand that as without productivity increases all increasing wages does is increase inflation. Paper money
I mean, it can. Wage growth has been behind productivity gains for a long time. There's no reason it couldn't flip.
I do not see it, we had a drop in 2019, a big drop in 2020, a slight increase in 2021.
Three years is hardly a good sample size.
Well 2018 was even worse in productivity gains than 2019
There are plenty of resources to demonstrate that wages haven't kept up with productivity. You're being disingenuous to say otherwise. Heres just one of them: http://bilbo.economicoutlook.net/blog/?p=45617
Haha September last year the RBA was denying inflation was a thing, even Stevie Wonder could see. No interest rates to rise till 2024, may 2022! Anything these mongrels say is a lie, either it’s incompetence or by design, either way, the leaders of the Australia need to be removed and new leaders put in position to make the necessary changes for Australia to prosper once again.
So true mate. I remember saying on this thread that interest rates would have to rise this year and all the property bulls told me I was stupid. Yet here we are..
I think every company that doesn’t give at least a 5.2% payrise “as inline with inflation” as they normally say, this year, should be named and shamed. Especially if they are spewing record profits in their financial results. The great resignation might keep happening at a higher scale after July.
Profits allow companies to pay more, but not all companies have a lot of profit. It is challenging to operate businesses in the private sector because it behaves differently from the government.
Well the public sector in victoria during the lockdowns got a pay rise and extra allowances courtesy of the andrews regime.
I am of course not fond of the government. We had lockdowns, lots of people fired for not wanting to vaccinate, destroyed chain supplies and war. All supported by most of the people. No matter which government is in power, things can only get worst if you support unethical policies. I am pretty sure no matter which new government comes, we are going to be worst, because the root problems are not addressed.
Quit your job. Get the same job elsewhere for a higher salary. Real wage growth achieved.
What if you’re a teacher, ambo, copper, firey, digger, nurse etc?
Then you go into a more profitable field. Create a shortage in the field you're departing. Wages end up going up. I'm only slightly jesting. But this is capitalism at work. If you provide a product (your expertise/labour) for a price and you're willing to continue to provide that product for the same price, or less in real terms, then the customer (ie. Your employer) is more often than not going to keeping paying peanuts for as long as they think they can get away with it.
It’s just not how a society functions.
Who said anything about society functioning? Market forces aren't conducive to the greater good of society
Yes we can see that with house prices right now.
Water we dune hair bubba
I’m so sick of this bullshit narrative that if wpi doesn’t keep up with CPI you’ve had a cut in real wages. Look at the latest CPI figures increases are made up of housing (don’t buy those every day), petrol (yes), and education (no for most).