A new report by the think-tank known as Per Capita has found that Australian workers’ living standards are falling at dramatic rates. According to new data gleaned from the report, ‘real wages’ have dropped for the first time in over a decade, proving that Australia’s working class is indeed in a state of steady decline.

The data revealed that the average worker experienced a $118 drop in the purchasing power of their pay. During the 2013 year, as wages officially failed to keep up with inflationary rates, the average worker found that his or her hard earned pay enabled them to buy less. While the statistics didn’t improve much in 2014, it was evident that inflationary rates had fallen and that Australian workers were feeling some of the pressure ease off.

But the most worrying trend the analysis revealed was that the average workers’ share of national income dropped sharply from 65.6 per cent to 59.7 per cent across a twelve year period beginning in 2000. Per Capita executive director and author of the report, David Hetherington, says that this might have something to do with dwindling union membership and a loss in collective bargaining powers.

“We’ve seen this decoupling of productivity and wages and it’s because workers have less bargaining power,” Mr. Hetherington explained to the ACB’s Radio National Breakfast. “Union coverage has fallen to all time lows. You see increasing pressure around things like penalty rates, where the minimum wage should keep pace with the median wage.”

Accordingly, Mr. Hetherington asserted that increased expenditure on infrastructure, education and skill development was the only way to off-set the increasingly poor outlook for the country’s shrinking working-class.

“We need structural reform in terms of investment and productivity. So what we haven’t done well in the last 10 to 15 years is to use the proceeds of the boom to invest in the infrastructure and skills,” he said. “Secondly we need to make sure that we protect and maintain our wage bargaining framework that served us well for a century.”

Referring to the recent US recession, Mr. Hetherington insisted that the disconnect between GDP and ‘real wages’ can result in an economic death-spiral.

“It remains a fact that the vast majority of people in our society earn their primary income through work and, if we’re not delivering income growth through work, then living standards will suffer,” Mr. Hetherington reasoned.

For all Australian workers, it seems like the Per Capita report has raised some vital issues that are worth discussing. With long-term changes set to affect Australia’s economy, it’s more important than ever that the nation’s workers understand the true state of economic growth and fair development.

Without considering these factors, the gulf between the super-rich and the working class will continue to expand. And simply put, that’s the most un-Australian outcome possible.


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