A new report from the ACTU, supported by the Australian National University’s Associate Professor Ben Phillips, using data from the ABS has concluded that living standards have plummeted since 2015. The research says living standards peaked in Australia in 2011 and slid dramatically 2015 and 2018 to sink to their current levels.
But not everyone is feeling the pinch. As Midnight Oil once sang, "The rich are getting richer".
According to the report, living standards are now lower than during the 1991-92 recession yet the number of billionaires in Australia increased by 26 percent to 43 in 2016-17 alone.
The report says living costs have increased 2.9% faster than wages growth.
"We've got an income recession — income is the amount of money that people have got compared to household items, and that is going backwards, and it's been going backwards for the last three years," ACTU secretary Sally McManus said.
What makes this research all the more troubling is that we have exited an economic boom period. But the ACTU's research says the result has been a consolidation, rather than distribution of wealth.
McManus said Australia is "more of a class society than we think we are".
The ACTU report, titled Inequality in Australia - An Economic, Social and Political Disaster Summary drew several main concussions. These were:
- Wage inequality: In recent years average real wage growth in Australia has stalled and most workers have not received the benefits they should have enjoyed from productivity improvements but the "wage crisis" has not been uniform across the labour market. Income inequality: New ABS data indicates that those in the top 20% of the income distribution receive nearly half of total “market” or “gross” income in Australia.
- Wealth inequality: Over 60% of all net worth in Australia is held by those in the highest wealth quintile while those in the bottom quintile hold just 1% of net wealth
- Inequality between capital and labour: Labour’s share of income is close to a 50 year low. The decline in the wage share in Australia is much greater than the OECD average and on par with the decline in the USA.
- Occupational social mobility: The children of families at the bottom of the income ladder have little chance of moving upward. Almost half of children of manual workers remain manual workers themselves, and only 12% become managers. This compares to 37% and 24% respectively in the OECD.
- The average ASX200 company CEO in 2018 were paid the median yearly wage for a worker every 4.6 days
- Between 2016 and 2017, the number of Australian billionaires increased by over 20 % (from 34 to 43)
The report paints a damning picture. Living standards for many are falling, we are more productive at work but don't receive the benefit of that increased productivity and the cost of living is increasing faster than our salaries and there is an increasing consolidation of wealth.
To finish the Midnight Oil lyric, "The rich are getting richer. The poor get the picture".