The fact of the matter is that no one using modern economic theory could explain this: PAY GAP: Australian wages growth is stuck at record lows, and running behind inflation. Certainly you don’t find an explanation in the story which has only this:
With wages currently growing at an annual pace of less than 2%, and given evidence that it’s been hard to stoke wage pressures in other developed nations even with recent improvements in labour market conditions, it’s little wonder that some remain sceptical about a sharp turnaround in wages, particularly to levels back above 3%.
“The fact that wage growth is stuck in the doldrums comes as little surprise given the deterioration in Australia’s labour market, with the jobless rate climbing from 5.7% to 5.9%,” said Tom Kennedy, economist at JP Morgan, following the release of the report.
“We expect wage growth to remain unimpressive for some time given significant slack remains in the labour market.”
The problem has been obvious for almost a decade but only for those who have been classically trained.