Australian Dream In Danger With Rising Unemployment, Falling Wages And Living Standards

The reducing purchasing power, low wages and increasing worker casualisation has led to falling standards of living in Australia. The lower fuel prices had resulted in reduced prices, but wage growth has remained low with workers commuting more unpaid hours compared to the last decade.

According to the an independent think tank Per Capita report (via Guardian) the living standards in Australia is worsening because of lower productivity, static wages and rising unemployment. In their report “Paradise Lost? The race to maintain Australian living standards” the lack of reform and changed international economic scenario has resulted in falling wages and the worrying trend would continue if the government does not pursue further economic reforms. This would involve raising the taxes and spending more on infrastructure projects, education, innovation and skill development.

The wage growth has been the most worrying trend in this decade. The study found that the wages dropped by $118 per worker and their share of national income came down by six percent. The wages are on an upward spiral but due to rising inflation the purchasing power has been dropping. As the living standard drops with increasing prices the bargaining power of the worker also suffers. According to David Hetherington of Per Capita, "the living standards are suffering because there is no delivery of income growth through work.” The average commute time has increased by over two hours and Australian workers undertook 56 hours of unpaid commuting per year. The part-time workers had increased by more than half with self-employed and full-time employees reducing by 30 percent. In the recent report the think tank (via Sydney morning Herald) also warned that the government failed to effectively utilize the proceeds realized through the boom years of the early millennia by investing in infrastructure and skill development.

The falling living standards impact the middle income and poorer sections of the society. The think tank report warns that the economic reforms of the early 80s and 90s have been exhausted and there is a need to initiate further reforms to focus on skill-building and innovation to kick-start the economy. Meanwhile, with the world lurching through the recession the deficit reduction would be much slower and the living standards in Australia would continue to fall.

For questions/comments regarding the article, you may email the writer at honeygeorge74.ibtimes@gmail.com.