The current anaemic growth in wages will have far reaching effects. Our economy is structured around large levels of consumption spending. Our State government’s precarious fiscal position is largely dependent on GST receipts which are directly impacted by slower wages growth.
Yet most of the discussion about low wage growth glosses over the fact that labour’s share of national income, as distinct from the share going to the owners of capital, has been in decline for years. Sharing the spoils was a feature of the 1950s and 1960s as labour’s share of the national pie grew. However, over the last 40 years, labour share of the pie has fallen by almost ten percentage points.