The June quarter GDP figures released by the Bureau of Statistics showed that over the past year the economy grew a seemingly strong 3.6%.
But as labour market and fiscal policy director Greg Jericho notes in the Guardian Australia column, beneath those good numbers are a lot of problems, not the least of which is that wages continue to fail to keep up with inflation. Over the past year the total compensation of employees rose 7% but inflation in the national accounts rose 8.3%. Over the same period corporate profits went up 25%. We are at the absurd state of affairs where GDP is rising strongly, but real wages are not.
We now have a situation where a record low share of national income is going to employees and a record high share is going to profits.
The talk is always about lifting productivity and wages will follow, but the story for far too long now has really been productivity rising and profits following.