OECD figures prove Australian workers really are worse off than the rest of the world
- Australia suffered biggest real wages drop
- OECD said inflation affecting Aussies more
- READ MORE: Grim news for mortgage holders
Australians struggling with the cost-of-living crisis really are worse off than most other workers in the world, new figures show.
The cost of living crisis is particularly bad in Australia because wages had lagged behind inflation for three years.
The OECD (Organisation for Economic Co-operation and Development) calculated that Australian real wages - taking into account inflation - were 4.8 per cent lower in in the March quarter of 2024 than they were at the end of 2019 shortly before the Covid-19 pandemic.
'This is one of the largest drops in real wages among OECD countries,' it said.
'Real wages grew in 2024 for the first time in nearly three years, but households are still facing pressure under the cost-of-living crisis.'
This made Australian workers even worse off than their rich-world counterparts in Spain, Germany and the United States, where wages have also fallen in real terms.
This is despite Prime Minister Anthony Albanese promising in 2022 to 'get wages moving' with new multi-employer bargaining laws.
'Real wages are now growing year-on-year in most OECD countries, in the context of declining inflation,' the OECD said.
Australians really are worse off than workers in most other rich-world nations, new OECD figures show
This made Australian workers even worse off than their rich-world counterparts in Spain , Germany and the United States, where wages have also fallen in real terms adjusted for inflation
'They are, however, still below their 2019 level in many countries.'
Australian wages lagged behind inflation from the June quarter of 2021 - as Sydney went into lockdown - until the March quarter of 2024.
This meant Australian workers effectively suffered a pay cut for three years.
Inflation is now at 3.6 per cent compared with 4.1 per cent for wages, but the real wage increase of 0.5 per cent is still rather weak in the face of higher rents, petrol and electricity prices.
Giving wage rises before taming inflation only risked putting further upward pressure on inflation which will negate the higher salaries; known as the price-wage spiral.
However the OECD said such a spiral was unlikely.
'As real wages are recovering some of the lost ground, profits are beginning to buffer some of the increase in labour costs,' it said.
'In many countries, there is room for profits to absorb further wage increases, especially as there are no signs of a price‑wage spiral.'
Australia's lowest paid workers are hardly much better off than they were five years ago, despite some big increases in the minimum wage.
Adjusted for inflation, the real minimum wage is only 2.3 per cent higher than it was in 2019, which was well below the 8.3 per cent median increase across the OECD.
Australia's 2.7million workers either on the national minimum wage or awards received a 3.75 per cent pay rise on July 1, which was only marginally above the 3.6 per cent inflation rate.
OCED Secretary-General Mathias Cormann (left with former treasurer Joe Hockey) resigned as Australia's Liberal finance minister in October 2020 and began his six-year term in Paris in June 2021
This took the full-time minimum wage to $47,627 which is still only half Australia's average, full-time salary of $98,218.
Unemployment is still low at 4 per cent and the OECD predicted it would only rise to 4.3 per cent by the end of 2025.
This would still be below the OECD average of 4.9 per cent.
'Labour market tightness keeps easing but remains generally elevated,' the OECD said.
The current OCED Secretary-General Mathias Cormann was formerly Australia's finance minister and began his six-year term in Paris in June 2021.
