Stuck in Neutral - The Policy Architecture Driving Slow Wage

Since the change of government in late-2013, the downward trend of the WPI has accelerated. [...] In addition, Australia experienced a mining boom in the latter part of the first observation period and a surge in iron ore prices in the last years of the second observation period. [...] An analysis on the drivers of wage growth in Australia released by the Australian Treasury (2017) notes that “public sector wage growth is low by historic standards.” The report observes: “The weakness in public sector wage growth is broad-based across the industries for which data on the public sector industry splits are available. [...] Allowing the growth of the gig economy without sufficient regulation In the last few years, the Australian economy has experienced an explosion of ‘gig work’ – jobs in which workers typically have less bargaining power and job security, and which often sits outside the reaches of the Fair Work Act. [...] A recent decision of the FWC in the Deliveroo case might be the beginning of a change in the legal status of gig workers from contractors to employees,10 which would potentially grant this growing cohort of workers greater bargaining power and alleviate this handbrake on wage growth.