I work in employment services and also write articles on employment and unemployment. There’s a story in today’s Sydney Morning Herald, which is a head scratcher.
The Federal Government is going to use the budget to increase wages because workers (mainly battlers) endured the largest drop in their after-inflation incomes since the introduction of the GST.
But the budget can’t drive wage increases. That’s not what Federal budget’s do. The news report says the Treasurer will lift wages to at least 3 per cent.
But how? Budgets are primarily spent on government services. It would be good to see aged care staff get an increase but they work in the private sector. Nurses might get a pay rise – if their state governments pass the increase on.
The same story says the Treasurer will “also lower the government’s unemployment forecasts to below 4 per cent.”
Government has little power to lower unemployment. Employers do that.
The government might try to create conditions where employers hire more staff but over the last 40 years, this has been a highly dodgy proposition.
The other factor is real unemployment – including those who have dropped out of the workforce – is around 10 per cent. You won’t read that in any newspaper.
Inflation is growing and wages are falling. It reminds me of the stagflation of the mid 1970s. Remember the petrol prices then?