Is the high standard of living in Australia at risk due to wage stagnation?
New evidence from PwC suggests a global advancement in real wages by 2030 of both emerging and advanced economies. However, Australia is set for its wages to stagnate.
In 2011, Australia ranked as a leading economy with an average wage per month of $4471, France coming in second at $3821.
“The Australian mining boom and a depressed global economy afforded us our leading position. In relative terms, we’ve had it as good as it gets,” Jeremy Thorpe, economist and partner at PwC, said.
This is set to change. PwC’s data suggests that Australia’s average wage per month will be $4818 by 2030, lagging behind South Korea’s expected $5040, France’s $5022 and Germany’s $4911. The gap between South Korea and Australia will sit at $220 as opposed to 2011’s $909, indicating a slowdown in Australian growth while other economies prosper.
Thorpe attributed this to a decline in the Australian dollar and low productivity growth expectations.
“Unless we tackle the productivity challenge, Australians may have seen the best of it in terms of standard of living for some time,” he said.
Key HR Takeaways
To address this, PwC have outlined four key areas of people productivity that HR should focus on. Jon Williams, leader of PwC’s People Business, stressed that these must be addressed collectively:
Industrial relations: How can Australian organisations generate labour relations that are flexible, adaptive and non-confrontational so that both individuals and the economy can benefit?
Immigration: Is there a clear view on a “Big or Small Australia”? What are the implications on Australia for productivity and the skills needed to attract the right people for the future?
Employment tax: How can Australia’s tax environment encourage the right behaviours from both individuals and organisations to drive long-term productivity?
Organisational agility and flexibility: Are organisations able to change and adapt themselves for more efficient outcomes? Do they know how to change their operating systems and structures, or are they stuck in old models and approaches?
