Why HR leaders should be preparing for the impact of soaring inflation
Recently released inflation data has revealed that an average worker would receive “a real pay cut” of “nearly $2,000 in the first half of 2022.” During turbulent times, HR leaders should be informed and proactive in helping their employees. Knowing critical information would also help management plan out necessary adjustments.
According to the Australian Council of Trade Unions (ACTU), the amount is “four times more” than what the federal government had projected in its budget presentation a month ago.
“Workers received an $800 pay cut in real terms in 2021, with the Morrison Government projecting an additional cut of $500 in the budget for the first half of this year. Today’s data shows that actual wage cuts this year will be four times more than projected, leaving workers nearly $2,000 worse off in the first half of the year and nearly $4,000 worse off by the end of 2022 if trends continue,” the ACTU warned.
The group has also claimed that the trend would only worsen the cost-of-living conditions in the country, noting that Prime Minister Morrison “has had years to act to address low wage growth but has refused to take simple steps like supporting increases in the Fair Work Commission’s Annual Wage Review.” ACTU has also pointed out the government’s lack of support for the Aged Care workforce’s pay case and its failure to deliver real pay rises to its own workforce, saying the latter is “one of the largest in the country.”
ACTU President Michele O’Neil has called the looming crisis as “the worst real pay cut for working people this century,” arguing that it has been “almost a decade of coalition Governments refusing to do anything to generate wage growth for working people.”
O’Neil has also faulted the government’s “promises” that wage growth is “around the corner” since “it has taken less than a month” for the budget’s projections “to fall apart.”
“Australian workers deserve a government that will stand up for their interests and fight for wage growth, not one that makes empty promises and sits by while their wages go backwards and cost of living sky-rockets,” O’Neil said.
Meanwhile, HR leaders should also prepare, strategise and draw up contingency plans to help alleviate the plight of their employees, given that the inflation rate’s impact would be felt across all industries.
