Understanding the Decline in Real Wages: What Benefits Do Aboriginals Get in Australia?

In recent years, Australia has experienced a concerning trend where real wages (adjusted for inflation) have fallen even as they have risen in most other OECD countries.

And according to the OECD’s Employment Outlook 2024 Australia’s real wages are 4.8% lower than pre-pandemic levels while across the OECD real wages on average have risen by 1.5%.

This decline in real wages is driven by both market and institutional forces, primarily reflecting a significant shift in the balance of power between employers and employees, favouring large corporations, which underpins the transition to enterprise bargaining and the imposition of wage caps on workers.

For example, wage caps introduced by the NSW government in 2012 limited annual wage increases to 2.5% for state government workers and despite being recently scrapped (2023) the damage had already been done.

So during the post-COVID inflation surge, these caps resulted in significant real wealth declines for average Australians.

And while wages and purchasing power for many Australians have declined, the wealthiest have seen significant increases in their fortunes.

Thus, this disparity has been exacerbated by inflation and rising living costs, disproportionately impacting low and middle-income earners.

What Benefits Do Aboriginals Get in Australia?

The Australian Institute of Health and Welfare (AIHW) provides a stark overview of the financial challenges faced by Indigenous Australians.

Income Support Payments: As of June 2022, 48% of Indigenous Australians aged 16 and over received some form of income support payment, significantly higher compared to the 24% of non-Indigenous Australians receiving similar payments.

Financial Stress: Over half (53%) of First Nations people aged 15 and over lived in households that could not raise $2,000 within a week for an emergency, an increase from 48% in 2014–15, whic highlights the persistent financial vulnerability within Indigenous communities.

Income Distribution: In 2021, 35% of First Nations people had weekly equivalised household incomes in the bottom 20% of the income distribution for all Australians, a slight reduction from 37% in 2016 but this still reflects a significant income disparity.

Personal Income: The median gross personal income for Indigenous Australians aged 15 and over in 2021 was $540 per week (up from $482 in 2016) but despite this increase, it remains substantially lower than the national median, underscoring the ongoing income inequality faced by Indigenous Australians.

So the data reveals that while the broader Australian workforce grapples with declining real wages, Indigenous Australians face compounded financial stress and systemic income disparities.

And addressing these issues requires targeted policies and actions to ensure equitable economic opportunities and support for all Australians.