Nice deflection from the real issues which is immigration, the lack of housing and the overall cost of housing to build. The amount of new property taxes state ALP have put in is criminal from a developers perspective.
I’m a union member and I understand that I need to be more productive and that my pay rise needs to be on the cusp of what inflation is otherwise it forever stays high. Then interest rates stay high.
If you want real wage growth have less overseas workers coming in and see businesses compete for workers.
I was replying to your posting of a graph about real wages, so, you are the one deflecting here. If your post was about housing shortages, immigration etc you may have a point, but it wasn't.
As for the productivity argument, that one fails in the face of productivity rising by more than wages, something which has happened for decades, and has been much worse in the USA where real wages have not risen since the 1970s. Not to mention the fact that the profit share of income has been rising, at the expense of wages.
Is it any wonder that real wages have gone backwards when the wage share of income has dropped? This is why we need stronger trade unions, because the power has shifted in the labour market in favour of employers and they benefit from this by increasing their share of income. I will add one rider on this though - we really need to break down the profit share of income into profit and economic rent - it is the case that the finance sector, which makes profit from economic rent, has increased its income share and that is not measured separately.
Inflation does not have to be the result of aggregate demand being too high, it can be the result of increases in supply prices or increases in profit margins.
The inflation we saw after COVID was largely cost push inflation as opposed to demand pull inflation.
Inflation has a lot to do with income distribution (income includes all of wages, profits and economic rent). Pricing decisions are made on the basis of profitability. If suppliers judge that they can push prices up and will still sell enough of their product to increase their profits then they will do so (look at the way the supermarket duopoly has increased margins while inflation is around). Mucking around with interest rates when inflation is not caused by excess aggregate demand might fit with the delusional fairy land you find in economics text books, but it bears little relationship with reality.
DS
