• Tristan Angelini

What Causes the Wage Stagnation in Australia?


Recent reports have suggested that household incomes have improved. In fact, it has been better since the year 2013. Whether that is true or not, statistics are showing none of that. According to experts, household incomes have been stagnant since 2012. We all know that this has caused a major impact on the housing market because this made it even more difficult for many potential buyers to purchase a home, let alone, save up enough for a deposit.


So why is this happening?

There have been quite a several theories made regarding this issue. Some theories have included the effect of government policies or the industrial relations system. These are specific to the country and many experts find that it is completely untrue. Instead, they are saying that factors contributing to this issue include income growth in dollar terms but it’s not growing fast enough for the inflation and because of this, the taxes rise up. For the past seven years, incomes have not really moved, meaning wages, dividends, and government benefits. In simple terms, Australians have become poorer in the last several years. Is it unusual? Certainly is especially in modern economic history. There was a point in time where there was a very high-income growth in the country, specifically from 1993 to 2008. This was not an isolated case in the country—it also happened in different parts of the world.

Experts also pointed out the high-income growth was due to a mining boom. Even when that ended, the income growth continued. However, they qualified the wage stagnation as an after effect of the global financial crisis but was expected that it would go back to normal. That being said, Australia is really not alone on this issue.


Which other countries experience wage stagnation?

Wage stagnation or slower income growth has been something many countries are going through as well. In reality, it is quite common to many developed countries—America and the United Kingdom are two of the countries that are affected by this very issue. According to studies, New Zealand only has a slightly higher wage growth than the country, which is surprising to find out.


Now the question on so many people’s minds, can the government do something about this? If yes, what could be done?

Experts say that yes they can do something about it. One being, creating some policies that will improve or solve economic problems to improve the living standards of all Australians. However, it should take more willingness to make that happen. In the meantime, private institutions and organizations need to help at least make things easier for many individuals residing in the country. Smarter rules are definitely necessary.


Xotel was established to aid in the increasing number of homeless people in Australia due to high property prices. This would help struggling Australians to find affordable accommodation while saving up for their deposit. This way, the effects of this crisis would give additional stress to the community.

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