Wage growth has recorded its lowest growth since records were kept. Illustration: Greg NewingtonCredit:
Wage growth is the key to recovery because wages are the greatest single driver of economic activity and employment. But rather than thinking of ways to get wages up, both sides are working on ways to slow them further.
Not that private sector employers will need any help. They always skip pay rises during recessions because, afraid of losing their jobs, workers know they’re in no position to argue.
But, while as individuals, firms benefit from cutting the real value of the wages they pay, especially when all of them do it at the same time, they all suffer because the nation’s households have less money to spend on the products of the nation’s businesses.
Robbing Peter to pay Paul ain’t stimulus