The Pay Rise That Wasn't

Real wages fell 0.6% again. I read that number the way I read most economic news these days: with the detached curiosity of someone watching a slow-motion car crash they’re also a passenger in.

I ran my own numbers through one of those inflation calculators over the weekend, the way you’d poke a bruise to see if it still hurts. It still hurts. I’m doing fine relative to a lot of people, hybrid IT job, mortgage that predates the worst of the rate rises, but even I’ve noticed the gap between what I earn and what things cost has been quietly widening for years. Not dramatically. Just steadily, like a tyre losing pressure. You don’t notice until you’re on the rim.

What struck me more than the number itself was the discussion under it. There’s a real split between people saying we need more regulation to stop the divide between haves and have-nots, and people saying regulation is exactly why small businesses can’t compete with the big players anymore. Both of these things can be true at once, and I think that’s the bit that gets lost. We’ve built a system with enough rules to strangle a small operator trying to undercut Coles or Woolworths, but not enough teeth to stop those same supermarkets posting record profits while insisting wage rises would be inflationary. That’s not really a regulation problem or a deregulation problem. It’s a “who wrote the rules and who benefits from them” problem, and the answer to that one isn’t complicated.

The bit that actually got me was someone pointing out that in 2024, real household income per person rose 1.8% across the OECD, and fell 1.8% here, the worst decline of any country with data. That’s not vibes, that’s the OECD’s own figures. When someone tries to tell you the government’s doing “pretty well considering,” it’s worth asking well relative to what, exactly.

I think about my daughter’s generation a fair bit with this stuff. She’s not thinking about super or mortgages yet, thank God, but she’s absorbing the ambient message that a steady job and a house are things that happen to other people, in other decades. There’s a comment in that thread about younger people not bothering with “gold watch professions” anymore, just retraining and moving on because loyalty isn’t rewarded. I don’t think that’s cynicism on their part. I think it’s an accurate read of the incentives.

None of this is going to resolve itself over a weekend, and I don’t think there’s a tidy policy lever that fixes it either, despite what half of Twitter seems to believe. Housing, wages, immigration, mining and agriculture propping up the dollar, it’s all tangled together in a way that makes single villains hard to find, even though it’s tempting to pick one. But I’ll say this without deflecting: a country this wealthy should not have this many people doing everything right and still going backwards. That’s not a market outcome, that’s a choice, and choices can be unmade.

In the meantime I’ll keep entering my salary into that calculator every year or two, mostly out of grim curiosity. Bit like checking the footy score when your team’s down three goals at three-quarter time. You know it’s not going to feel good, but you watch anyway.