![\"Person](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/person-with-payout-of-new-zealand-dollars-stock-photo-COCYGM5ATBDBJN2MMRMTLL435Q.jpg\")
<\/p>\nSix figures used to mean a comfortable life across the Tasman, but not now, writes Christopher Hoy.<\/p>\n
Figures released this week by the Australian Bureau of Statistics (ABS) show that over the year to December, wages grew by 3.4%.<\/p>\n
For households, however, the number that really matters is what happened to wages after inflation.<\/p>\n
Over the same period, the consumer price index (CPI) rose by 3.8%. This means real wages (wages after accounting for inflation) actually went backwards.<\/p>\n
That\u2019s just today\u2019s story. The deeper story, which has now been playing out for several years, is the erosion of Australians\u2019 sense of what a \u201cgood\u201d wage is and how we think about wage inequality.<\/p>\n
Many people are feeling the pinch of inflation when paying their rent, groceries, insurance, child care and other costs. That\u2019s why even a decent pay rise can be underwhelming. Because inflation doesn\u2019t just squeeze budgets. It quietly moves the goalposts.<\/p>\n
The morning’s headlines in 90 seconds, including a man is killed at Mar a Lago, and why Andrew Mountbatten-Windsor\u2019s in the Louvre. (Source: 1News)<\/p>\n
Shifting benchmarks<\/p>\n
Earning “six figures” \u2013 A$100,000 a year or more \u2013 is far from what it used to be.<\/p>\n
For many people, cracking six figures once signalled you could live very comfortably.<\/p>\n
Australians face a huge variety of circumstances, so it\u2019s impossible to say a particular wage level is objectively “good”. But our estimates suggest that only around one in ten full-time workers in Australia earned A$100,000 ($118,000) or more in 2010. By 2025, this had risen to almost one in two, at 45%.<\/p>\n
Despite this, many households on that level of income don\u2019t feel overly comfortable, especially in big cities where housing costs have risen sharply in recent years.<\/p>\n
While wages have risen on average in recent years, they have not kept pace with inflation. To illustrate, if we adjust for CPI inflation, $100,000 today only has the purchasing power of about A$67,000 in 2010.<\/p>\n
So, when anyone today says “people earning six figures should be very comfortable”, they may be using an outdated benchmark given the new cost-of-living reality. That\u2019s why many people may feel like they\u2019re running to stand still, even on incomes that used to signal comfort.<\/p>\n
What Australians think about wage inequality<\/p>\n
A lot of the cost-of-living debate often mixes two different issues.<\/p>\n
The first is whether typical living standards are rising (which is about real-wage growth).<\/p>\n
The second is the issue of how wages are distributed across society (which is ultimately about inequality).<\/p>\n
In my recent research with co-authors, we studied how people perceive wage inequality.<\/p>\n
We asked a nationally representative sample of 1500 Australians to estimate what share of full-time workers are actually on low, middle and high wages. Then, we asked what they think a fair distribution would be.<\/p>\n
A clear pattern emerged: Australians systematically underestimate wage inequality.<\/p>\n
The gap is bigger than we realise<\/p>\n
Most respondents underestimated how \u201ctop-heavy\u201d the distribution of wages is \u2013 that is, how a small group of workers at the top are earning so much more than everyone else.<\/p>\n
<\/p>\n
Person with Payout of New Zealand Dollars stock photo. (Source: istock.com)<\/p>\n
This matters, because public perceptions shape policies.<\/p>\n
If people think the wage distribution is more equal than it really is, they may be less likely to support policies aimed at narrowing gaps.<\/p>\n
That\u2019s not because they don\u2019t care, but because they don\u2019t realise the true size of the problem.<\/p>\n
Australians want fewer workers earning lower wages<\/p>\n
Almost all respondents in our research expressed a strong preference for fewer full-time workers to earn low wages. This desire exists across political lines and income levels.<\/p>\n
Our results show when people are provided with accurate information about wage inequality, even far-right respondents become much more supportive of redistribution.<\/p>\n
That\u2019s a useful reality check, because public debate is often framed as \u201cenvy versus aspiration\u201d or \u201cus versus them\u201d. Our research suggests many everyday Australians are more focused on ensuring workers are paid enough to live comfortably.<\/p>\n
What today\u2019s wage release doesn\u2019t capture<\/p>\n
Today\u2019s numbers tell us whether real wages are rising right now.<\/p>\n
![\"Pay](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/wages-compared-salary-generic-stock-KRRZGVBUKFDNBNYZHRNL5BCCTY.jpg\")
<\/p>\n
Pay equity claims are probably only part of the reason why public sector pay has pulled ahead of that of the private sector. (Source: istock.com)<\/p>\n
If you want a clearer read on living standards than a single wage headline, here are three questions worth asking:<\/p>\n
Are wages consistently beating inflation? Even three months of wage growth can\u2019t undo years of lost ground when inflation rose sharply after the pandemic.<\/p>\n
Where are the gains concentrated? Industry and sector and gender differences shape inequality.<\/p>\n
Have we updated our mental benchmarks for how much money it takes to live comfortably?<\/p>\n
The cost-of-living story isn\u2019t just about today\u2019s number; it\u2019s about the benchmarks inflation has quietly rewritten.<\/p>\n
Christopher Hoy is a research fellow at the University of Melbourne. <\/p>\n