{"id":137781,"date":"2025-09-15T00:33:07","date_gmt":"2025-09-15T00:33:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/137781\/"},"modified":"2025-09-15T00:33:07","modified_gmt":"2025-09-15T00:33:07","slug":"australias-workers-reaping-greater-share-of-national-income-than-before-pandemic-australian-economy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/137781\/","title":{"rendered":"Australia\u2019s workers reaping greater share of national income than before pandemic | Australian economy"},"content":{"rendered":"

Workers are now receiving more of the \u201ceconomic pie<\/a>\u201d than before the pandemic, with the increase in labour\u2019s share of national income delivering an extra $28bn into the pockets of Australians over the past year alone.<\/p>\n

Pat Bustamante, a senior economist at Westpac, said his analysis suggested that the tighter post-Covid labour market was behind the greater share going to workers, from an average of 53.8% through the 2010s, to more than 55% now.<\/p>\n

While the movement in the division of national income appears small, even fractional changes translate to tens of billions of dollars in an economy of about $2.8tn.<\/p>\n

The ABS splits total national income between labour and capital.<\/p>\n

The labour (or wage) share is the portion of total domestic income paid to workers in wages, salaries and other benefits. The capital share is the portion going to the owners of capital and land, including company profits.<\/p>\n

Unions decried a surge in the profit share<\/a> of national income in 2022, before Labor\u2019s jobs and skills summit in September of that year, which the government used as a platform to push through reforms to workplace laws.<\/p>\n

A graph showing the shift in wages share of national income over time<\/a><\/p>\n

As surging inflation undermined workers\u2019 real wages and mining companies\u2019 revenues surged amid a spike in commodity prices into 2023, there were also accusations of companies\u2019 profiteering from the cost of living crisis.<\/p>\n

Bustamente said companies were now finding it harder to pass on higher wage costs to their customers, which was leaving more in the pockets of workers and also easing pressures on inflation.<\/p>\n

Meaningful increases to the minimum wage over recent years had also played a role.<\/p>\n

After a decade of stagnant wages through the 2010s, Bustamante said there was evidence in the national accounts figures released last week that a high labour share could prove to be a new \u201cequilibrium\u201d, mimicking earlier periods of low unemployment.<\/p>\n

It was also a positive starting point as workplaces prepare for the potentially disruptive impact of artificial intelligence.<\/p>\n

\u201cIf AI generates productivity improvements<\/a> \u2013 which the IMF has estimated at an extra 1.5 percentage points of productivity a year \u2013 then if you can keep the labour market tight, there\u2019s no reason the wages share needs to go down,\u201d Bustamante said.<\/p>\n

Sign up: AU Breaking News email<\/a><\/p>\n

Gianni La Cava, research director at e61 Institute, said the profits versus labour share was often used as a proxy for whether \u201cthe capitalists are winners or the workers are winners\u201d.<\/p>\n

While these arguments were \u201cmostly politics\u201d, La Cava said, movements in the wages share of national income was still a \u201cpretty good indicator of worker bargaining power\u201d.<\/p>\n

\u201cIf it is a sustained increase since Covid, say over a few years, that would be a meaningful thing and it would suggest sustained cost pressures for firms.\u201d<\/p>\n

La Cava agreed that \u201cthe post-Covid strength in the labour share is related to the hot and inclusive labour market\u201d.<\/p>\n

\u201cBut I think the slightly longer-run trend is probably linked to the slowdown in productivity growth in the market sector.\u201d<\/p>\n

When real wages are growing faster than productivity growth, then employers are internalising the extra cost and so take a smaller share of the total income.<\/p>\n

Saul Eslake, an independent economist, said \u201cthe distribution of national income is a political, social and economic issue\u201d.<\/p>\n

\u201cThe wages share of national income has been declining for quite some time,\u201d Eslake said.<\/p>\n

\u201cOne of the points the ACTU made at the [economic reform<\/a>] roundtable is that in order to get agreement on what needed to be done to reverse the slide in productivity growth, it\u2019s reasonable to do that on the basis that the fruits of any improvement would be fairly shared.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Workers are now receiving more of the \u201ceconomic pie\u201d than before the pandemic, with the increase in labour\u2019s…\n","protected":false},"author":2,"featured_media":137782,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-137781","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/137781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=137781"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/137781\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/137782"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=137781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=137781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=137781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}