Workers’ share of national income moved within a steady band for the past 25 years but is now being skewed by mining profits, according to official data.
Workers’ share of national income moved within a steady band for the past 25 years but is now being skewed by mining profits, according to official data, undermining union claims that workers are being dudded by bosses.
Gianni La Cava, research director at the e61 Institute and 20-year research veteran of the Reserve Bank, suggested simplistic comparisons of wages versus profits were unhelpful to a serious debate.“There is a lot of discussion about a ‘profit overhang’ right now and some people point to a rising capital share of income as evidence of this,” Dr La Cava said.“The rise in the corporate capital share over recent years is due to two sectors – mining and finance.
When mining is removed from total profits, the story is very different. Non-mining profits declined from about 22 per cent of total factor income in the early-2000s to about 18 per cent this year.Illustrating the size of recent gains, mining profits as a share of current price gross domestic also surpassed non-mining profits for the first time earlier this year, according to data published by the RBA.
Known as the “real wages overhang”, it was these spikes that prompted unions to agree to wage freezes to bring down the ratio and stymie inflation at Bob Hawke’s economic summit conference in 1983.
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