Social challenges

Real wages are falling

09/09/2022 PNG

The risk of a wage-price inflationary spiral is lower than in the past. Key structural changes in the labour markets in recent decades – namely, the removal of wage indexation and an increase in employer market power – now mean less upward pressure on wages, despite tight labour markets. However, this has left lower-income groups more exposed to declines in real incomes.

See also: OECD Employment Outlook 2022.