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Prices still rising faster than wages
Prices still rising faster than wages
The annual increase in the CPI of 4.6 percent shows prices still outstripping wages which rose only 1.9 percent in the year to June according to the Labour Cost Index.
Even after the 20 percent increase in GST, prices would still have risen more than wages with a rise of 2.5 percent. "Low income earners got very little out of the tax cuts and now are hit by rising prices," says Bill Rosenberg, CTU Economist.
"At June, anyone on less than about three-quarters of the average hourly wage had lost spending power since December 2008 even after the tax cuts were taken into account", says Rosenberg. "That's assuming their wages rose as fast as the average wage, but they may not have. Higher incomes have received higher percentage increases."
Over the year, food has risen 6.2 percent with fruit and vegetables rising 8.8 percent. Transport costs have risen 8.8 percent with petrol price increases a major driver. Housing has increased 3.7 percent. "All of these increases cover essentials for any household and are very difficult to avoid. They hit people very hard, particularly when they are struggling on a low income," Rosenberg says.
People will be continuing to push for compensation in their wages to meet these increased costs.
ENDS
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