Australians suffer world’s biggest collapse in living standards (ALL EXPLAINED)

Prediction is that Australia will only bounce back by mid 2028 however, this bounce back will still be below our June levels of 2020.

Last year, Australian households experienced a dramatic drop in their real per capita household disposable incomes, with the decline being one of the most severe globally. This significant reduction in disposable income reflects broader economic challenges faced by the country, as Australians saw their purchasing power diminish considerably compared to previous years. The extent of this decline positions Australia among the nations with the steepest decreases in household income levels, underscoring the financial pressures that have impacted everyday life for many Australians.

Since the onset of the pandemic, Australians have similarly faced one of the sharpest declines in real per capita household disposable incomes. This trend has placed Australia among the countries experiencing the most significant reductions in income levels, reflecting the severe and prolonged financial pressures that have affected households across the nation. The pandemic has exacerbated these economic challenges, leading to a substantial erosion of purchasing power for many Australians.

According to the March quarter national accounts released by the Australian Bureau of Statistics (ABS), Australia's annual real per capita household disposable incomes experienced a dramatic contraction of 7.6% from their peak in June 2022. This significant decline has effectively reversed income levels to those last observed in early 2018. The data illustrates a severe erosion in household financial capacity over the past year, highlighting a notable deterioration in economic conditions and purchasing power for Australian households. This sharp drop is indicative of broader macroeconomic challenges and underscores the substantial impact of recent economic pressures on household finances.

The situation for Australian real wages mirrors this trend. When adjusted for headline CPI inflation, real wages in Australia are currently 7.1% below their peak level recorded in June 2020, as illustrated below.

Given this context, it is not unexpected that the most recent employment outlook from the Organisation for Economic Co-operation and Development (OECD) reveals Australia has experienced one of the largest declines in real wages globally.

The federal budget released in May forecasted that Australian real wages are not expected to return to the levels seen in December 2014 until mid-2028.

So, if this forecast actually plays out, Australians are looking at losing about 14 years' worth of progress in their living standards. Check out the chart—by mid-2028, Australian real wages are projected to be 4.3% lower than where they were in June 2020. This really paints a picture of how tough it’s going to be; it might take over a decade for wages to bounce back from these losses.

The reality is that Labor’s Mass immigration policy is heavily effecting Australians and their household incomes through several economic channels. When a substantial influx of immigrants enters the labor market, it increases competition for jobs, which can drive down wages, particularly in low-skilled sectors where many new arrivals are concentrated. Australia has had over 518,000 migrants enter the country in the largest intake in our history.

This heightened competition can suppress wage growth for local workers and lead to a broader income disparity. Additionally, if the rate of immigration outpaces the creation of new jobs, and it will since we are in a service economy being decimated by A.I automation, it exacerbates unemployment or underemployment among both in the new immigrants demographic and native workers.

Furthermore, increased population density will strain public resources and infrastructure, potentially leading to higher living costs that erode real income gains. Thus, while immigration can sometimes bring economic benefits, an uncontrolled or poorly managed influx will have a severe adverse effect.