Anecdotes Suggest Areas Of Wage-Price Spiral Risk

The childcare sector is showing that a wage-price spiral is certainly a risk, especially in certain area of the economy. The sector is seeing significantly higher labour costs to fill vacancies and retain staff, which are being passed on in higher prices. Such anecdotes are becoming increasingly important for the RBA’s assessment of wage developments.

• Labour shortages are resulting in staff being paid bonuses as well as rates well above award wages, given additional holidays and other non-wage benefits, such as travel and health insurance, according to the Australian. But this is being paid for by increased fees for parents, with them often rising more than once this year.
• The United Workers Union is lobbying for a 30% wage rise with this increase being paid for by the government.