A report from think tank Per Capita is warning of an end to Australia’s long run of economic prosperity.

The report entitled ‘Paradise Lost?’ suggests that “Wage growth has slowed dramatically … in 2013 real wages actually contracted, taking $118 out of the pocket of the average worker.”

In 2014 wages were supported by low inflation and plummeting petrol prices.

But with petrol prices again climbing, and the Reserve Bank of Australia forecasting a rise in Australia’s inflation rate, real wages will take a hit.

“The outlook for Australian workers’ living standards,” says the report “is dimmer than it has been for a generation.”

The report included analysis of an often neglected aspect of work – commuting times.

Average work commuting times have risen from three hours and 37 minutes in 2002 to four hours and 50 minutes a week. This, says the report, adds up to an extra 56 unpaid hours a year; impacting upon the standard of living of individuals and families.

To maintain the current standard of living, suggests the report’s author David Heatherington, the government needs to enact policies to enhance labour productivity.

“We must lift our national investment in hard infrastructure like transport and broadband, as well as soft infrastructure like skills and education.”

But this must be done (he adds) while maintaining current employment protections. Such protections of minimum conditions, he argues, was what enabled the even distribution of economic prosperity throughout all income brackets.

Mr Hetherington warns that ‘Firms have grown increasingly powerful relative to workers in recent decades. And are able to keep the bulk of the gains of labour productivity improvements, rather than pass them on to workers.”

And his numbers don’t lie: Workers’ share of national income has fallen from 65.6 per cent in 2000 to 59.7 per cent in 2012.

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