Australian Bureau of Statistics, hourly pay rates excluding bonuses, as measured by Australia’s wage price index (WPI) rose by less than 2.1% in the year to March 2018, which is below levels last seen in previous recessions.
According to a report by Credit Suisse wage growth headwinds include:
- Unemployment is above the 5% wages pressure point
- Lower unionisation
- Increased labour flexibility
- Rising female participation
- Ageing population
So, what does this mean for retailers? Not only do people have less money to spend, and vast amounts of debt, unless a retailer has a competing and functional online presence, they are also losing out to offshore and local retailers who have risen to the challenge.
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Motley Fool contributor Rosemary Steinfort owns shares of JB Hi-Fi Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.