So, Australia is not different after all.

As we’ve explored this week, across the Western world workers have been enduring years of stagnant or, in some cases, falling wages, despite strong employment growth that has led to unemployment in countries like the US and the UK hitting record lows. That should be pushing wages up, and inflation, but it’s just not happening.

On Wednesday, the same thing was confirmed here. Despite a year of strong employment growth, wages have stubbornly refused to rise above the inflation rate. The only joy is in health and social care, the biggest-employing sector of the economy that is primarily government-run, and which is growing at a staggering rate as the National Disability Insurance Scheme is rolled out.

Even if the traditional link between low unemployment and inflation isn’t broken, economists like Saul Eslake think we won’t see any significant growth until 2019. For private sector workers, that will have meant six years of wages barely keeping ahead of inflation.

This is ground zero for the reaction against neoliberalism that has shaken politics to its core across the West: the perception that market economies aren’t working for ordinary people — but work just fine for corporations and the wealthy, particularly when it comes to tax. The response from business hacks like Richard Goyder or Grant King, that no one will get a pay rise until corporations make even higher profits, merely confirms that impression. It’s a reason why the government gets no credit for its economic management or strong jobs growth. Voters don’t care that people without jobs are getting them; they care that they haven’t been able to get a decent pay rise for years.

 

Barring an unexpected pick-up in growth in the new year, the government — to the extent it is capable of coherent policymaking or resisting efforts by its backbench reactionaries to obsess about social issues of no interest to the electorate — can’t persist with it’s “she’ll be right” narrative into the next budget. Since 2013 MYEFO, the current government has regularly forecast a pick-up in wages growth, only for it to remain stubbornly out of reach (indeed, the problem actually started in 2011 under Labor). The last three budgets have confidently asserted 2.5% wage price index (WPI) growth, which proved way too optimistic in 2015-16 and 2016-17, now the 2017-18 forecast is looking shaky too. How can it credibly try the same thing a fourth time?

It’s an entirely deserved problem. It’s the Coalition that has led the attack on unions in Australia, curtailing their power, demonising them, trying to impose draconian laws on them; it’s the Coalition that for so long bought the rhetoric from the business lobby that Australian workers were lazy and overpaid and needed the rigour of US-style workplace laws to enable businesses to cut wages, erode conditions and undermine union power. Now business has to face the consequences: weak demand and flat retail turnover because workers aren’t getting pay rises and have dug as far into their savings as they dare.

The message might be starting to sink in with some retailers, who have led the way in waging war on pay. The hospitality sector has dropped an effort to get Sunday penalty rates cut after being unable to produce evidence it would lead to an increase in jobs — the core argument of the “slash their pay” brigade.

In fact, the challenge for any smart business figures out there should be how to lift wages growth, not to find new ways to curb it. It won’t merely benefit demand, it might take some pressure off governments to kick corporations and dump liberal economic policies.