Why slow wage growth isn’t keeping us from the café

There’s been a mystery in the Australian economy. How the heck are we spending so much money in cafés when the cost of living is supposedly crushing us so badly? Café spending just keeps rising and rising, making a mockery of the idea of the oppressed Australian consumer.

Now the RBA has given us a big clue as to how it’s possible, with the following chart.

It shows an important difference. Wages per hour are rising less than inflation (left side). But actual income earned is rising more than inflation (right side).

People are doing more hours than before, getting more overtime, and pocketing bigger bonuses.