Why? Because it's direct and personal, especially for the people in the workforce who depend on wages and salaries. And that's 80 per cent of us, according to Bradley Bowden, professor of employment relations at Griffith University. And it's not just a winning political idea. This is a bit of a shock in political debate, I know, but as a matter of fact, he's onto something real. Loading Shorten even had the audacity to challenge an elite audience at The Financial Review annual business summit with the minimum wage: "It's about $18.93 for an adult. I don't know how many of you are living on $18.93 an hour." (Answer: none.) "If you don't want to live on it, why do we expect everyone else to live on it?" Not everyone else, Bill, that's not right. But it's not hard to imagine a cheer going up among the 2 million workers who do live on it.

"Class war!" the reflex response of the Coalition from another era, might have had force once. That's long gone. No less an establishment figure than the governor of the Reserve Bank of Australia has become an enthusiastic cheerleader for higher wages. The occupant of that post for most of the postwar era had an eagle eye for any sign of a wages takeoff because it was his job to smash it, stopping a rising spiral of wages and prices from taking hold. Opposition Leader Bill Shorten speaking at the Financial Review Business Summit 2019. Credit:Louie Douvis Today the governor, Philip Lowe, is trying to get one started. This is a different world. Indeed, Shorten quoted Lowe speaking of the "crisis in low pay". Why does the governor of the central bank on a salary of more than $1 million care? Because weak wages growth undercuts the economy. And because Lowe knows that a simmering resentment, if not addressed rationally soon, breaks out irrationally later.

Australian wages have been flat, after adjusting for inflation, for the last six years. The same phenomenon in the US, left unattended for a generation, produced blind fury. That's what Donald Trump represents - the pent-up fury of the overlooked working people of America, given flesh and high office. Too late for rational debate. Donald Trump is what you get when the frustrations of the working class boil over. Credit:Bloomberg Hillary Clinton's Democratic Party, preoccupied with elite politics and the big-dollop donors of Hollywood and Wall Street, lost sight of the working people of America. The Democrats are still lost in a frenzy of anti-Trump indignation and the eternal outrage of identity politics. Bill Shorten is not about to make the same mistake. In a November speech Lowe said: "Flat real wages are diminishing our sense of shared prosperity. The lack of real wage growth is one of the reasons why some in our community question whether they are benefiting from our economic success."

There is a real problem in the way Australia has been sharing the benefits of growth. A standard measure is to compare total company profits with wages. Both measured as a share of GDP. This shows a stark result - that wages enjoyed their highest share in the mid-1970s at 57 per cent, with the other 43 going to profits. The wages share - the workers' share - has been falling steadily since. Last year it was around 46 per cent. That's as low as it's been since the bureau of statistics started measuring it in 1959. It's almost a complete reversal in the sharing of the spoils of success between workers and profits. So what is the Coalition's response to Labor's wages campaign? So far we see two strands emerging. One is to pretend that there is no such problem. A Shorten line is to say that "everything is going up except wages". This week Treasurer Josh Frydenberg rejoined: "The truth is that wages have had the biggest jump in three years." Technically he's correct, but that's like saying "the NRL has gone three days without a sex scandal". Coming off a low base and not much to celebrate. And which politician has the better applause line? Illustration: John Shakespeare Credit: The government prefers to change emphasis to the big picture, to talk about economic growth and jobs growth. This is the Coalition's strongest political ground. It has a persistent "brand" preference with the voters as the party that better manages the economy. But if you change the metric slightly - "who is better to manage the economy in the interests of working people?" - the advantage swings emphatically to Labor.

Which explains the second Coalition response. Scott Morrison tells us that a vote for Labor is a vote for recession. Shorten shouts "higher wages"; Morrison screams "recession". Illustration: Jim Pavlidis Credit: Scare campaigns can be powerful and effective. But this one isn't the strongest. One reason is that, after 27 years of continuous economic growth, the electorate no longer thinks that it's really at risk. Headline GDP growth seems inevitable, not dependent on who happens to be in government at any particular time. Besides, the government's scare about a Shorten recession isn't supported by any credible economic forecaster, at home or abroad. The IMF, OECD, Reserve Bank and private sector economists all see Australia continuing to sail on serenely. Another reason is that, while Australia certainly is not in a recession, for many people it feels like one. Labor shrewdly grasped this - it declared a "per capita recession" this week, and the media were happy to run with the idea.

Loading "I mean, there was the Prime Minister warning of a recession the other day under the Labor Party," said shadow treasurer Chris Bowen, "Too busy to notice they've gone into a per capita, a per head recession, while he was prime minister." So while the government looks at the total size of the economy as measured by GDP, Labor divides it up by head of population. One finds healthy growth; the other a recession. If you're wondering why you hadn't heard of a "per capita recession" before, you're not alone. The Sydney Morning Herald and Age research library searched all Australian newspapers going back to 1854 for any references to "per capita recession". The first it appeared was in 2008. Since then, it appeared only half a dozen times. Until this week. So it's not been a term in popular parlance. Have we moved the goalposts on the government halfway through the game?

Loading But the eminent economist Ross Garnaut says it's not to be shrugged off. "It's not at all a strange concept," says the professor of economics at Melbourne University. "It's a central question. If you have high population growth it's extremely difficult to have a recession", simply because an increase in the population adds to economic activity. "But what people feel as a recession is real per capita household disposable income. That relates to per capita output, not total output." He points out that while the term "per capita recession" hasn't been in mainstream use, it has been in more specialised economic debate for the last decade. "People are grumpy about it," says Garnaut. "They don't know why they are, but they are. It's because we're in the dog days. Living standards stopped rising when the mining boom busted in 2012." Ross Garnaut says a per capita recession is a real thing. Credit:Eamon Gallagher That's why the question of wages is extra powerful just now. The government's responses - (a) it's not real and; (b) if you want to vote for someone who says it's real you'll get a recession - just don't cut it.

There are two viable responses available to the government. One is to change the topic whenever Labor mentions it. The other is much harder - propose a real solution. "The election should be about how we get out of the dog days we've been in," is Garnaut's heartfelt hope. And here is the rub. The government's plan so far is to do more of the same. Labor's is yet to fully emerge. The peak union body, the ACTU, is calling for the concept of the minimum wage to be dumped, replaced with a wage, a living wage, capable of supporting a worker's real needs. This is a harking back to the famous Harvester judgment in 1906 that said workers should be paid enough to support a working man with a wife and three children. Employers say it would be crippling. Is this a good idea? Shorten has left open this option of a return to a "living wage", but on condition that it be done gradually and in a negotiated way. "Shorten's is a way of kicking the ACTU can as far down the road as he can," says Griffith University's Bowden. Other areas of Labor's wages policy remain vague, too. Shorten is realistic enough to acknowledge that Australia's wages structure can't be magically raised by government diktat: "I recognise the future of work and productivity begins with adaptive, innovative employers, investing more capital, taking risks, being entrepreneurial." He promised a consensus approach, to find negotiated outcomes.

Provided he doesn't alarm the electorate by sounding like a firebrand bent on revolution Venezuela-style, wages is Shorten's strongest suit. And unless the government can come with a better response, it's kryptonite to the Coalition. Peter Hartcher is political editor.