The way some politicians and business lobbyists have been carrying on lately, you could be forgiven for thinking Australia was facing some kind of wage explosion. Nothing could be further from the truth.

Once inflation is taken into account, average wages are barely rising, if at all. This very slow growth looks set to continue.

Pay scale.

The wage price index, produced by the Australian Bureau of Statistics, shows that wages rose by just 2.6 per cent last year - lower than the inflation rate of 2.7 per cent.

That means many workers are actually suffering wage declines when you take into account the rising cost of living. It's a far cry from the 3.5 per cent annual wage growth Australians have received during the past decade or so.