"Anaemic" wages growth, a widening gap between rich and poor and a "powerful elite" of banks, insurers and multinationals are the main outcomes for Australians from 27 years without a recession.

Key points: A report from the ACTU analysing ABS data shows living standards have declined dramatically since 2015

A report from the ACTU analysing ABS data shows living standards have declined dramatically since 2015 The peak union body is calling for reforms to reduce job insecurity, lift wages and increase the Newstart allowance

The peak union body is calling for reforms to reduce job insecurity, lift wages and increase the Newstart allowance ACTU secretary Sally McManus says Australia is "more of a class society than we think we are"

That is the ACTU's take on inequality in Australia today — it is warning the policies of the Morrison Government could result in an American-style economy of dead end jobs, poverty pay levels and zero job security.

The peak union body has released a paper on inequality, declaring a potential "economic, social and political disaster" ahead of the federal election, as it warns that slow wages growth has caused the biggest fall in living standards in 30 years.

"The vast wealth generated over the last three decades has decisively gone into the hands of a privileged few," the ACTU paper argues.

"Profits, executive salaries and bonuses have soared, while average real wage growth has remained anaemic."

The ACTU's declaration of falling living standards and an income recession for many Australians is based on disposable income data from the Australian Bureau of Statistics over a three-year period.

The ACTU says Australia is experiencing an income recession and is calling for reforms to tackle stagnant wage growth. ( Supplied: ACTU )

ACTU secretary Sally McManus told the ABC's AM program that Australia is no longer "the land of the fair go" and argued that the economic policies of the Morrison Government have contributed.

"We've got an income recession — income is the amount of money that people have got compared to household items, and that is going backwards, and it's been going backwards for the last three years," Ms McManus said.

"We've had the governor of the Reserve Bank, for quite a while now, banging the drum about this and saying there's a problem.

"A couple of years ago he told employers they should just give workers pay rises. Now he's saying that the minimum wage should go up, so he's talking about actual intervention from the Government to do something about it."

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Australia at risk of going down same path as the US: ACTU

Ms McManus said, without intervention, Australia risks going down the path of the United States, including low wages, inequality and a poor safety net for the disadvantaged.

When pressed on whether the paper was alarmist and scare-mongering, Ms McManus said her concerns reflected the true Australia.

"No, it's true. It's exactly the same policies that are delivering us the same outcome," Ms McManus said.

"Donald Trump and people before him have followed policies that were very much based on neoliberalism — we have in Australia as well."

ACTU Secretary Sally McManus thinks Australia is at risk of going down the path of inequality seen in the US. ( Supplied: ACTU )

The paper warns that entrenched inequality is evidenced by declining "occupational social mobility" and that children at the bottom of the income ladder have little chance of moving upward.

"I think that's the story we tell about ourselves but that's not the case — it's a big problem," said Ms McManus.