A new report from the Organisation for Economic Co-operation and Development (OECD) has found that Australia has suffered one of the sharpest declines in living standards among developed nations over the five years since the Covid pandemic. The OECD's Employment Outlook, released on Tuesday, showed that real wages have failed to keep pace with rising inflation, eroding household purchasing power and deepening the cost-of-living crisis. The report warned that wages are expected to fall further in actual value this year, adding to pressure on Australian households.

According to the report, the value of Australian wages has fallen by 5.1 per cent since March 2021, in stark contrast to the average developed nation, which saw wage value rise by around 5 per cent over the same period. This was one of the steepest declines across the OECD, and follows an earlier report placing Australia's inflation second only to Iceland among developed countries. The OECD also noted a fall in the real minimum wage between April 2025 and April 2026, one of only 11 member countries where this occurred, hitting the lowest-paid workers hardest, though it acknowledged the labour market had remained broadly solid.