Australians have lost 14 years of progress on living standards. A wages breakout? Please. If only | Greg Jericho

It is impossible for wages to drive inflation when they are actually rising slower than inflation

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Remember all that talk about wage-price spirals? About wages driving inflation? All that worry about a wages breakout causing interest rates to rise? Ahh yes, good times. It seems that many commentators and economists love fairytales, and the story that wages were causing inflation was never true and the figures released on Wednesday by the Australian Bureau of Statistics show just how much of a struggle it is for wages to keep up with inflation.

In December annual wage growth hit 4.2% - the fastest since 2009. Such strong growth brought with it the usual suggestions that wages were growing too fast and the Reserve Bank would be ready to hit the interest rates brakes.