Tue Sep 24 04:04:17 UTC 2024: ## Australians Face Longest Period of Economic Misery Since 2011, CEDA Research Finds

**Canberra, Australia** – Australians are experiencing the most extended period of economic misery in over a decade, according to a new analysis by the Committee for Economic Development of Australia (CEDA). The research, which examined the “misery index” from 2007 to mid-2023, found that while economic hardship has decreased from its peak following the COVID-19 pandemic, it remains at a high level.

The misery index, created by American economist Arthur Okun in the 1960s, combines inflation, unemployment, and interest rates to gauge overall economic hardship. CEDA’s research found that inflation, accounting for almost half of the misery experienced by Australian households between mid-2021 and mid-2023, was the primary driver.

“It’s been really tough for a lot of people,” said Liam Dillon, economist at CEDA. “The index reflects that we haven’t seen this level of tough times for Australians since 2011.”

While some economists agree that the current situation is challenging, others, like Ben Phillips from the Australian National University, believe the situation is not as dire as CEDA suggests. He argued that the early 1990s recession represented a more severe period of economic hardship.

“I don’t really think at the moment Australia’s in a period of serious economic misery,” Phillips said, highlighting the low unemployment rate of 4.2%.

However, economists are concerned that unemployment could rise sharply if labor hoarding by Australian firms proves widespread.

Richard Holden, an economist at the University of New South Wales, pointed to the cost of living crisis fueled by inflation as a primary concern. He said prices are around 15% higher than they were before the crisis, impacting living standards.

Holden also stressed the need for Australia to improve its productivity, which has been declining since 2019. He argued that increased productivity is critical to combat inflation and support wage increases.

“We’ve got declining productivity growth, productivity is going backwards,” he said. “That just makes everything harder in terms of fighting inflation and trying to deliver reasonable wage increases.”

While there is no easy solution to improving productivity, experts agree it is a key challenge for Australia going forward.

Read More