In 2025 wages grew slower than inflation, which means that wages clearly are not the cause of rising prices. Not only have workers seen their purchasing power decline, but the RBA’s decision to raise interest rates has once again punished them for inflation that was not their fault.

Before I go any further, excuse me while I go to the calendar and mark off yet another three months without a wage breakout. It’s a ritual I have been able to do my entire working life.

There hasn’t been a wage breakout since I was in primary school, but do not worry, the RBA is still on the watch, ever on alert to raise interest rates in an effort to increase unemployment and lower wage growth.

Earlier this month the RBA raised interest rates because, as the minutes of the board meeting stated, “wages growth had also slowed only gradually, and unit labour costs growth remained high, supporting the view that the labour market remained a little tight”.

What this means is they believe too few people are unemployed (the labour market is tight) and as a result employers are having to keep offering better wages in order to entice people to work for them. This, they believe, is causing inflation to go up.

In response they increased interest rates in the hope that people will spend less, employers will cut back on staff and hours and as a result not feel like they need to raise wages.

The RBA never misses an opportunity to blame wages for inflation, because it really is the only reason to raise interest rates.

So it is a tad unnerving to discover that the latest wage growth figures showed that wages in 2025 rose just 3.4% – below the annual inflation rate of 3.8% and even below the 3.6% level of the old quarterly CPI:

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It meant that for the first time in more than two years the annual growth of real wages (ie taking into account inflation) went backwards:

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It is axiomatic that if prices are rising faster than wages, then wages cannot be the reason prices are rising.

My colleague at the Australia Institute, David Richardson, has used the forecasts in the RBA’s latest monetary police statement to show that the central bank itself knows wage growth is not fuelling higher inflation.

Richardson has taken into account wage growth and inflation forecast, as well as productivity growth and the share of the total economy made up of wages. This enabled him to then calculate what is causing inflation.

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It essentially boils down to two groups: wages and non-wages. The latter category includes mostly company profits and small business income.

Three years ago, this type of analysis found that profits were the main cause of inflation through 2021 and 2022. These latest figures show that “profit-push” inflation is back.

The recent inflation jump and the expected increases to come this year are not being caused by wages growth. The RBA’s own figures suggest the impact of wages on inflation is actually going to go down. Instead, we need to look elsewhere – at profits:

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The RBA also knows this.

In its February statement it noted that “strong demand enabled retailers to increase prices by more than might be expected given changes in the prices of imported consumer goods”. That is a polite way of saying companies raised their prices purely to increase their profits.

And guess what inflation measures? Yep, the rise in prices!

Oddly there was no mention of this in the minutes of the RBA board meeting that decided to raise rates.

In a totally unrelated note, this week JB HiFi announced a 7.1% lift in net profit for the half year, and last week the Commonwealth Bank announced it made a half yearly profit of $5.45bn – up 7%.

It’s always fun when profits can grow faster than inflation but apparently they are all good because profits come from thin air and have nothing to do with prices (or increased interest rates).

We now are at the position that the value of average real wages is the same as it was 15 years ago and just over 4% lower than it was in March 2021:

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Worse still, the Reserve Bank forecast that real wages will be essentially flat for the next two years.

That would be bad enough, but given the RBA itself is actively working to prevent wages growing faster than inflation, you can forgive workers for feeling the economy is rigged against them.

• Greg Jericho is a Guardian columnist and chief economist at the Australia Institute