The living standards of Australians are falling with annual real wages dropping on average by more than $100, new research shows.
Progressive think tank Per Capita wants immediate reform and investment in infrastructure to mitigate the threat to middle-income living standards.
It finds Australia is coming off the back of a decade-long productivity and resources boom that put an extra $484 in the pockets of workers each year.
Wages were no longer keeping up with inflation and workers were commuting an additional 56 unpaid hours per year compared to 2002.
They're also carrying more risk due to casualisation.
The study shows real wages fell by $118 per worker per year in 2013 and their share of national income fell from 65.6 per cent in 2000 to 59.7 per cent in 2012.
Wage growth remained low in 2014, however real wages increased as inflation fell.
The think tank says the trend will hurt the federal budget as lower pay cheques reduce income tax receipts.
It argues for the protection of the industrial relations system that had made Australia's economy so fair and believes the collective bargaining framework is weakening.
Governments must invest in infrastructure such as transport and broadband, as well as skills and education to boost labour productivity, it says.
"A reluctance to borrow is not an excuse for not investing," said author and executive director David Hetherington.
Labor said the report's findings were worrying.
"The government needs to stop attacking the wages and conditions of Australians and start acting responsibly," workplace relations spokesman Brendan O'Connor said.
The report used data from time Labor was in government.
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