NSW public sector workers could be more than $6000 worse off over the next three years if inflation continues to rise and their wages remain frozen, unions say.
In a report released in Sydney on Sunday, Unions NSW also pointed to a real loss to wages for teachers, police, firefighters, prison guards and bus drivers under the forecasts.
It comes as public servants threaten to go on strike this Wednesday unless the NSW government commits to a 5.4 per cent pay rise by Monday.
A report from Griffith University Business School's Professor David Peetz projects the median public sector wage could see a shortfall of $6156.08 over the next three years.
This projection is based on forecast inflation rises and the state government's 2.5 per cent wage cap.
NSW public school teachers, who took strike action last month over wages and conditions, could lose around $6500 from their wages over the next three years.
Firefighters pay packets' would be down $5800 over the same period and nurses would be around $5200 worse off.
Unions NSW Secretary Mark Morey said some of the state's most important workers were being punished.
"Our essential workers saved countless lives and kept the state running throughout the most difficult two years in recent memory," he said.
"Now as the cost of living surges 5.1 per cent and higher they are being asked to accept a pay cut.
"Any wage movement below inflation is a pay cut."
The union is calling for a solution to the "crisis" in the upcoming state budget, including a fix for staff shortages and growing workloads, more secure work, allowing public servants to negotiate a pay rise, uniform wages for similar jobs across different government agencies and a pledge not to privatise more essential services.
"If Premier [Dominic] Perrottet refuses to adequately address these issues, unions will proceed with escalating industrial action across the NSW public sector," Mr Morey said.
Inflation hit 5.1 per cent in April, 2.7 per cent above wages growth, leaving Australians struggling to keep up with the rising cost of living.
It sparked calls for a rise in the minimum wage to help low paid workers but industry groups and unions are at loggerheads on a figure.
The federal Labor government has written to the Fair Work Commission, which is currently reviewing the national minimum wage, telling them people's pay packets should not go backwards under current inflation rates.