Reserve Bank governor Philip Lowe has told a House of Representatives committee that the RBA is doing what it can to respond to slow wage growth, admitting his stance has been controversial, but has again stopped short of calling for a quick upswing.
The Reserve Bank has pointed to the concentration of cutting-edge software and information technology in a small number of businesses and narrow labour market segments as a factor behind flat wages growth.
RBA Governor Philip Lowe is maintaining his faith that the laws of supply and demand will eventually lead to higher wages, but has conceded that the low growth in pay is a global phenomenon that is troubling central banks and "no-one really knows how long it is going to last".
While retreating from his much-hyped "call to arms" for workers to demand higher wages, Reserve Bank Governor Philip Lowe today told a Sydney audience that a continuation of the current period of stagnation in wage growth would have an "insidious" impact on the economy.
Just a week after RBA Governor Philip Lowe called for workers to push for bigger wage rises, the FWC has approved a deal that secures increases of just 2% a year for his own 1000-strong workforce, but with the prospect, for some, of also winning performance-based bonuses.
Treasurer Scott Morrison has declined to support Reserve Bank Governor Philip Lowe's call for workers to push for wage rises, arguing that improved company profits are a surer way to put more money in more pockets.
The RBA has conceded its forecasts for wage growth have been "consistently too strong" for at least the past five years, but says there is limited evidence that the low rises are due to workers’ declining bargaining power.
RBA Governor Philip Lowe today used a House committee public hearing to restate his view that Australia's recent record of negligable wage growth may be nearing an end, suggesting that an improving local outlook amid a rebounding global economy would see increased pressure on employers to share the proceeds.