Wage dynamics in Australia have been permanently changed by foreign labour
Reserve Bank governor Philip Lowe says the ability of Australia's employers to "tap" global labour markets for foreign workers may have permanently changed wage dynamics in Australia. Key points: The last time wages growth in Australia was above 3 per cent was a decade ago RBA governor Philip Lowe says wage dynamics have been permanently altered by foreign labour It could take many years before wage growth hits 3 per cent again He also says if interest rates remain low for years, government spending will have to play a bigger role in the next downturn, because conventional monetary policy will be a diminished force. Speaking to the Economic Society of Australia on Thursday, Dr Lowe said with Australia's labour market becoming more "flexible" in recent decades, employers had found it easier to import workers from overseas. After the RBA's board meeting on Tuesday, Dr Lowe said borders would probably have to stay closed for another 18 months to two years before wage dynamics became "quite different".
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