FACTORS IN DAMPENING WAGES GROWTH
* Casualisation. A higher take-up of part-time and casual work and self-employment is providing greater flexibility and control for workers, but it is also reducing aggregate wages growth.
* Job insecurity. Automation of jobs is having a hollowing-out effect on certain types of jobs and workers, forcing many of them to look for work in less well-paid and lower-skilled occupations.
* Falling unionisation. Studies show there is a wage premium for trade union members, including for workers with the same skills in the same sector. A one percentage point fall in unionisation rates reduces wage growth by a quarter of a percentage point in the following year, according to one international study.
* Real wage overhang. The mining boom delivered a wages boom which was largely absorbed by better producer prices. But once commodity prices started to fall there has been an adjustment, with very low nominal and real wages growth. This adjustment is still flowing through.
(Source: RBA research paper)
