Via Westpac:
Governor Lowe opened his comments with the observation that he felt he was the odd one out; a central bank governor that had not experienced negative interest rates, had avoided implementing QE and does not provide forward guidance. But he then noted the striking similarity in the Australian economy with most other economies in that inflation is presently low, or the target range, and that wage outcomes continue to disappoint despite a tightening labour market.
From this point his comments follow some broad macro ideas around why wages are so low such as: globalisation thus increasing competition in the labour market; the increasing speed of technological change and the resulting drive of legacy firms to respond with great cost control; and, the increasing flexibility in the labour market via rising participation of older workers. He presented a very clear argument for why the RBA believes wages growth is unlikely to pick-up a meaningful way any time soon (and you can see the full details here or here).
