Another economist has reported that the closure of Australia’s international border to immigration will very likely tighten the labour market and drive up wage growth.
This time it is Capital Economics’ Australia & New Zealand Economist, Ben Udy:
We expect wage growth to rise in earnest before long. The dramatic fall in the unemployment rate and the recovery in the underutilisation rate to near pre-virus levels in recent months shows the labour market is recovering quickly. What’s more, labour shortages are putting upward pressure on wage growth with the share of firms anticipating stronger wage growth over the next year soaring to its highest level since the GFC. We expect wage growth to rise from 1.5% in Q1 to more than 3% by the end of 2023.
The full text of this article is available to MacroBusiness subscribers
