Reserve Bank governor warns about “insidious” slow wage growth
Reserve Bank governor Philip Lowe has warned that “insidious” slow wage growth is now a challenge for the central bank and means Australia will struggle to meet the bank’s inflation target.
“Wealth inequality has become more pronounced particularly in the last five or six years because there’s been big gains in asset prices,” the RBA governor said. “So the people who own assets, which are usually wealthy people, have seen their wealth go up.”
He said there were direct economic implications: “The main one is through wages, and if people feel like their wages aren’t growing anymore, they don’t want to spend when they get paid,” he said.