RBA boss says it's time for most Australians to get a pay rise
Reserve Bank governor Philip Lowe has urged the nation's employers to give workers a solid pay rise, saying "year after year" of poor income growth is a much larger threat to the economy than falling property prices in Sydney and Melbourne.
In testimony to a parliamentary committee that suggests the bank has set a high bar for any cuts in official interest rates, Dr Lowe backed recent increases in the minimum wage while arguing most Australians needed a large payrise to kickstart the economy.
The Reserve recently downgraded its forecasts for the economy although Dr Lowe said growth of 3 per cent, unemployment at 5 per cent and inflation at 2 per cent were still "not a bad set of numbers".
The downgrade was largely due to soft household consumption, which has stretched from discretionary retail goods to major purchases such as new vehicles.Dr Lowe said the slowdown in household spending was due to the lack of higher wages flowing into consumer paypackets, adding that productivity gains made across the economy over the past 5 years had not been passed on to workers.
"Since 2016, aggregate household disposable income has grown at an average rate of around 2.75 per cent per year. This is down from an average of 6 per cent over the preceding decade," he said.
"It is plausible that households have responded to this extended period of weaker income growth by progressively downgrading their spending plans. For many people, it has become harder to see the lower growth in income as just a short-term development that can be looked through."
https://www.canberratimes.com.au/politics/federal/rba-boss-says-it-s-time-for-most-australians-to-get-a-payrise-20190222-p50zm0.html
An eminently reasonable policy position, which some of us have been espousing for some considerable time.
If those that have the cash, don't share it around no one will win in the long term IMO.
Raider
