Economists don’t expect new Government policies around Fair Pay and minimum wages will have any impact on wage inflation when employment data is released this week.
Wage growth is expected to have remained modest in the first three months of the year at an annual rate of around two per cent.
That is despite historically low levels of unemployment – tipped to come in at an annual rate of between 4.2 and 4.4 per cent.
Unemployment has been tracking at 4.3 per cent annually.
ANZ economists see it stuck at the same level, Westpac is picking a slight up-tick, to 4.4 per cent, and ASB sees it dipping to 4.2 per cent.
“Low business confidence appears to have led to a slower pace of hiring,” writes Westpac senior economist Michael Gordon.
In contrast ASB is picking that the labour market will have tightened slightly, citing employer indications in the Quarterly Survey of Business Opinion which pointed to more skills shortages.
ANZ economists have picked unemployment to remain flat at 4.3 per cent although they acknowledge risks in either direction depending on the flow through from business confidence.
Regardless, it looks set to remain at levels which economists often describe technically as “full employment”.
That has led to some debate as to why wage growth has remained so subdued. In fact it has been a major source of economic uncertainty globally as well as locally.