Competitiveness up as productivity matches wage increases

The rate of
wage increases is making Australian exporters more competitive, according to
comments made by the assistant Reserve Bank of Australia government.

The ABC reports that the RBA’s Christopher Kent said in a speech that productivity
growth had matched wages growth over the last year-and-a-half.

“As a result, there has been no
increase in the cost of labour required to produce a unit of output,”
said Kent.

Fairfax notes that the comments come
after ABS figures for the year to March show hourly pay rates up only 2.5 per
cent, lower than an inflation rate of 2.9 per cent.

Unit labour costs have stopped their rise
in relation to the country’s trading partners, meaning
that exporters will have become more competitive.

Kent said the main concern in future would be the availability of workers as baby boomers retire.