Companies faced with skilled labour shortages are not giving wage increases but are instead offering one-off bonuses or more flexible work arrangements, the Reserve Bank of Australia (RBA) said.
“The reduction in access to foreign labour and reduced interstate mobility were cited by some firms as contributing factors,” the Bank said.
Members of the board noted that inflation was expected to rise temporarily during the middle of the year due to price pressures from supply bottlenecks and higher commodity prices.
“However, in most advanced economies, including Australia, spare capacity in labour markets is likely to contain underlying inflationary pressures for some time,” they said.
Shelley Robertson, the executive general manager of an iron ore mining company Mineral Resources, said that the lack of access to skilled labour was becoming an issue for the industry.
Commonwealth Bank chief economist Stephen Halmarick said in an online conference that wages were usually “the last thing to move”, and other factors were pushing up prices and inflation.
“But there are other costs out there that are rising; logistics, supply chain, insurance,” he said. “Costs are increasing; commodity prices are increasing. So there could be other sources of inflation other than just wages growth.”
Consequently, Halmarick said his bank forecasted that wages growth and inflation would recover earlier than what the RBA thinks.