Far from facing a wages explosion, the weak labour market is producing the weakest growth in wages for more than a decade.
The wage prices index calculated by the Australian Bureau of Statistics (ABS) rose by 0.7 per cent in seasonally adjusted terms in the December quarter.
Annual growth came in at 2.6 per cent through 2013, the figures released on Wednesday show.
That was the slowest annual growth in this key measure of wage costs since the index began in 1997.
It was also slower than the 2.7 per cent rise in the consumer price index over the same year, meaning wages fell in real terms.
The reason for the slowdown in wages is obvious.
Wages growth, especially in the private sector which is most responsive to market forces, is heavily influenced by employment growth, especially growth in full-time employment.
And not only did total employment post very sluggish growth, of only 0.5 per cent, last year, full-time employment fell by 0.8 per cent.
Since 1980, there have only been five occasions when full-time employment fell by more – in the wakes of the recessions of the early 1981-1983 and 1991, the near-recessions of 2000 and 2008, and in 1997 thanks to a combination of steep interest rate rises and the Asian financial crisis.
There are some signs that the labour market is starting to turn around.
The government’s measure of skilled job vacancies, released on Wednesday, posted a promising rise for January.
But it’s still a slow take-off from the bottom of a deep valley.
And it may be a matter of things not getting worse rather than actually getting much better as far as job creation goes.
The driving force behind job creation, which in turn drives wages growth, is economic growth.
Economic growth has been too slow to stop the unemployment rate from rising over the past couple of years.
And most economists, including the Reserve Bank of Australia’s forecasters, do not expect it to get back up to “trend” in the near future.
So, sluggish jobs growth and weak growth in wages will be with us for a while yet.