RBA governor Phillip Lowe wants workers to accept pay cut to save economy amid ... trends now
Reserve Bank boss Phillip Lowe has called on Australians to 'ride out' the period of rising inflation by not issuing pay increases despite cost of living concerns.
Dr Lowe, who earns more than $1million a year, explained in a speech on November 22 that wages needed to remain steady if Australians wanted to avoid another rate hike.
The RBA Governor wants any wage gains to be kept below 4 per cent, which means workers will effectively be taking pay cuts as the price of food, fuel and household bills rise.
'I know it's very difficult for people to accept the idea that wages don't rise with inflation and people are experiencing declines in real wages. That's tough. The alternative, though, is more difficult,' he said.
His comments have gained traction again on social media this week as Australians increasingly struggle with the cost of living crisis.
RBA governor Philip Lowe (pictured) has warned against issuing pay increases as it could risk more rate hikes in a speech late last year
'If we can ride through this period with wages growth staying broadly in the current range...and the supply side problems resolve, inflation will come down and it can be painless, relatively.'
Dr Lowe said that there was a 'natural appeal' to lifting wages to match inflation but stressed that it was the wrong move as it could force the central bank to issue more rate rises.
The Reserve Bank governor will continue trying to convince the public that significant pay increases are a bad move over the coming months as the country trudges through peak inflation.
It comes as Deloitte Access Economics conveyed a dour
