Australia’s official unemployment rate is currently 5.5%, which Jeff Borland from the University of Melbourne claims is higher than the non-accelerating inflation rate of unemployment (NAIRU). Borland argues that factors such as declining union membership and changes in bargaining power could potentially allow the unemployment rate to fall while avoiding a sharp rise in wages. Meanwhile, the RBA has estimated that the NAIRU fell to about 5% in 2017, compared with 6% in 2003, whereas Phil Lewis from the University of Canberra argues the growth of underemployment makes NAIRU bunk. From The AFR:
Low wage expectations and the decline of unionisation suggest the “natural” rate of unemployment may have fallen, meaning more people can be hired without risk of a wages breakout…
