Ricardian ambivalence has more evidence on the weakness of the labour market.
Greg Jericho alludes to this as well.
RBA Governor Lowe is almost pleading for wages to rise . It appears waiting for wages to eventually rise is liking waiting for Godot!
I'm sure some people who dislike neo-liberalism will say re-regulate the labour market and this does have a superficial respectability however there is one HUGE problem.
The Unions are vastly weaker now than in previous times. Wages might increase in some areas but not overall.
I cannot see this trend slowing let alone reversing.
As can be seem I have no answer to the question I have posed. We have entered the era of labour market de-regulation and could well look to the USA to see how this pans out
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