SYDNEY, Nov. 21 (Xinhua) -- Australia's Reserve Bank (RBA) Governor Philip Lowe has warned that wage stagnation is hurting workers and threatens social cohesion.
Addressing attendees at the Committee for Economic Development of Australia (CEDA) annual dinner on Tuesday, Lowe said that record-low wage growth is making some Australians feel like they are not benefiting from the economic prosperity of the nation.
"Flat real wages are diminishing our sense of shared prosperity," Lowe said.
"The lack of real wage growth is one of the reasons why some in our community question whether they are benefiting from our economic success."
In the past six years, wage growth in Australia has been largely negated by inflation, contrasted with the period between 1995 and 2012 which saw steady improvement in actual wages.
Lowe described the diminished faith that living standards will continue to improve as a "major social and political issue," saying that it makes it harder to implement necessary economic reform.
With Australia's banks in the midst of an inquiry that has so far uncovered numerous wrongdoings, Lowe also said that it is crucial to restore faith in the nation's financial institutions.
"It is clear that the behaviours highlighted by the royal commission have dented the community's trust in parts of our financial sector," Lowe said.
The RBA governor said that banks must do what the can to regain the public's trust, which is crucial to the functioning of the financial system and economic prosperity of the country.
"Our economy, and our society, works best when there are high levels of trust," Lowe said.
"And those in whom trust has been placed need to do their best to be worthy of that trust."
