Economy Hub: The economy is great, but will wages rise?

There is a wage puzzle that is challenging economists all over the world. Picture / Kenny Rodger

The world's economy is in growth mode this year but unless we see start to see some stronger wage growth it will not feel like a boom to most people, says ANZ group's Sydney based chief economist Richard Yetsenga.

Yetsenga in Auckland for the Apec Business Advisory Group meeting.

On The Economy Hub video show this week he says people also need to consider that this may be "about as good as it gets."

"I think it's about as good as it gets. For the global economy, we're growing at 3.8 or four per cent and I think we'll struggle to get much stronger that."

Wage growth remains one of the missing pieces of the economic puzzle right now, Yetsenga says.

"Wages are not doing what you'd expect with growth at these rates so people certainly aren't feeling anything like a boom."

There was a "wage puzzle" that was challenging economists all over the world, he said.

"There's something global going on with wages and I do think technology is playing a big role. I'm hopeful we'll see a bit more wage growth generally this year. But it won't be the sort of growth we'd have expected 10 or 15 years ago."

It was hard to see an end in sight to the kind of downward pressure technology was applying to wages and inflation in general, Yetsenga said.

"And it's difficult to find parts of the economy that are not being affected."

Yetsenga said his message to the Apec Business Advisory group was around the role business had to play in ensuring economic growth was a shared story.

"Business is very much part of the global conversation now. Simply keeping shareholders happy doesn't cut. Business does have a social contract and they need to deliver into that. Right now the global economy is making it a little bit easier to do that."