Workers may need to get used to their pay packets increasing by no more than 3 per cent annually, with new research from NAB finding productivity growth is likely to stagnate at its lowest level in more than 70 years.

The Reserve Bank of Australia would be forced to raise the cash rate if the jobs market failed to adjust to the norm of lower salary growth, though NAB believes Australia’s current 4.2 per cent rate of wages growth is consistent in the short term with a further decline in inflation, provided it came at the expense of lower corporate profits.