Describe how strong growth in immigration might influence wages growth and employment in Australia. 3 marks

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Strong growth in immigration will increase the of labour in Australian labour markets and alleviate labour that might exist in a number of industries and occupations. This should exert downward pressure on the of labour (e.g. wages), as the power of employees falls, resulting in them being in a weakened position to negotiate higher wages from employers. This should then contribute to a decrease in wages growth over time. The lower price of labour should then lead to an increased for labour and employment as businesses are more incentivised to employ labour and perhaps delay any possible substitution away from labour and into . This increase in employment is likely to be compounded by the higher demand for labour that occurs on an aggregate level as aggregate supply increases and real GDP growth accelerates.