So why is pay growth so stubbornly slow? When might it pick up? And if wages aren't even keeping up with living expenses, why do businesses keep grumbling about labour costs? To an economist, there's a common thread that helps to explain the apparent contradiction where "real" wages are falling and yet many businesses still face labour cost pressures: the mining boom. Even though most of our jobs have nothing to do with mining, and the big-spending part of the boom is over, its impacts are still rippling through the labour market. And unfortunately for those expecting big pay rises, it's a dynamic that has much further to run. Research from Bank of America Merrill Lynch economist Saul Eslake earlier this month explained the situation well. It predicted pay growth would probably remain soft for the next two years as Australia joined the "slow wage growth" club of countries including the United States, United Kingdom and those in Europe, where pay rises have been miserly for years.

What had sheltered Australian workers from this wages pain? The fact we avoided a full-blown banking crisis was clearly one factor – but another big one was the surge in resources investment from 2 per cent to a staggering 8 per cent of the economy. We all heard the stories about tradies heading West to make the kind of salaries normally reserved for senior executives. But Eslake points out that employees in plenty of non-mining industries benefited too, because the tight labour market forced bosses to pay higher wages to keep their staff. Now, however, the labour-intensive part of the resources boom is over, so this extra source of wage pressure has faded. More and more of the projects are in "production" – which means they're delivering profits to their largely foreign shareholders, but employing far fewer people. With other industries struggling to fill the almighty gap left by mining investment, and unemployment edging up over the past two years, there's little pressure for wages to rise.

The upshot is that Australian workers are experiencing what's been the "norm" for countries overseas for the past few years. The Bureau of Statistics says average earnings rose by just 2.3 per cent in the year to May, the slowest growth since the 1990s recession, aside from a one-off weak patch in 1999. It could be a while before this changes. The Reserve Bank is predicting a return to "trend" economic growth in late 2015, but a recovery in wage growth will take significantly longer, because so many workers are on longer-term employment contracts that take time to adjust to conditions. So all up, it's a pretty bleak picture for people expecting big pay rises over the next couple of years. But now things get tricky. If wage growth is so soft, why are employers still complaining at the high cost of Australian workers? It's partly naked self-interest: the less spent on wages, the more left for profits.

But it's also true that trade-exposed businesses do face significantly higher labour costs than they have in the past. And a key reason for these cost pressures is – you guessed it – the mining boom. The higher costs facing trade-exposed businesses are reflected in the real exchange rate. This is the commonly-quoted nominal rate, adjusted for inflation, and compared with our trading partners. A June speech from RBA assistant governor Dr Christopher Kent pointed out that Australia's real exchange rate remained much higher than its long-term average. This is mainly because of the surge in the nominal exchange rate - another legacy of the mining boom - but also because of bigger increases in wages over the last decade compared with our trading partners. And as we've heard, those pay rises were driven at least partly by surging resources investment. So businesses that are heavily exposed to international competition do have a point when they say they face relatively high labour costs. What you won't hear from these businesses, however, is that recently these trends have gone into reverse.

The Reserve's latest Statement of Monetary Policy pointed out that domestic labour costs had indeed fallen "slightly" compared with costs in many of our trading partners. There had also been "modest" improvements in international competitiveness. It would certainly make life a lot easier for bosses and workers in the trade-exposed sector if the Aussie dollar would simply fall further than it has. That's why the Reserve is constantly trying to talk down the currency. But failing that, slower wage growth and gradual improvements in productivity will also help to bring down the real exchange rate. In the long run, this can make these businesses more internationally competitive, even if the dollar stays high. All of which is good news for trade-exposed industries that we'll need to help fill the void left by the fading mining boom. For wages, though, all signs point to soft growth persisting for a while yet.

Ross Gittins is on leave. Follow us on Twitter @BusinessDay