Continuing low wage growth is hurting an increasing number of workers and could ultimately drive major wedges through Australian society, research for the Reserve Bank of Australia (RBA) has warned amid suggestions growing market power of large firms is squeezing pay packets.

A string of papers released by the RBA on Friday, compiled for a conference that was held behind closed doors in April, show the bank struggling to find definitive reasons for the slowdown in wages growth that is affecting workers here and overseas.

Slow wages growth could lead to social problems, research for the RBA has suggested as the bank searches for reasons why Australians' pay packets are not swelling. Credit:Louie Douvis

The RBA has sliced official interest rates twice in the past two months and is expected to take them to a fresh record low of 0.75 per cent by November as part of an effort to drive down the jobless rate and lift wages growth.

Wages growth nationally, which averaged closer to 4 per cent prior to 2008, has now been at or below 2.5 per cent for almost five years.