Two major Australian financial institutions claim it is time for an uncomfortable economic reality check.

Key points: Economists say wage growth and better working conditions are unlikely to improve

Economists say wage growth and better working conditions are unlikely to improve Underutilisation rate (number of Australians who want more work) is too high at 14 per cent

Underutilisation rate (number of Australians who want more work) is too high at 14 per cent Nearly 20 per cent of Australians are casually employed, affecting wage growth

JP Morgan and NAB argue the economic forces holding wage growth and better working conditions back are currently too strong, and the standard of living experienced by the majority of Australians now is as good as it is going to get for many years.

"There's not a lot you can do," NAB chief economist Alan Oster laments.

"People are not going to have one job forever. They're not going to feel as secure.

"The banks are going to look at people, you know, if you've got a couple of part-time jobs, it's more difficult to get a loan.

"It's a struggle."

Workers not in position to negotiate pay rise

Putting more money in workers' pockets would likely ease some of the pain, but Mr Oster says he cannot see that happening soon.

"One of the real problems is all of the models we run, and the Reserve Bank is in the same case — in fact the globe's in the same case — say that wages should be picking up now, and they're not," he says.

He says the central problem is easy to explain.

The unemployment rate may be relatively low, but the underutilisation rate, he pointed out — which includes Australians who've given up on looking for a job, and those who want more work — at roughly 14 per cent, is too high.

Mr Oster says it demonstrates vast numbers of Australians are no position to bargain for a pay rise.

The economics team at investment bank JP Morgan back the NAB research.

Despite the creation of hundreds of thousands of new jobs over the past 12 months, JP Morgan's Tom Kennedy concedes, for most Australians, a decent pay rise is many years away.

"So for us, wage pressure is something that won't really eventuate over the next one, two, or even three years perhaps, given the fact that you need to see a lot of movement in that jobless rate," he says.

"And given the fact that all the employment growth we're getting is coming from a very strong supply-side, it seems like that story is not one for this year, and maybe not one for next year either."

He admits the work he has done reveals right now is as good as economic life's going to get for the foreseeable future.

"It seems like a story of the Australian economy moving sideways [and] the slack that exists persisting, and as a consequence, you don't see much relief on things like wages," Mr Kennedy tells RN Breakfast.

Prosperity 'slipping through our fingers'

Economist and director of the Centre for Future Work Jim Stanford says improving the working conditions is a matter of urgency.

Australia has the third-highest percentage of part-time workers in the OECD. ( Supplied: Reserve Bank of Australia )

"And I think all of the politicians are going to be following because they don't want to get on the wrong side of a mass concern among Australians that the prosperity that we came to take for granted is slipping through our fingers," he says.

The peak body representing workers in Australia has shown its hand, with the Australian Council of Trade Unions wanting to change the law to give workers more money in their pockets, and more job security.

Secretary Sally McManus came out swinging, warning policy makers that workers are not even in a position now where they can predict or plan their lives.

Unions say more than a fifth of all Australian employees — in both the private and public sectors and making up more than 2.5 million people — are currently working as casuals.

Ms McManus is pushing for industrial relations reform so jobs with basic rights and security can be restored.

"We can't be in a situation where technology evolves and we have workplace laws that are stuck in the past that aren't able to adapt to it to make sure that all working people get those basic rights," Ms McManus says.

Sorry, this audio has expired The casualisation of the workforce is here to stay, experts say

That does not sit well with industry leaders.

The Australian Industry Group's chief executive, Innes Willox, described Ms McManus's policy suggestions as like, "reheating an old dinner that no-one wanted in the first place".

But Mr Stanford supports the ACTU's proposals.

"I think the ACTU's proposal is very multi-dimensional, very comprehensive, and I think that they're heading in the right direction," he says.

He wants to see policy makers focus on working conditions in the so-called gig economy — where temporary positions are common.

"For young people, the prospect of getting a regular job where you know what you're going to make, you know you'll get a wage increase every year, you'll get superannuation — that prospect seems increasingly remote," Mr Stanford says.

"We could organise work, we could regulate the quality of jobs, even in the gig economy, that would give people some of those standard benefits that come with working."

Mr Oster can certainly relate.

Many part-time workers are women looking after children. ( Supplied: Reserve Bank of Australia )

His children are currently navigating an uncertain jobs market, but he is not confident their working conditions are going to improve.

"Whilst I might lament it, and yes, I've got two mid-20-year-olds: one's full time and the other one works two jobs, but I think structurally that's sort of where we're going to be going forward," he says.

"As an economist [not a father] I think that's basically something we've got to … put up [with]."

There is some hope

NAB's business survey showed a few firms are struggling to find labour, which should, in theory, give workers some confidence to pitch for a higher wage.

"So that should start to generate some wage pressure," Mr Oster warns.

"But, for me, I think a very moderate increase in wages is more likely.

"Maybe 2.5 per cent by the end of the year, but not much better."

Mr Kennedy simply urges workers to be smart about their job search.

"I think IT is one of the growth sectors of the economy," he suggests.

"If you look at the Reserve Bank's commentary over the past, say, two years, they have noted that sectors like IT have faced a bit of a skills shortage.

"So I think if you're looking for a role in the Australian economy, I think the IT sector, and related service sectors, probably are the way to go, going forward."