As Krueger (2018) discusses, there are other types of “implicit contract” which might dilute workers’ bargaining power. See also Manning (2003). 25 Autor et al (2017b). 26 Autor et al (2017b). 27 Autor et al (2017b). 28 Benmelech, Bergman and Kim (2018). 29 Mueller, Ouimet and Simintzi (2017). 30 Abel, Tenreyro and Thwaites (forthcoming). 24  12  All speeches are available online at www.bankofengland.co.uk/speeches  12  Implications for Monetary Policy  Let me conclude with some reflections on current and prospective pay developments. A year ago, prospects for pay were cloudy. Average weekly earnings growth – excluding the volatile bonus component – was running at a 2% annual rate, in line with its growth over the preceding three years. Average pay settlements were running at just over 2%. Signs of a pay pick-up had, to that point, proved to be false dawns. A year on, I think there is more compelling evidence of a new dawn breaking for pay growth, albeit with the light filtering through only slowly. Average weekly earnings growth (excluding bonuses) has risen to 2.9% – a clear rise and a little stronger than the MPC had expected at the time of its Inflation Report in August. Pay settlements have risen to 2.8% in a similar pattern (Chart 23). Measures of labour market tightness have increased to their highest levels since before the crisis and, in some cases, ever. Looking beneath the headline figures, evidence of an up-tick in pay is clearer still.
Today, with a mobile penetration rate of 145%, internet transactions are becoming more prevalent. Last year, Malaysians spent 23% more on online shopping platforms compared to 2015. This is consistent with what is happening around the globe. The number and value of non-cash transactions have increased steadily in recent years. 1/4  BIS central bankers' speeches  Balance between paper and digital However, despite these observations, central banks around the globe expect cash to stay necessary and never go away. There are several reasons for this but ultimately they boil down to having a good mix of both. Think about the printed book. There are some things that an e-book simply cannot offer. You can’t turn down a corner, leaf through the pages, or crack a spine. However conversely, reading off a tablet or Kindle saves you the hassle of lugging around heavy books or lengthy academic articles – especially when you do not need to read them from cover to cover. As a policy maker, I would think that there are three elements, or the ‘3S’, that we should consider in determining an optimal balance of paper and digital, cash and cashless. Security The first consideration is security. Counterfeiting is as old as money itself. However, cash has become more secure in recent years. In Malaysia, the amount of counterfeits discovered reduced by 25% in the past year. The currency industry is continuing to make good progress in enhancing security features.