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While inflation in the first world countries has forced the wages of our workers up, which has made us uncompetitive. The solution isn't to arbitariy force the same inflation on third world countries. Even though I'd like to see you try. Those now earning $4 a day are a damn sight better off now than when they were subsistence farming 10 years ago because the cost of living there is still so much cheaper. That is even IF and that's a big if, it's a good idea for us to be manufacturing on a large scale in the first place. The solution is to stop the inflation here first and foremost. The Chinese worker can only sustain such low relative incomes because of manipulation of their currency relative to us. They are importing a large chunk of the inflation that is being created here, Europe and the USA. Essentially they are giving us part of their labour for free! It can't go on forever though and the inflation will force their wages higher and closer to parity with ours. At some point the currency manipulation will have to stop and the inflation will come flooding back to the west. The sooner we get on a sound money footing the easier that pain will be to bear.
If it's possible to mandate wages then let's just make the whole world have $100,000 then no person will be living in poverty But "inflation" doesn't make our wages too high. Producing tradeable output at an uncompetitive price means our wages are too high. As long as our products are demanded then the cost of labour in producing those products is about right. As soon as our products are not demanded then we are either producing the wrong things or our costs (including the cost of labour, taxes, regulations, restrictions etc) are too high and we need to change these costs or produce something different. This goes equally for determining whether the wages in developing countries are too low. Most developing countries have high costs of corruption, transportation, capital risk, supply chain disruption risks, war, etc that makes them uncompetitive which drives their labour price down.
minimum wages eh? I agree, we should have all OZ unionists on the same rate as the Congo, Zimbabwe, and Ethiopia. OC
bordsilver why don't we make it $300,000 ? I could do a lot more with $300k, and after all wouldn't the poor be better off with $300k than $100k ? You must hate poor people
Minimum wage creates unemployment. The only way to raise the wage of some, is to take away from others. And that basically means that people with low skills will not have jobs. Well done socialists. I know you mean well, but you just don't understand economics.
There was another option that's now long gone. Retain a small population and retrain Australia's productive assets. Provides a national income that's shared via tax (wealth distribution). What we'll have now is a massive reset and our wages will fall in line with our global competitors (fraction of present because let's face it, we don't do much other than sell houses....to each other). We'll earn what the global corporates determine is "reasonable". We've been completely scammed by all politicians in all parties over the past thirty years. Here's why we're doing what we're doing. http://www.smh.com.au/business/corporates-cant-lose-in-the-welfare-state-20130920-2u56q.html
Australia has sold 85% of pretty much everything to sustain our extraordinarily luxurious lives. When there's nothing left to sell and when we can no longer amass more than the already highest personal debt in the world, we are going to be whacked with some extreme lessons in how not to let our politicians shaft us. All too late of course. We are idiots. It's coming very soon. Maybe a decade?
"Your idea is to turn Australia into a sweat shop and tax until everyone is paid the same?. " Certainly not my idea and absolutely where I want it to go......It's where it's going no doubt. There is not a choice. Choices are long gone. It's what WE have created.
"and absolutely NOT, not, NOT......where I want it to go" Sorry about that. Not a Freudian slip either. I've got kids just starting in the work force where we all enjoyed good wages. That's going to change as will every other aspect of their lives.
Sorry. I can't even tell what you are trying to say. You want what the aborigines had? Small population, socialised productive assets shared largely equally to membership status rather than individual effort. Where did you get an 85% foreign ownership number from? Why do you think our wages are way, way too high that they will be forced to a "fraction of present" levels? High relative to what?
That's nothing like what I'm saying. We have prospered because we've sold assets and are in the highest personal debt in the world. That's now over, there's not much left. So, what is left, yes will need to be shared. In a democracy, where food and wealth are scarce, there will either be sharing or riots. Take your pick. I didn't design it, I'm just predicting it. If you can see another possible outcome, I'd love to hear it with your logic backing what you say..
Umm. We do share and allocate scarce things. It's called the economy (democracy largely has nothing to do with it). High personal indebtedness doesn't tell you anything per se, it just tells you a lot of people have made promises to pay in the future to obtain something now. It could be as benign as the baby boomer generation passing on assets to the younger generations, as productive as buying into new welfare enhancing economic enterprises or as destructive as bringing forward unnecessary consumption. There's good, bad and indifferent debt. Also, still baffled by your 85% foreign ownership assertion. And why our wages are way, way too high.
Yes please tell us about this 85% ownership thing, I am very interested in seeing some evidence for this. High personal debt is also probably higher than it would otherwise be due to artificially low interest rates and home buyer subsidies, blame the govt for that. You also haven't answered my question "what are Australia's productive assets ?"
"blame the govt for that." Yes I do. They are the managers of the economy and have overseen the complete destruction of Australia's future. It is well known 85% of mining is foreign owned. It is also well known the top ASX companies are also. ""what are Australia's productive assets ?"..........I don't remember seeing that Q. Anyway, Producing assets are exactly what the word implies. They produce. They are all sold or redundant because we source from overseas. Farms, manufacturers, fisheries. So what's left that we do? We consume and service each other. Fix teeth, mow lawns, sell TV's, wire houses, build houses. To fund this completely and utterly unsustainable model, we sell Australian assets (whether privately or government owned that money ends up in the economy). We also populate with rich migrants. So, if anyone can tell me how this can end well, I'd love to know what their logic is. All I ever get is attempts to discredit what I say with semantics like, "oh that was in a drought"....or......someone trying to discredit Katter http://www.politifact.com.au/truth-...ralia-will-be-net-imp/...................Have they considered yields halving in the next 35 years? Have they considered our population doubling over thirty years?........AND............What about the question......What does it matter if we become net importers of food? TOO FUNNY.......We are so entitled we forget other countries are not there to serve us, we need to trade. If there's nothing left to trade.....WE STARVE....Get it? As for our wages. They will worse than halve as the rest of the world sources resources elsewhere. None of it is rare (EXCEPT FOOD). We are in for one hell of a shock in the near future.
