The golden age of the salaried middle class employee is over and it ain't coming back. * Billions of people. * Increasingly sophisticated automation. * Globalisation. * Artificial barriers to innovation and competition. * Massive household borrowing for unsustainable spending * Income from capital especially from housing increasing more than the income from labour. An article on some of the above:
People love to blame employers. Always blame someone else. In Australia businesses face increased costs, overseas competition, falling sales, increasing rents, increased regulation yet they are expected to increase wages all the time, increase penalty rates, pay more super and on and on or else that are called"greedy". People demand "I am entitled to a job". Well, go work for the public service. Otherwise stop complaining about being an "oppressed wage slave", give up your 4 weeks paid leave, your 9.25% super, your sick leave/carers leave, your penalty rates, your long service leave, your paid public holidays, your weekends off and your other "entitlements" and empty your savings account/mortgage your house/borrow money and start your own business. Work 70 hours a week, submit endless paperwork, put everything you have at risk and stand on your own two feet. Then you too can find out what it's like on the other side. If wages are going down then stop complaining and stop being a wage earner. If robots are taking over your job then stop being a robot and work for your self. If you think that to go out on your own and risk everything and work like you have never worked before is "too hard" or "too risky" then that's your choice. But don't blame those who did the hard yards and who took the risks for your facing the results of your own choices.
Hence the first line in the article: "ACCORDING to the rich world's politicians, economics has a new villain." And many more people would if artificial barriers to entry and regulatory constraints on free market competition were removed. Look at the trouble Uber is having in Australia. And the growing power of patent trolls to leach off of small business and destroy innovative startups (who, to their credit, keep trying anyway). And inflexible zoning restrictions, and any other of the myriad of bullshit that new businesses have to fight.
Think about how massive private debt levels in Australia provide an enormous disincentive to risk taking. Plenty more people would quit their jobs and take a risk on starting a business if they weren't encumbered by debt and fear.
Yes, we all got a bit too comfortable with all that personal debt and leverage and now it's a shackle. People demand ever increasing wages and for many it's because they need to make the repayments on all their toys that they bought on credit.
It needs to be made easier to employ people in Australia. The main impediment to this apart from the high cost of employment here is the protectionism - It's too hard to dismiss bad employees so businesses are wary of employing anyone in the first place.
I recently heard a webcast that pointed out the average wage in Oz is $70K, whereas the average new job being created in the US is $30K. It's 'That level of correction we're facing. I think for Australia it may be a case of Stagnation as everything here comparatively is so expensive, I think the price inflation will be locked in. P.S. I remember the ride up in wages as being painful too.
It's funny, but folks want to know everything will be 100% perfect before taking the jump. Whether it's a political system (eg leaving communism for libertarian) or leaving a crappy job to work for yourself, they'll demand perfect alternatives from you to a myriad of questions, even though their existing situation is so bad they started the conversation themselves. Yet all the existing situation needs to provide is one potential bad example and they'll stay with it. Eg. even though communism had been failing the Russians for 70 years, they were still afraid of any new political systems that MAY have been better. There's probably no better example of this than the Public Service which I left a few years back. I still have friends in there and conditions are appalling. They're bullied by PC thugs, incompetent managers and don't have any job security (and therefore don't/can't take any leave or benefits). They're suffering from tangible acute stress diseases like shingles, skin rashes, nerve cramps, hairloss (in women too!!) etc (it's terrible to see & hear). I say, "why don't you get out? the place is killing you!" And they say, "but what will I do?".. but when I give them a couple of alternatives, they come up with more "what-if's". I tell them "I dunnoh what might happen but I'm sure I know how your current situation will pan out". I say "look at me and all the others that did it... we're all pretty happy now"!. But they just see their own situation as different. It's sad, but programming is more powerful than logic.
Not all new business require huge capital outlay to begin with. Once had a number of lawn and garden care businesses. It was originally just one ig outfit that i plugged along with attaining clients until i eventually separated the clients out into areas and sold them off as 3 different Mr greens The original outlay was less than 3k and that had cheap arse ute , mower and blower and chainsaw. It was a lot of hard work but the $$$$$ outlay was minimal AND IT WAS MINIMAL BECAUSE I COMPENSATED THE LACK OF $$$$ WITH BLOOD SWEAT AND TEARS(on my hands). It didn't make me a millionaire but i think people would be blown away by the money generated by humble lawn care. Another of my early businesses was cleaning up shit and piss and vomit at pubs. I had grand plans of running lots of employees and sitting back doing the day jobs. It was a start time of 4am-5am in the morning and you needed a strong stomach. BUT GUESS WHAT? 50% of the people i employed would call in sick at at 11pm the night before or just not show up and i wound up doing a large amount of the early morning starts myself. I paid good wages at the time and going back 15 years i was paying $18 an hour. I guess the guts of what i am trying to say is the money is out there to be made IF YOU ARE PREPARED TO WORK HARD. The sad fact of the matter is PEOPLE ARE NOT PREPARED to work hard . They want everything NOW with zero thought of what they could achieve over the next say 5 years of hard slog.
I think it's why people stay with abusive partners - They prefer to stay because they know where they stand and it's familiar which is less scary than venturing into the unknown. I think it's called the "It may be hell but at least it's home" syndrome.
Sure, there are plenty of people too risk-averse to quit their jobs, but there are also many who would if the barriers to creative business ideas weren't so high. In fact many people do have a small side job/business or try to start something while still employed. But there would be many many more if there weren't so many regulatory restrictions in place. Let me give you an example: Say I lived near a University in an increasingly gentrifying suburb and noticed that the child care centre I walk past every day has many individual parents dropping off and picking up kids. So I think one day when I see two side-by-side terrace houses up for sale, "I could buy these and turn them into a profitable love-hotel where these "single" (hehehe) parents could have a quick dalliance before or after dropping off their kids, and during the day I can offer discounts to horny University students." Now, its not too hard to imagine, and verify, that the council and local nimbys would ensure my business plan never got off the ground.
Yes, I think that the missing part of the puzzle for people is that they don't see a low paying position (or an unpleasant working situation such as cleaning) as a stepping stone on the way up. As someone once said: "Entrepreneurs are prepared to live for years under circumstances that others won't so that after that they can live like others can't"
The problem that I see with Australia (particularly with one of the major parties owned and operated by unions) is that workplace legislation is drafted with companies the size of BHP, Coles Myer and GM Australia in mid and then that legislation is blanket applied to every workplace in the country down to the smallest milk bars, guest houses and tiny boutique manufacturers. Small business needs it's own separate set of IR rules IMHO.
Well above award. I want to keep my good staff. You misunderstand me. If it is clear that wages are not going to keep growing and unemployment is increasing then that is how things are so do something about it. Complaining will not save you, saying that "Things should be different" will not save you, blaming employers who's own incomes are falling is pointless. Do something to help yourself and start your own business. If you will not then don't blame someone else if you think that you aren't earning enough to support your lifestyle.
Few can become millionaires all by themselves, and not everyone can start their own business. Humans are by design, problem solvers. We will find ever efficient ways of doing things. Efficiency leads to job loss. In order to create jobs, or stimulate the economy we must force inefficiency into the system. Personally I think doubling pay and reducing hours of the work week by half should work great! Sure it will be tough at first but that's how it was when the 40 hour work week laws were enacted.
Houses rather than toys IMHO. Toys actually do things and producing them creates jobs and useful economic activity. A house that increases in "value" by $200,000 in a year doesn't do anything more than it did before and creates a bigger debt which needs to be repaid out of future earnings (which obviously cuts into future spending). When the economic settings support an upwards trajectory, buyers feel richer and pay more and workers demand higher wages to pay larger mortgages. Businesses increase their prices to cover the difference, until the point where they can't because people figure out that they can buy what the business is selling direct from the manufacturer in China for 60% less. If businesses can't afford to pay their staff a living wage, something, somewhere has gone very, very wrong and it's not necessarily the personal fault of the employee that they're poor value for the business at $xx/hour. Had this conversation with an acquaintance last week. He's got a great, hardworking staff member and says his wages bill it too high in relation to turnover. I think he's actually doing pretty well and given what the staffer actually does, he'd be hard pressed to find someone better who could increase revenue by much more than he's getting now. His rent is 15% of turnover so as far as I can see, he's got a rent problem rather than a wages problem.
This worries me that you believe this. When the day comes that i have $1,000,000 sitting in my account and it is not because we have just sold a house or other asset. Just sitting there because we have it sitting there and all our other assets are intact. I WILL BE TAKING SOLE RESPONSIBILITY FOR THIS. No bastard will have helped or gifted it to me , I WILL HAVE MADE IT ALL MYSELF. To say that "]Few can become millionaires all by themselves, and not everyone can start their own business." is surely the biggest COP OUT i have read today. And if i take out all the alternative websites i read for entertainment , it would be one of the biggest COP OUTS i have read all year. ANY average person has has the ability to do either of these things. Shit i personally know very well off person with mental disabilities such as Aspergers. Short of severe physical or mental illness we all have the ability to succeed beyond any of our dreams. I don't mean to sound to harsh or critical, i truly believe what you have written to be a cop out and placing your future in the hands of others is wrong.
