A question asked by a co-woker

[серебро]

Today at work one of my co-workers asked the following question about the value of the AUD and Salaries. Does having a high valued AUD mean low salaries?
Since I have been here on SS I've seen quite a few people that know what they are on about, so not being able to answer the question with any real knowledge on the subject I thought I'd throw out and see what you can come up with. Thanks for any answers in advance.

 

[Smoothcriminal]

Today at work one of my co-workers asked the following question about the value of the AUD and Salaries. Does having a high valued AUD mean low salaries?
Since I have been here on SS I've seen quite a few people that know what they are on about, so not being able to answer the question with any real knowledge on the subject I thought I'd throw out and see what you can come up with. Thanks for any answers in advance.

The opposite if anything - high valued AUD has increased your spending power proportionately overseas and it has remained the same here at home (or cheaper i.e. TV's etc that are imported) so high AUD = higher equivalent salary.

Or do you mean to ask if it means companies will try and start paying less because $1 is now "more" if so still no, at most pay freezes.

 

[thatguy]

Good Q I have always wondered about relative price of currencies and what the benefits/downsides were of having a high AUD. AFAICS there are no big benefits to a high AUD, apart from cheaper imports

 

[серебро]

Good Q I have always wondered about relative price of currencies and what the benefits/downsides were of having a high AUD. AFAICS there are no big benefits to a high AUD, apart from cheaper imports

Thats what I thinking. But with a high AUD making imports cheaper and less face it prices for goods not dropping that much, profits should go up. But all we hear from the big retailers is the high dollar makes things tougher. I dont get it, the average worker is not making much more than they were five yrs ago. Keep in mind I'm talking about workers in retail

 

[серебро]

Today at work one of my co-workers asked the following question about the value of the AUD and Salaries. Does having a high valued AUD mean low salaries?
Since I have been here on SS I've seen quite a few people that know what they are on about, so not being able to answer the question with any real knowledge on the subject I thought I'd throw out and see what you can come up with. Thanks for any answers in advance.

The opposite if anything - high valued AUD has increased your spending power proportionately overseas and it has remained the same here at home (or cheaper i.e. TV's etc that are imported) so high AUD = higher equivalent salary.

Or do you mean to ask if it means companies will try and start paying less because $1 is now "more" if so still no, at most pay freezes.

I meant a freeze not low salaries.

 

[rbaggio]

Good Q I have always wondered about relative price of currencies and what the benefits/downsides were of having a high AUD. AFAICS there are no big benefits to a high AUD, apart from cheaper imports

Thats what I thinking. But with a high AUD making imports cheaper and less face it prices for goods not dropping that much, profits should go up. But all we hear from the big retailers is the high dollar makes things tougher. I dont get it, the average worker is not making much more than they were five yrs ago. Keep in mind I'm talking about workers in retail

Ahh... this is because many local distributors and retailers continue to gouge, not passing on the benefits of the stronger AUD. They figure "Heck, these Aussies can afford it, lets keep wounding them."

Your stronger AUD now buys more books and stuff from overseas stores Amazon.com.

I am so over Australian retail.

 

[Barbarian At The Gate]

Interesting question.

High AUD > industry being less competitive as exports become more expensive > causing certain industries to close down > jobs moving offshore.

Job losses result > employers argue shifts must be curtailed for those jobs which do remain > fewer hours worked > less take home pay. In some cases, some workers will vote to take a pay cut in order to maintain their jobs.

Though it must be said, under Hawke/Keating, the Jobs Accord saw wages in real terms rise by only 1% annually over a 10 year period during the 80s/90s. With the full consent of the trade unions, of course.

Just my opinion.

 

[Shaddam IV]

I am so over Australian retail.

Australian retailers are so over being gouged by the most expensive business conditions in the world and getting little support from the public that they employ. It will be interesting when retailers lay off hundreds of thousands of Australians in the coming two years, And the knock on effect of jobs in the transport, wholesale and manufacturing industries.

Bottom line is this: If you demand that the things that you buy are priced the same as other countries that have wages and conditions that are a fraction of those paid in Australia, but you expect to be paid Australian wages and entitlements, which are the second highest in the world, then you are living in a fantasy. You will learn this soon enough. If you don't want to pay high rent, then go live in a slum, because at the moment Australian consumers want to buy their goods for US prices, but want Australian shopkeepers to pay the astronomical costs of bringing those products to a street near you. IMHO Australian consumers are greedy and stupid, and we all know what happens to greedy stupid people eventually.

 

[Shaddam IV]

Job losses result > employers argue shifts must be curtailed for those jobs which do remain > fewer hours worked > less take home pay. In some cases, some workers will vote to take a pay cut in order to maintain their jobs.

The Fair Work legislation has no room for compromise or bargaining. Hence it is illegal for an employee and employer to come to such an agreement. Hence the only option an employer who is struggling is to pay at least award wages and cut employee hours or lay people off. As an example, Gillard has shifted Sunday rates from time-and-a-half to double time. So thousands of business owners have stopped employing staff on Sundays and instead work themselves. Ask any of these employees whether they would rather have time-and-a-half or no work at all, and you will see how stupid Gillard's Fair Work train wreck is.

 

[fishball]

Today at work one of my co-workers asked the following question about the value of the AUD and Salaries. Does having a high valued AUD mean low salaries?
Since I have been here on SS I've seen quite a few people that know what they are on about, so not being able to answer the question with any real knowledge on the subject I thought I'd throw out and see what you can come up with. Thanks for any answers in advance.

No. Assuming a strong AUD you just have higher global purchasing power.

https://en.wikipedia.org/wiki/Purchasing_power_parity

Now whether or not a high AUD ruins the economy is a different question.

 

[thatguy]

If a high AUD is so bad why not just debase like the rest of the world? Or is the trick to try get a low AUD without printing??

 

[fosinator]

I have a small retail business and its amazing how many people think if you sell them something for $100 they think you've just made $100 profit out of them.Or because they can get it 1/2 to 2/3 the price on ebay theyre getting ripped off.I certainly dont begrudge people for saving a buck because we all are trying to save bucks because the cost of living is going up.
The item i sold for $100 would've cost me approx. $60-$65.So $35-$0 easy profit right? Not quite when i take out a portion for electricity, take into account my wage,superannuation,rates bill, water bill,phone etc.etc. and all the other business costs.Thats alot of $100 items just to break even.
Im not having a whinge but I think some people who say "aussie retailers gouge everone,Theyre greedy, lower your prices etc etc" just need to be educated on how business works.
No doubt someone will flame me as in "get another job then" but as I said Im not whinging just letting people know there are costs involved in running a business, its not all profit and we're not all greedy.In saying that there are SOME greedy businesses out there.

 

[серебро]

Job losses result > employers argue shifts must be curtailed for those jobs which do remain > fewer hours worked > less take home pay. In some cases, some workers will vote to take a pay cut in order to maintain their jobs.

The Fair Work legislation has no room for compromise or bargaining. Hence it is illegal for an employee and employer to come to such an agreement. Hence the only option an employer who is struggling is to pay at least award wages and cut employee hours or lay people off. As an example, Gillard has shifted Sunday rates from time-and-a-half to double time. So thousands of business owners have stopped employing staff on Sundays and instead work themselves. Ask any of these employees whether they would rather have time-and-a-half or no work at all, and you will see how stupid Gillard's Fair Work train wreck is.

As far as sunday rates going up from time and a half to double time, there is a very easy way around that. I know a company that pays there retail employess above the award. The salaries are from 34000- 41000 a yr. They do not get any holiday loading, no weekend loading nor any overtime. Three of the 14 employess went to the union only last December and the employer is allowed to do this. Oh and by the way none of the employees have had a payrise for 4yrs. That includes cpi increases aswell. Why because they are paid above the award.
I agree many small retailers are finding it very hard.

 

[rbaggio]

I am so over Australian retail.

Australian retailers are so over being gouged by the most expensive business conditions in the world and getting little support from the public that they employ. It will be interesting when retailers lay off hundreds of thousands of Australians in the coming two years, And the knock on effect of jobs in the transport, wholesale and manufacturing industries.

Bottom line is this: If you demand that the things that you buy are priced the same as other countries that have wages and conditions that are a fraction of those paid in Australia, but you expect to be paid Australian wages and entitlements, which are the second highest in the world, then you are living in a fantasy. You will learn this soon enough. If you don't want to pay high rent, then go live in a slum, because at the moment Australian consumers want to buy their goods for US prices, but want Australian shopkeepers to pay the astronomical costs of bringing those products to a street near you. IMHO Australian consumers are greedy and stupid, and we all know what happens to greedy stupid people eventually.

When I buy goods from the US, I get 10x the service I do in many Australian stores.

This has nothing to do with wages, and everything to do with work ethic.

EDIT: Yes I realise this is a separate point to the price gouging that goes on here, but thought it was worth mentioning.

 

[Barbarian At The Gate]

Debasing the currency leads to currency wars. The US and China are prime examples of this. If you are getting paid well over Award rates, there' s room for compromise. I used to work in an industry that paid well over and we were all threatened with the basic rate if we agreed not to become less militant as a unionised workplace. It failed, but the potential was there - it even went to arbitration. And that had nothing to do with the AUD. You could also be unfortunate and work for McDonalds

 

[mmm....shiney!]

If a high AUD is so bad why not just debase like the rest of the world?

Because prices will rise and it will make not one bit off difference to our industries (maybe with the exception of farming), we can't compete, we are too well paid or don't have any brands that we can overcharge (eg BMW etc)

Or is the trick to try get a low AUD without printing??

Don't know how they'd pull that one off :lol:

 

[fosinator]

I am so over Australian retail.

Australian retailers are so over being gouged by the most expensive business conditions in the world and getting little support from the public that they employ. It will be interesting when retailers lay off hundreds of thousands of Australians in the coming two years, And the knock on effect of jobs in the transport, wholesale and manufacturing industries.

Bottom line is this: If you demand that the things that you buy are priced the same as other countries that have wages and conditions that are a fraction of those paid in Australia, but you expect to be paid Australian wages and entitlements, which are the second highest in the world, then you are living in a fantasy. You will learn this soon enough. If you don't want to pay high rent, then go live in a slum, because at the moment Australian consumers want to buy their goods for US prices, but want Australian shopkeepers to pay the astronomical costs of bringing those products to a street near you. IMHO Australian consumers are greedy and stupid, and we all know what happens to greedy stupid people eventually.

When I buy goods from the US, I get 10x the service I do in many Australian stores.

This has nothing to do with wages, and everything to do with work ethic.

EDIT: Yes I realise this is a separate point to the price gouging that goes on here, but thought it was worth mentioning.

Good point, not enough retailers have an attitude or service that's worth paying extra for.

 

[Shaddam IV]

Job losses result > employers argue shifts must be curtailed for those jobs which do remain > fewer hours worked > less take home pay. In some cases, some workers will vote to take a pay cut in order to maintain their jobs.

The Fair Work legislation has no room for compromise or bargaining. Hence it is illegal for an employee and employer to come to such an agreement. Hence the only option an employer who is struggling is to pay at least award wages and cut employee hours or lay people off. As an example, Gillard has shifted Sunday rates from time-and-a-half to double time. So thousands of business owners have stopped employing staff on Sundays and instead work themselves. Ask any of these employees whether they would rather have time-and-a-half or no work at all, and you will see how stupid Gillard's Fair Work train wreck is.

As far as sunday rates going up from time and a half to double time, there is a very easy way around that. I know a company that pays there retail employess above the award. The salaries are from 34000- 41000 a yr. They do not get any holiday loading, no weekend loading nor any overtime. Three of the 14 employess went to the union only last December and the employer is allowed to do this. Oh and by the way none of the employees have had a payrise for 4yrs. That includes cpi increases aswell. Why because they are paid above the award.
I agree many small retailers are finding it very hard.

Thanks for that, I will look into it further.

 

[Shaddam IV]

I am so over Australian retail.

Australian retailers are so over being gouged by the most expensive business conditions in the world and getting little support from the public that they employ. It will be interesting when retailers lay off hundreds of thousands of Australians in the coming two years, And the knock on effect of jobs in the transport, wholesale and manufacturing industries.

Bottom line is this: If you demand that the things that you buy are priced the same as other countries that have wages and conditions that are a fraction of those paid in Australia, but you expect to be paid Australian wages and entitlements, which are the second highest in the world, then you are living in a fantasy. You will learn this soon enough. If you don't want to pay high rent, then go live in a slum, because at the moment Australian consumers want to buy their goods for US prices, but want Australian shopkeepers to pay the astronomical costs of bringing those products to a street near you. IMHO Australian consumers are greedy and stupid, and we all know what happens to greedy stupid people eventually.

When I buy goods from the US, I get 10x the service I do in many Australian stores.

This has nothing to do with wages, and everything to do with work ethic.

EDIT: Yes I realise this is a separate point to the price gouging that goes on here, but thought it was worth mentioning.

I agree there is a systemic problem with poor service in Australia in many retail outlets. It is bad for customers, bad for business owners and it is inexcusable. The problem for Australian small business is that if you are unfortunate enough to employ someone who is rude or lazy or just plain stupid you are unfortunately stuck with them.

 

[rbaggio]

The problem for Australian small business is that if you are unfortunate enough to employ someone who is rude or lazy or just plain stupid you are unfortunately stuck with them.

That is a very good point.