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The Forum > Article Comments > Let the people work > Comments

Let the people work : Comments

By David Leyonhjelm, published 13/12/2013

Labor's Shadow Assistant Treasurer has demonstrated that Australia's minimum wages cost jobs. Can he bring his party with him?

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I could support to a lower minimum wage if,

1. The Australian dollar was at the level of say 70-80 cents and steps were taken to keep it there. That might require that mine development should take second place to creating employment in import replacement industries.

2. That the steps between wages and salary levels were about what they were when the Hay Point compensation scheme was prevalent in major companies in Australia. That scheme set the steps at about 40% per step and it was accepted that if the RC Church could operate with about four clear supervisory steps then big business could operate with five or six. The companies decided that that system was unfair to the upper crust. There is no way the CEO's of banks make decisions that make them worth millions per year. The 15th September, 2008 events should have made that clear.

3. Only salaries at five times the minimum pay rate were allowed as taxable deductions in company accounts.
Posted by Foyle, Friday, 13 December 2013 7:55:55 AM
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Yeah and I can now see former holden workers growing wings and flying.
Posted by imajulianutter, Friday, 13 December 2013 11:45:39 AM
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David, I think there is some merit in your drift; wages are too high in Australia. But the main problem here is the middle/ upper class workers such as yourself and for that matter Holden employees, corporate and bureaucrats etc, not to mention the CEO's with their snouts in the trough for millions. Salaries have risen far to high; let all of them take a salary cut first.

I do hope you don't advocate a blanket removal of the basic wage or going the way of the US where it is pitifully low:

"The US minimum wage sits at US$7.25 an hour. Over a 40-hour week, that is just $15,080 annually. New York fast-food workers earn an average yearly salary of $11,000. About 3.6 million people, most with children, attempt to make ends meet on this wage. Most of this vast army of workers relies on public benefits to supplement their low income. (Side note: McDonald's CEO Don Thompson takes home about $25,000 per day.) The US is the most fiercely capitalist country in the world. Itís a nation in which union membership sits at just 11%."Long time unemployed people who want a leg into the job market could be allowed to be paid a sort of 'apprenticeship' for say 6 months on as little as say $13 an hour.

Is this the sort of country you'd like Australia to be? Have you ever worked for $8 an hour? The $1/ hr I earned in the 70's as a farm hand equated to a similar wage but I only did it for a year or two, was given three meals on top of it and could go to my parents on the weekends........

Perhaps long term unemployed could be given the opportunity to work for a 6 month 'apprenticeship' for say $13/ hour, but it shouldn't be allowed to become entrenched long term.
Posted by Roses1, Friday, 13 December 2013 12:51:32 PM
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Roses1

Wages are not ďtoo highĒ in general, but the minimum wage is too high to make it worth employing some people. Cutting CEO salaries will not help. Businesses donít have a lump of money to spend on wages that can be distributed to more workers if some take a smaller share. They make employment decisions at the margin Ė if I employ this person, will they generate enough money to cover the cost of their employment (wages, superannuation etc.) and make a profit? If you set the minimum wage above what a business expects to gain by employing a person, the business will not employ them.

If the main objective is to prevent poverty and ensure people have enough to live on, itís much more efficient to do this through the social security and benefits system not the wages system. This can take account of an individualís circumstances (housing costs, family dependents etc.) far more effectively without excluding them from the workforce.

Your argument for a temporary lower minimum wage for formerly unemployed people may have some merit, but itís hard to avoid rorts. A similar scheme applied in the 1990s but employers just sacked employees when the lower rate expired and took on new ones.

You are right, though, that this is a societal issue as well as an economic one. In part we have minimum wages because we feel it is socially unacceptable for people to work for an amount which is too far below what most people earn. But we need to recognise there is a trade-off between the indignity of low-paid work and the indignity of unemployment. Libertarians like David feel this is a choice best left to the individuals concerned.

Like you I have in the past worked for very low wages, though happily now thatís no longer the case. Would I have been better off if that work paid more? Yes. Would I have been better off if that work was not available because the employer was compelled to pay more than the work was worth? No.
Posted by Rhian, Friday, 13 December 2013 3:09:37 PM
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Lowering the minimum wage for people that are struggling to survive on what they get now is just welfare for the rich. I'm sure McDonalds, Coles, Woolies would love Government meet the shortfall through centerlink with healthcare cards and what not!

When I was younger and started working, the idea was if you couldn't get a job because there weren't enough, you created one yourself and then employed people. But who would do that in this country now with all the bureaucracy and crap you need to go through just to get started? Well not many people according to statistics.

Cut out all the crap taxes, rules, and bureaucrats that just get in the way and let business get the infrastructure back to a level where people can start businesses easier and create employment again!

And this free trade bullshite is pulling everyone down, everyone can see it except of course those with vested interests. Free trade my arse. There are no rules in China, you can't compete against no rules when you've got both legs tied and lead ball called Government around your neck!
Posted by RawMustard, Friday, 13 December 2013 3:15:52 PM
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why not just go the whole hog and bring back slavery?
Why not star with lowering personnel income tax and governament hand outs to middle and upper class people who don't need it?
Posted by Cobber the hound, Friday, 13 December 2013 4:56:37 PM
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