It's almost funny how willing Angus is to demonstrate how out of touch with reality he is by writing something like this.
Not only has he failed to address any of the points that Stiglits's raised. He built a strawman and set fire to himself.

Angus if wages growth in Australian has been a market force only then why work choices? Why the outcry from when the minimum wage is raised.

The reality is very few industries have the worker in a position to set their wages. Most people are price takers, with the company only paying want it needs to get workers. There are more and more Wal-Mart type situations happening in Australia, their called the working poor.

But it doesn't matter as long as the lawyers can find work in parliament then everything is fine. But perhaps, just perhaps Angus should have a chat with the person who cleans his office in parliament and see what he or she thinks.

When the revolution comes it will not be the cleaners that are put against the wall.

There are certainly things to be said for reducing inequality; that's why we have progressive taxes, after all. But until Stiglitz or someone else is prepared to come up with a figure for the optimum distribution of wealth -- and explain why it IS the optimum -- all we have to deal with is opinions. Nobody knows what the best Gini coefficient for Australia should be, and so any attempts to achieve it are going to involve groping in the dark.

But does anyone imagine that if we could identify it as, say, 0.3, and than actually achieve it, that those at the bottom of the heap and their self-appointed representatives would give up trying to make it lower still?

I don't see that these comments are any less valid for the US than Australia.

Middle-class political activists have battened on inequality as a slogan of the day. The societies they whine about are some of the best in the world from many, many measures. The inequality is dealt with under the social contract by strongly progressive taxation combined with a whole range of means-tested entitlements, so that perhaps 80% of the population pay no net tax when benefit flows are taken into account.

The complaints about inequality are as confected as the faux 'conservative war on women' and the faked-up accusations of 'racism' and 'sexism'against every non-progressive who dares to enter the public sphere. Its just concern trolling, intellectual bullying and ostentatious display of 'superior' morals.

It's garbage.

It does not really matter what Stiglitz and most economists say they
all ignore the effect of high and rising oil prices in eating up GDP.
The market will fix it they say !

The vast majority of them still think the GFC was caused by the
housing crash in the US.

Housing was the first and major symptom.

I think ChrisPer is confusing cause with effect:
"The inequality is dealt with under the social contract by strongly progressive taxation combined with a whole range of means-tested entitlements, so that perhaps 80% of the population pay no net tax when benefit flows are taken into account."
The fact that 20% of Aussies pay tax for all of us must surely be strong indication of the level of inequality?
Reducing that inequality could increase the number of taxpayers.

Forgot to mention, Australia is spending around $40 billion a year plus
refinery charges for petrol and diesel.

Almost an NBN every year.

The author could be right about the past, but the future for Australia is likely to be different.

In the past, Australia sold its natural resources to get revenue, but the easy to get at natural resources have now been got.

Productivity in mining has been declining for some decades, as it is becoming more expensive to operate a mine.

“output generated by each hour worked is now 56 per cent lower than in 2002.”

http://www.abc.net.au/news/2013-04-15/mining-productivity-slumps-over-past-decade/4628866

This has little to do with wages, and more to do with the depth of the current coal and iron ore deposits, and the quality of those deposits.

Farming is also becoming less productive, as increasing oil prices drives up the cost of diesel and fertilizer, which reduces farm profitability.

About 300 farmers a month are leaving the land while there are about 100,000 less farmers now than in 1981.

http://www.nff.org.au/blueprint.html

So many companies are now foreign owned, and company profits leave the country and are not being recycled through our economy.

The velocity of money goes down, as so much money leaves the country.

The list can go on, but in general, Australia has depended on selling its natural resources in the past, but as these natural resources are used up, Australia is becoming less viable.

This is made much worse by increasing the population through immigration, which requires more resources are used up at a greater rate.

..."Cobber the hound" alludes to a future revolution in Australia. Interestingly, a spectacle plays-out before our eyes in Iraq right now; the most hated opponents of jihadist militant group ISIS, are the State operatives such as the Iraqi army: They were killed “execution style” in numbers.

...Our job as citizens of Australia is to identify the enemy! I think a good starting point, is with elitist elements of the governing body!

Higher wages are driven by productivity.

If 10 Australians with better education and technology can manufacture as much as 1000 chinese, then they can command 100x the salary and still be competitive. As productivity in Aus is shrinking and wages are still increasing in real terms, jobs will simply fade away to other countries.

The requirements for equality is global. The gap that needs to be closed is between the poorest in the world vs the richest. This is not likely to be palatable to anyone.

Shadow Minister,
Your suggestion relies on the Chinese not using the most modern
equipment in their factories.
The problem is they use cheap labour AND the most modern equipment.

If the labour market were as strong as Angus Taylor says, then you would expect low rates of unemployment and underemployment. The official unemployment figures are artificially low because the criteria that are used for determining unemployment are far too restrictive. For example, if you have given up looking for work after hundreds of knock-backs, you don't count as unemployed. Nor do you count as unemployed if you have worked for one hour a week, even unpaid in a family business.

To see what is really happening, take a look at the real unemployment rate from Roy Morgan Research.

http://www.roymorgan.com/morganpoll/unemployment/underemployment-estimates

Their June 2014 figures show 10.6% unemployment on top of 9.5% underemployment (i.e. working part-time but wanting more hours), so that 20.1% of the working age population is either unemployed or underemployed. At the same time, we have been acquiring 5 new people for every new full-time job.

http://www.theage.com.au/national/skilled-newcomers-flood-fulltime-jobs-market-20130614-2o9vm.html#ixzz2YLJos5JE

The labour market situation here isn't as bad as in the US - yet, but it is certainly heading in the same direction, and yes, there are a lot of worries concerning exhaustion of resources and threats from the global environmental situation.

Bazz,

Having been to China, they are certainly using high tech equipment where they have to, but skimp on labour saving devices where the cost of labour does not warrant it, and use far more people to produce the same output. As labour costs are rising, this is changing.

Shadow Minister,

Letting "jobs fade away to other countries" is a matter of deliberate government policy. Our government could impose tariffs to compensate for lower labour costs, lower safety and environmental standards, etc., so that it takes away the profits from labour arbitrage. There is no reason why our standards should be equalized with the most overpopulated, most mismanaged countries on Earth. The only dysfunctional culture that you have any hope of changing is your own. It is worth mentioning that the American people shut down the first era of gobalisation after World War One. As Prof. Peter Turchin writes:

http://aeon.co/magazine/living-together/peter-turchin-wealth-poverty/

"Put simply, it is fear of revolution that restores equality. And my analysis of US history in a forthcoming book suggests that this is precisely what happened in the US around 1920.

"Reforms that ensured an equitable distribution of the fruits of economic growth turned out to be a highly effective counter to the lure of Bolshevism.

"These were the years of extreme insecurity. There were race riots (the ‘Red Summer of 1919’), worker insurrections, and an Italian anarchist terrorist campaign aimed directly at the elites. The worst incident in US labour history was the West Virginia Mine War of 1920—21, culminating in the Battle of Blair Mountain. Although it started as a workers’ dispute, the Mine War eventually turned into the largest armed insurrection that the US has ever seen, the Civil War excepted. Between 10,000 and 15,000 miners armed with rifles battled against thousands of strikebreakers and sheriff deputies. The federal government eventually called in the Air Force, the only time it has ever done so against its own people. Add to all this the rise of the Soviet Union and the wave of socialist revolutions that swept Europe after the First World War, triggering the Red Scare of 1921, and you get a sense of the atmosphere. Quantitative data indicate that this period was the most violent in US history, second only to the Civil War. It was much, much worse than the 1960s.

(cont'd)

(cont'd)

"The US, in short, was in a revolutionary situation, and many among the political and business elites realised it. They began to push through a remarkable series of reforms. In 1921 and 1924, Congress passed legislation that effectively shut down immigration into the US. Although much of the motivation behind these laws was to exclude ‘dangerous aliens’ such as Italian anarchists and Eastern European socialists, the broader effect was to reduce the labour surplus. Worker wages grew rapidly. At around the same time, federal income tax came in and the rate at which top incomes were taxed began to increase. Somewhat later, provoked by the Great Depression, other laws legalised collective bargaining through unions, introduced a minimum wage, and established Social Security.

"The US elites entered into an unwritten compact with the working classes. This implicit contract included the promise that the fruits of economic growth would be distributed more equitably among both workers and owners. In return, the fundamentals of the political-economic system would not be challenged (no revolution)."

#Letting jobs fade away to other countries" is a matter of deliberate government policy.# (Divergence)

...Yes, and it is also cowardly. Australians have a not so illustrious history of protecting jobs and conditions threatened by Chinese. What better way to neuter worker opposition to foreign take-over, than to migrate industry off-shore. Much safer it is to allow the working class to serve Chinese masters in the services industry at home.

...The fears our forefathers expressed at the time of Federation, and which prompted the white Australia policy, may yet eventuate: That of a Chinese “Fifth Column” here in Australia. They had foresight, uncommon among the current elites in Canberra.

Divergence,

Raising tariffs is proven way to destroy jobs. Saving jobs is by reducing input costs by making labour more efficient and flexible, reducing energy costs and reducing unnecessary regulation compliance costs.

Labor increased the costs of all of the above, and oversaw the collapse of the motor industry, the steel industry and the aluminium smelting industry.

The simple and obvious key to maximise profits is to have the largest possible number of wealthy consumers and at the same time, the poorest possible producers. This is clearly difficult within a single country, where the producers are also the consumers.
Globalisation however, creates a very simple -short term- solution.
Short term because a country that produces nothing won't stay wealthy for long. Witness the meteoric rise of those historically cheap and nasty imported goods sources; 'Made in Japan' /Hong Kong /Singapore /Taiwan...
We've only managed to dodge this bullet by 'selling off the farm' -and all the resources under it.
Thanks to the short term planning of short sighted governments, we have become a heavily dependent nation.
And Dependence is Slavery.

Shadow Minister,

You then need to explain why we have such high unemployment and underemployment now (10.6% and 9.5%, respectively, for June 2014, according to Roy Morgan Research). You also need to explain why wages went up, not down, in the US after the end of the first era of globalisation. These graphs from State of Working America show the unemployment rate, and productivity and average wages in the US from 1948 to the present.

http://www.stateofworkingamerica.org/chart/swa-jobs-figure-5g-unemployment-rate-1948/

http://www.stateofworkingamerica.org/chart/swa-wages-figure-4u-change-total-economy/

The beginning of the present era of globalisation from the point of view of US workers can probably be dated to the Immigration Act of 1965, which greatly expanded immigration, and the Tokyo Round of the General Agreement on Tariffs and Trade, which started in 1973. You can see that wages of nonsupervisory workers stagnated as globalisation got going, no longer keeping up with growth in productivity, while unemployment has remained just as bad and sometimes worse. On the other hand, globalisation has been great for the top 1% of the population.

http://lanekenworthy.net/2010/07/20/the-best-inequality-graph-updated/

You are correct, however, that industries can get too cosseted. There needs to be good oversight as to whether differences in costs are due to labour arbitrage or not keeping up with the latest technology. In the latter case, more competition may be indicated. The problem is always regulatory capture.

I agree with Grim about the long-term dangers of dependence.

Inequality may not cripple us, but it certainly hurts, and it is fundamentally unfair.
For thousands of years humans have been developing labour-saving devices, and we have reached that state where there is just not enough work available to keep everyone usefully employed. 100 years ago most of us were employed on the land, but now about 5% of us grow enough to feed the world. Thousand of young women lost work when we developed automatic telephone exchanges, and many thousands more joined the work force after the war. John Maynard Keynes suggested that England could escape the Great Depression by employing thousands of people to dig holes, and thousands more to fill them in, but it took a war to finally end the depression.
This problem can only get worse, as smarter and ever smarter machinery takes over more and more work, but it's only a problem if the gains are shared unequally among us. The problem is falsely seen as a lack of work, when the real problem is a lack of money. If everyone, (you, me, and James Packer), were to receive a generous 'dole', of say $300, automatically deposited in one's account every Monday, and all income was taxed at a flat rate of 30%, say, we could do away with Centerlink, 90% of the ATO, tax consultants, a lot of prisons, and even some of the police force.
Abbot's intention to force young people off the dole, when the work just is not available, may force many young people into crime, and will cost us about $120,000 each to keep them in jail.

What is actually happening in Australia and world-wide, whether by design or default, is best described as a form of New Feudalism.
Those at the top have quite simply forgotten or failed to learn from the lessons of history...again. They blithely assume that it can't happen to them, it's a modern world, we have modern technology, etc etc etc.
There is NO possible way to reverse this now, indeed, it would seem to be ingrained in our very genes, and consequently we are doomed to "live in interesting times", if anyone survives to take any interest that is.

Well G'day Bruce, things are happening in the US, the banks that were
the fundamental financial cause of the GFC crash are being sued by
other financial bodies for $500 billion and it could send them to the
wall, but it looks like the Bail In may apply if they lose.

Don't have any money with any branch of those banks.