Low wages are a thinly disguised means for Government to hold down inflation.

The higher the inflation rate, the more difficult to control inflation.

Low wage earners are by that token, subsidised from the welfare budget which is collected in taxes from those individuals and industries most capable of supporting that innovation.

This is the point of conflict over minimum wages, not the furphy that increasing wages will impact negatively on employment; which it may do to a lesser degree than its counterpart inflation.

So now we have a different argument. Increasing minimum wages is not the bogey it’s made out to be here, since an increase in low wages can be easily offset with adjustments to welfare benefits.

It’s all of it, a slight of hand, when in addition to fooling low paid workers into believing the Government is onside, (meaning votes for largesse for politicians), who, as pointed out by a poster, can also be manipulated with immigration levels which force down wages.

Dan

Of course high wages contribute to unemployment. They also cause us to be seen to over value ourselves, driving down the exchange rate, making every thing we buy dearer, & our exports less valuable

The lower exchange rates make the high wage less useful, & it becomes a viscous circle, costing industries & jobs.

A simple example.
In the 70s I was contracted to localise the production of a range of mostly solid brass water & energy equipment. The stuff was imported from the US, & was expensive. I went mostly for people with CNC machines keeping labour costs down. It took 7 months to get the higher use stuff produced here successfully.

Fast forward to the early 90s & I was asked to take over the management of the company now in trouble. Production cost were far too high to compete with stuff almost as good being copied in Asia.

It was not so much the machining & manufacture of the products, but raw material costs. Local brass was 3.5 times the price of brass in Taiwan, produced from our copper & zinc exports. This was due to labour costs & excessive costly regulation here.

I could buy from Taiwan equal quality items complete chrome plated, & assembled with copper flow control valves & rubber washers delivered into my store for less than the brass rod to machine the parts from here. The cost of heavy industry in Oz is ridiculous, mainly due to high wages & the so called unfair dismissal law.

The unfair dismissal law as it now stands is disastrous, particularly for young hopefuls. No small company can afford dead heads or bludgers in todays business.

Up north in the tourist industry you could depend on your staff to get rid of the undesirable bludgers that came along. They didn't appreciate being bludged on, probably as most are working pretty hard already.

In the factory, warehouse or office situation it can be different. The less useful can hang around a long time if allowed, & it costs a small fortune to get rid of them.

Thus after a careful selection you would hire a youngster on a 3 month trial, hoping you had chosen well from an often large number of applications. At the end of 3 months many had not made it to really useful, it is a pretty stiff learning curve for a youngster. Without unfair dismissal you would probably give them another couple of months to see if they would get there, but you just can't afford to when it is so hard to get rid of them if they don't.

A lot of kids who may have made it given more time are pushed back out onto the street due to this excessive regulation. It costs a lot of time & money to run through 40 odd applications. The last thing you want to do is go back to it again. But you have no choice if the new chum is of doubtful usefulness after a 3 month trial, due totally to this law.

This damn fool law does damage to many more youngsters than it helps.

Your a dreamer hasbeen.

The success level of Asian manufacturing, is not predicated on labour as you erroneously believe. That is a small component overall. Of course in labour intense industries, they are more subject to labour costs, but it is comparatively smaller due to a larger population of unemployed poor. Naturally that large component of aspirational poor, are a great assistance to productive industry.

Fortunately, this country attends to poverty in a more humane manner, as opposed to communist dictatorships.
That’s because of unions and their focus of worker welfare through fair wages. A Christian ethic built into our culture, also emphasises consideration of the poor as an ethic of value.

It’s better to acknowledge the input to our industrial decline, as one of competitive Capitalism clambering over itself in order to exploit an impoverished country too willing to submit itself to the plunder of greed, ensuring its own greedy success.

Hopefully we can stay distanced from the Middle Ages and oppose the feudalistic
among us, by raising the minimum wage to a reasonable level for the lowest paid of the workforce that makes your coffee and cake at the local cafe.

Think of them when you install your free taxpayer subsidised solar panels.

Dan

Hasbeen

Just now read your second post. Your attitude to the workforce is not only beyond belief but so stupidly out of touch.

Let’s run through the pay rates of the workforce in my area of life.
I’m still engaged in it, and won’t consider anything under a hundred dollars an hour.
My local mechanic is cheap at a hundred and ten an hour.
I overheard a conversation at the dentist surgery a few weeks ago, and was able to calculate an average dentists ability to make in the vicinity of a million a year for an average effort.
The local lawnmower man cruises in around eighty an hour if he’s organised.

And here you bitch loud and long over the lowest paid on, what is it, $17 per hour.

Get over yourself.

Dan

while company tax is still above 35%.
Alan b,
What, before the NG claims get into gear I suppose & after that it's what, 3 % if that ?
Companies make profits so, what's wrong with paying tax ? Where are the company managers hiding their profits ?
A Flat Tax, nothing less, will make the playing field more level !