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The Forum > Article Comments > Wage pressure danger lurks on both roads > Comments

Wage pressure danger lurks on both roads : Comments

By Mark Wooden, published 19/11/2007

The differences between the two parties on workplace relations seem a lot less than either is prepared to admit.

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This sort of commentary, steeped as it is in the jargon of the government and business columnists is one of the reasons that people as they say, have just stopped listening.
1. Because it is dull & they've heard it too often &
2. Because it doesn't ring true.

Take this quote for example: "Little more needs to be said about unfair dismissal laws. New laws will effectively raise costs for small business and so adverse effects on hiring could be expected. The magnitude of such effects, however, is anyone's guess."

My guess may not be quite as educated as the author's but I am confident that the magnitude will be negligible. As a student I learnt that efficient producers engaged the optimum number of labour and capital units required to meet production targets.

As a small businessman I found that translated as: employers should hire as many people as they need & no more. Employment and investment increases with demand.

No one is going to miss out on sales because they are frightened of hiring. If you are unsure of the number of employees you’ll need, you hire casuals. With ‘permanent’ staff you always had a 3-month probation period. Labor has effectively increased that to 12 months for small business & that is more than enough. Permanent probation is unreasonable.

In any case unfair dismissal laws aren’t a cost. Wages are, an increase in wages or other costs will reduce your profit margin. However company profits as a share of the economy are currently at record levels so that shouldn’t be too much of a concern overall.

Having heard tales of record prosperity until they are sick of hearing it, wage earners will feel entitled to their share and at least some sense of security.

- Mr Smith
Posted by MrSmith, Tuesday, 20 November 2007 11:18:05 PM
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