How cute! Lower wages for the poor = good for all.
This is based on labor being just another business input that must compete with capital and technology in the marketplace. Do we really want Australian laborers to compete with Chinese peasants? Do we need to level our "playing field" with backward nations?
The "Left" has no problem with the harsh realities...they just believe that the comfortably well off should share the pain as well as the gain, and that some theory has limits.
Some of us have visited countries where social democracies have not been in power. Sure small business takes off, you see them on every street corner at all hours, but the cost in human terms is high.
Will the bailed financial industry pay back their $M "performance" bonuses made during the profit bubble? No.
All very well to kick the poor, just do it fairly and tax the rich while your are at it, or at least stop giving them welfare!

ozandy

I am just noting that there are reasons why such arguments are put forward by some. Fact is we are losing jobs to other countries because of wages, whether one likes it or not.

Personally I too have a self-interest to want higher wages for myself. That is why I paid my union fees for many years as a factory and building site labourer.

But if we are to adhere to freer trade in general terms, it may be that lower wages can be offset by welfare so that no one has less than a certain level of income. This is an aspect i will seek to address in future articles.

Believe me, I have no interest to merely help the rich line their pockets with higher profits, although the business sector is indeed crucial to any national economy and society.

"Governments do not have enough money to fix the size of the problem"

This statement is ludicrous in the extreme. It is understandable that most people would assume that a federal budget functions just like a household budget on a larger scale but when the economically trained believe this it is a travesty. Federal government is not revenue constrained.

The way the current economic system is structured makes it difficult for innovation and efficiency to flourish. Luckily it can be adjusted and relatively easily fixed but we do have to change a few things.

The first and most important is to make the financial system subservient to the "real economy" and not the other way around. This can be achieved by stopping the financial sector being the ones who increase the money supply through the issuing of loans.

We should increase the money supply but only when we have created productive assets. There is no reason for Australia to go into debt to create infrastructure and other productive assets. We do not have it at the moment. If I go to a bank to borrow money to build a productive business I cannot get a loan. If I go to a bank to borrow money to buy an overpriced mansion I can get the money. The people who lend money they do not have (the banks) as the way of increasing the money supply have no interest in productivity - only an interest in being repaid.

Next we should find ways to encourage people NOT to consume. We can do this by Rewarding those who make the least demands on society - provided they spend their Rewards increasing the productive capacity of the country.

We should get away from the idea of providing services and instead provide money for people to make the choice of services. For example instead of health insurance we give people money that they can spend on health services - or save for an unhealthy day.

These are all easy reforms that can be achieved for little cost and little disruption.