Now I know this will cause a stir, but it simply has to be said.

Well, apparently we have the highest minimum wage in the western world.

Let's not worry about the fact that we no longer have a manufacturing industry to speak of. Or let's not worry about the fact that we are alomst a net importer of food. Or let's not worry about the 80 something % of cars on our roads being imported.

Let's just make sure the little Aussie battler is on a decent wage for sweeping the floor.

Well done guys, take a bow!

Ok, before you set out to crucify me, please allow me to better explain myself.

So, put those daggers back in the draw for a while.

It is not the fact that those on the minimum wage get paid what they do, it is more the fact that the burden of living expenses, (which by the way is a bi-product of lifestyle choices) has been placed on the employers and it is this burden from over payment for unskilled workers that has caused us to become anti competitive on the global market.

It stands to reason that so long as the guy sweeping the floor, or mowing the lawn is on twenty bucks and hour, the business simply has no chance of competing in the global arena, and let's face it, this is where our future lies.

Farming is another prime example.

China is buying our farm land at alarming rates. Now it is my opinion that the driver behind this is the fact that they realise that our farmers will not be able to afford labour in 10 years time, and that scenario gets worse if their crops ripen or their cows need milking on a Sunday.

Governments should carry the burden of living expenses, not SMALL employers and there are many other options that should have been considered, such as, reducing foreign aid, not fighting someone Else's wars, or paying people to become 'baby factories', many of whom have little or no intention of contributing anything to society other than populating the place with kids they can ill afford to look after.

What has happened in this country in the past 10 to 15 years is a disgrace. Many of our pensioners, after having contributed all those taxes throughout their working lives are having the resort to living in poverty, even to the point of going without basics just to survive.

Hardly what I would call motivation to work hard.

rehctub,
of course we need to keep pensions below the breadline. How else can we reduce the payouts so that more can be provided for ex one or two-term pollies ? We need to keep many things down so that the professionals in health & other services can retire on more than what the average wage earner earns. Don't worry about the fact that it is the wage earner who provides by going without. It works, ask any high ranking bureaucrat.

While we the people demand better, safer working conditions for ourselves and strong regulations to protect our environment; while at the same time reward other countries for doing the exact opposite, we can't win this one.

The argument has always been that we have a responsibility to lift developing countries out of poverty which is a noble thing to do, but at what point do we stop sending ourselves into poverty to achieve this noble act? And when are we going to demand from these developing nations that they treat their people and environment with the same respect and guidelines that we follow? Until such time that we do, we will forever be behind the eight ball.

It seems to me that all those in favour of free trade and off shoring are just taking us for suckers and using this excuse to bolster their own wealth at our expense.

Recent talk of a carbon tax to create incentive for individuals to develop new green technologies and thereby creating new jobs in this country is another slide of hand trick to sucker us in. Any new tech that is developed here will before long be manufactured off shore to avoid the cost of our employees, environmental laws and bureaucratic red tape, (none of which is present in other developing countries) just as has been witnessed in America with a large solar panel manufacturing plant sponsored by the Obama administration being closed down and sent to China because the cost of doing business in America is far greater than that of China, they have the same problems we do.

We would not allow this to happen here

http://www.dailymail.co.uk/home/moslive/article-1350811/In-China-true-cost-Britains-clean-green-wind-power-experiment-Pollution-disastrous-scale.html

but we seem to be more than happy to allow this to happen over there.
It's things like this that are killing our wealth and our jobs!

All this talk of full employment and highest minimum wage is just more smoke to cloud the real issues, don't be fooled!

Rehctub:

...You are somewhat on the mark I think; but when it comes to the survival of age pensioners, facts go a little deeper. One huge overriding reason for poverty amongst pensioners is the cost of housing. To break that down further, divide that group into renters and owners. Where renters lose over half of the pension to rents, (irrespective of Government assistance), life is excessively bleak for them in particular; but is worse for that other ignored group, the Unemployed, who find themselves in the same boat as Pensioners, but with LESS resources from the meagre endowment, directed to them for their survival.

rehctub I would ask why is the government allowing foreign ownership of farming land? Or why not a cap?

It will be interesting to see the outcome of the ABS report due for release in September 2011 on direct foreign ownership of agricultural land, water rights and businesses undertaking agricultural activities in Australia.

As for the minimum wage, do you believe that the minimum wage should be one that a person could reasonably live on? In the US the minimum wage is not a 'living' wage and there is a huge working poor. Hospitality staff rely on tips rather than their meagre wage.

Fact is Australians get paid more than Chinese workers so they can afford to pay more as well. It is all relative.

The problem is we have built this prison for ourselves with FTAs and removing tariffs so that our strong IR system has to compete with an exploitative one. This is not something IMO that for which we should be aspiring, and in many cases the goods are not that much cheaper,with profits made on cheaper labour, pocketed by all the other fingers in the pie over any huge benefits to the consumer. Yes the goods are still cheaper but not proportional to to savings made in labour. It is just greed.

That has always been a furphy indicative of designer brands now being manufactured OS but with increases in prices rather than decreases.

PS: I should add that greed is the issue at all levels of society but there is a tendency to target the poorer end rather than examine the excesses in the middle and top end.

A more equitable system would allow a reasonable minimum wage ('living' wage) while acknowledging the burdens of management without some of the ridiculous salaries.

Really the problem lies in wage disparity, the higher the middle/upper salaries, the greater the bracket creep from the bottom up to keep pace with inflationary pressures.

I hope you don't feel like I am crucifying you, I just believe you are attacking the problem from the wrong end.

Everyone ought to have some minimum, but what's that got to do with wages?

Surely one's employer(s) are not one's parents or guardians. Why should someone be responsible for another's welfare and not vice-versa (for example an employee responsible for his/her employer's minimum living conditions)?

Since it is in the interest of society that everyone should have some minimum to live on, then society is the one who ought to provide it, not employers, and the most natural way to do it is by providing a negative income-tax.

What wonderful foresight. ABC2 is running a repeat of the BBC documentary "Blood, sweat and t-shirts".

http://www.bbc.co.uk/thread/blood-sweat-tshirts/

After watching the first part, all I could think was, "Gee, why cant Australia be just like India?". Anyone enjoying the sight of human beings treated like battery chickens would love to go the Indian way.

I'm more concerned about the top-end of the spectrum. We can easily maintain our "lucrative" minimum wage if we just put a cap on the big earners...
In order to stay competitive, let's cut the salaries of executives, cut the dividends of share holders, cut their access to Swiss bank accounts, and make them fly economy class..

But Squeers, you dont get a top without a bottom. The inequality in India is orders of magnitude greater than Australia.

Imagine being able to employ servants to do all your domestic chores for a handful of change. It would be difficult to give up such a luxury were you accustomed to it, and you might even be inclined to defend yourself by arguing that you are helping these people and giving their self esteem a boost at the same time. You are indeed a philanthropist of sorts.

For some, creating a broader spectrum of wealth can be quite lucrative.

One of the problems highlighted by rehctub is the need to be competitive in the global arena. I think that, if we are to impose caps on executive salaries, we will exacerbate that problem. Why run an Australian company when you can hold the same position in a foreign business and earn twice as much? High salaries allow us to be competitive in the executive-seeking market and, though many in here will disagree, I would say that a good executive team is a central component to a good business.

I was an employee and shareholder of Woolworths Corporation when Roger Corbett drove the company well ahead of its rivals. He is a talented businessman who, along with quite a good team, strengthened an Australian company. Say what you will about the supermarkets (and there's a lot to say these days), but the business he ran employs many and contributes huge sums to our taxman's coffers and to our superannuation packages. As his reward, he received a ridiculously large salary.

Whether or not his package was fair or even appropriate is certainly open to debate. However, if our businesses are unable to offer these packages, how can we hope to attract anyone of a high calibre?

While I'd like to see my pay rise and some of the higher-end pays decrease, if we want to be competitive on a global market we need to offer competitive pays or work really, really hard to convince business leaders that life in Australia is so wonderful that they should be willing to sacrifice terrific salaries to come here.

Yes, wages and prices are funny things, aren't they?
Rehctub is a butcher, I believe. In 1991, I was selling bullocks to the Wingham abattoir for 240c a kilo. A few months ago I was driving into Rockhampton, listening to the local stock report.
Heavy steers were selling for 220-240c a kilo.
How much has retail meat gone up in the last 20 years?
Globalisation is a crock, competing with countries with lower standards of living is stupid, and only a bloody idiot would think it's a coincidence that almost all the countries with -relatively- higher numbers of super rich, also have the worst poverty records.
The rich get rich by stealing (charging money at interest) from the poor.

Otokonoko:>> I was an employee and shareholder of Woolworths Corporation when Roger Corbett drove the company well ahead of its rivals. He is a talented businessman who, along with quite a good team, strengthened an Australian company<<

Otokonoko you give too much credit to the Woolies and Westfarmers management teams, the talent in this duopoly is the Australian Competition and Consumer Commission who allowed the former mentioned corporate bastards to run small business out of town over the past thirty years.

Westfarmers wasn't in the grocery picture when Corbett was doing his thing. And the ACCC may have supported (and may still support) the duopoly, but it was the executive team at Woolworths - driven by Corbett - that pushed Woolies ahead of Coles Myer (as it was at the time). That's my point, even if it was illustrated through a controversial figure. Big bucks draw good businessmen (and women). If I was valued at seven figures in New York, why would I settle for five or six figures in Sydney?

"Big bucks draw good businessmen (and women). If I was valued at seven figures in New York, why would I settle for five or six figures in Sydney?"

One of the comments that struck me was that of the daughter of a fashion designer. She regularly saw her mother well rewarded and often complemented for her work. She contrasted this with the Indian sweat shop workers who made garments as good for about 12 rupees a piece.

The solution is simple Otonoko. Just don't let people who abandon Australia for riches, live here, invest here or retain the benefits of citizenship, own property etc, here again. We make them ultimately choose to live somewhere else as well. We could still make this place, the place too be, making most smart people want to be here, by providing opportunities for development, other than relying on commercial processes to do so.

If Australia was focussed on it's island continental status, and our collective need to nurture our land, lives, freedoms, privileges, we would probably understand, that we alone probably have the opportunity beyond any other continental mass, to remain a liveable place in the future.

You would only have to go back to the pre Howard days, when there was talk of a Multi Function Polis in Sth Australia. The very kind of thing that would have put Australia at the very fore front of technology and the future, and retained the interest of our boffins, particularly if not controlled by business and driven by profits alone.

In 1996 all such notions disappeared, such as renewable energy; it may have started much earlier, wage indexation might have stayed retaining living standards, we may not have sold Employment services, promoted private health and education at the expense of the public purse. Sold Telstra and had fibre and super fast internet, much earlier and much cheaper, I would have had my teeth fixed and bulk billed through medicare. Ahh but I can only dream.

Now I'll never know now, because they changed the Cross Media Ownership Laws as well, entrenching a favoured few, and reduced public media funding, and stacked the board of the ABC with cronies and funding conditions.

Privatisation has not done my country well, thats for sure, and the current lot (Gov't) haven't got the bottle to take on the magnates(Mining , Media etc), and restore some previous understandings about, "who this country, and it's imagination and it's resources", belong too.

Hear Hear thinker 2.
A very simple way to make Oz internationally competitive would be to let all those primarily interested in fat pay checks move elsewhere, and just keep those who have less material objectives.
Does anyone truly believe Tiger Woods or Greg Norman would stop playing golf, if they couldn't make 20, 40 or 100 million dollars doing it?
Do you really think the likes of Mel Gibson et al would stop being actors, if they thought driving trucks paid better? Natural show offs would pay to be on the stage.
Look at the world's third richest man, Warren Buffet. He's still living in the house he bought for $31k, 3 decades ago. The irony is, if he had been born in a socialist country he would have been a brilliant finance minister.
Or look at Linus Torvalds, and the Linux operating system. Far superior to Windows in almost every way, and totally free; constantly being improved by volunteers, simply because they enjoy what they do.
The problem isn't Capitalism or Communism. It's Materialism. The Russian Party honchos were just as materialistic as any millionaire, and generally lived better (relatively).
Perhaps we need a new way of bestowing fame and glory.
Knights Of The Tin Cup, perhaps?

The term in AU used to be two bob millionares.
No matter what people earn, they live to the limit. Over the top with mortgage, Tv in every room, New cars. They have a long way to come down.
The next downturn will see no stimulous spending, because of the out cry of the last one, that kept AU floating.
If the housing pricing falls there will be countless people up to their neck in debt, and no recovery. The missed opportunity is in savings that arn't there.
Give the keys back to the bank, all you have to do then is pay the shortfall.

Clearly, time applies vaseline to the lens of history, thinker 2.

>>...a Multi Function Polis in Sth Australia. The very kind of thing that would have put Australia at the very fore front of technology and the future, and retained the interest of our boffins, particularly if not controlled by business and driven by profits alone.<<

The insight and energy of the late John Button were legendary, as I was fortunate enough to witness first hand. And the MFP was a great concept, for sure. But finally it was proof positive that it is not possible to put lipstick on a pig, and expect it to win Miss Universe.

It was a classic example of the impotence of the public service when faced with turning an idea into a plan.

Senator Button never wavered in his enthusiasm. In 1980 he said "The MFP is an exciting project, a rare example of Australians planning ahead to grasp and control the future for the benefit of the nation"

The ultimate irony being, of course, that it turned out to be a perfect example of Australia's inability to grasp or control anything more complicated than a Sherrin.

Journalist Ben Hill put together an interesting analysis of the project back in 1982.

http://www.benhills.com/articles/articles/MSC12a.html

I particularly enjoyed his description of the site that was "selected".

"If you can picture the pollution of the Ganges, the pestilence of Mexico City and the stinking swamps of the Louisiana bayous, you are getting close. The site itself, around the estuary of the Port Adelaide River, was cursed by nature even before man came along. It is a tidal no-man's-land of mud, barely above sea-level, with the waves of Gulf St Vincent crashing down on one side, and a poisonous flood of urban stormwater pouring in from the other every time it rains. Even tracts of mangroves have given up the ghost and died."

Read it, and weep at the welded-on incompetence of governments, at any level and of any political stripe.

That should of course have been 1990 and 1992, not 1980 and 1982.

Apologies, the decades simply fly past, don't they.

"Read it, and weep at the welded-on incompetence of governments, at any level and of any political stripe."
Except for the really big jobs, like getting to the moon, perhaps?
Or maybe we just need to assassinate any politician who suggests a plan which will take longer than one political term, in order for it (the plan) to become a 'monument to the memory of...'
Seriously folks, remember the Harbour Bridge? The Sydney Opera House, the Snowy River Scheme? We were capable of greatness, once.
Or for that matter H.B. Higgins, and the world shaking concept of 'a living wage'.

Getting back to the original claim for this thread, as I recall it was Kevin Rudd who proudly proclaimed that Australia had the highest minimum wage - *as a percentage of the median wage*.
One of the very few times I've heard a politician even mention the median wage.
the $75k average wage sounds so much better (to someone on >$100k) than a lousy old $40k median wage.
Of course, it would be equally true to point out that 50% of Australians make buggerall more than the minimum wage.

Rehctub's idea has already been tried (and failed) in early 19th century England. Google 'Speenhamland System'. In some areas, reformers had the brilliant idea of using welfare (from the parish, not the central government) to subsidise the wages of the poor, just what rehctub is asking for.

Once the employers knew that the public would make up the difference between what they were willing to pay and what the workers and their families needed to survive, wages fell. Previously independent workers could no longer compete with the subsidised labour and ended up in the system as well. Before they were eligible for the subsidy, they had to become destitute, so if such a worker had any property, say a small piece of land, he or she was required to sell it and live on the proceeds until the money was all gone. Social inequality grew.

As more and more people were forced into the welfare system, benefits fell and rates on property owners rose to pay for the mess. Eventually, wages plus benefits amounted to less than the labourers had received from wages alone before Speenhamland. Large scale employers benefited, but small scale employers like rehctub found that they were paying more in higher taxes than the extra cheap labour was worth. In the end, the system had to be abandoned as unaffordable. Thanks, but no thanks.

Duly noted, Grim.

>>getting to the moon... the Harbour Bridge? The Sydney Opera House, the Snowy River Scheme?...<<

These took place between 1961-69, 1912-32, 1954-73, and 1949-74 respectively.

No politician would even suggest any such scheme today. As John Button unwittingly proved, the machinery of government is now firmly focused on doing the very minimum, and avoiding responsibility at all costs.

That's why there are so many "consultants" sucking on the public teat. Public servants would rather sell their grandmother into slavery than actually do anything "courageous".

Incidentally, Justice Higgins' ruling in ex parte H V Mackay was overturned on appeal. And determined to be constitutionally invalid in R v Barger. Even his vision suffered from being trampled underfoot by the system.

Are you serious, Thinker 2?

"The solution is simple Otonoko. Just don't let people who abandon Australia for riches, live here, invest here or retain the benefits of citizenship, own property etc, here again. We make them ultimately choose to live somewhere else as well. We could still make this place, the place too be, making most smart people want to be here, by providing opportunities for development, other than relying on commercial processes to do so."

To actually enforce such a policy would require us to revoke the citizenship of anyone who went to work overseas for a couple of years if they happened to earn more there than they do here. I have a good friend who worked as an engineer in the Emirates for four years. He learnt a lot over there (and brought home a fat wallet as well) and is now applying his learning back home in Australia. Your policy would have him stuck overseas for life, denied citizenship of his home country (I can see the headlines now, as he is aboriginal). You would also ban every Australian musician who tries to break into the US market, every Australian actor who tries to make it big in Hollywood and every Australian scholar who tries to earn his stripes at Oxford.

If we want to be competitive on the international stage, we can't become insular and ban our citizens from seeking opportunities overseas.

Divergence,

One important difference between the Speenhamland System and what Rehctub and I suggest, is that subsistence will be assured by the government, not by the parish. Another difference is that one needs not become destitute to receive negative income-tax.

The idea is simple: if you earn $X/year and X is less than a given threshold (T), then you receive a negative tax of (T-X)*30% (which you can apply to receive in weekly installments if under cash hardship). This way, you retain an incentive not only to work, but also to bargain for better pay conditions. If you are unhappy with your job, either because it is too hard, because it pays too little or because the employer makes unethical demands on you, then you can stay home without starving (living on 0.3T), and that places pressure on the employer to improve your conditions. The power to set the minimum-wage and conditions is therefore in the hands of every worker. Because you can now take your time to find a decent employment and are not obliged to accept the first job offered, you (or your union if you choose to belong to one) may just as well bargain for a higher wage than is currently being fixed as minimum by the government uniformly across all occupations and all circumstances.

This comes in place of the already-existing unemployment-benefit hoax, which treats the unemployed (and under-employed) as scum, encourages them to cheat (as most unemployed people do), to play cat-and-mouse with Centrelink pretending to be seeking employment where in fact they have no incentive, or even a negative incentive, to do so.

So far I presented our idea from a practical/financial perspective, but the primary incentive for it is not financial, but moral:

1. If two people agree on a deal between them, then who the hell is the government to tell them they are not allowed to?

2. Forcing people to work has an ugly name: Slavery! and that's simply not on. The current system allows Centrelink to force people onto unethical jobs (or else starve). The proposed system prevents that.

Hi Yuyutsu, while I share some sympathy for your views I find the concept of paying people to sit on their bums doing nothing while others work rather unappealing (even if they are called 'investors').
In an age when so many 'work' in offices, I think it's about time we acknowledge that learning is work. Indeed, surely it must be harder to acquire knowledge, than to apply knowledge already gained? I know my 2 children worked hard at school (although somehow managing to learn less than I did, who hardly worked at all; very strange).
I would like to see an hourly rate of pay offered for education. If you find yourself unemployed for more than a few weeks, go back to school -or technical college- and pick up more skills/knowledge.
The more hours you apply to your education the faster you can be employed and the more you get paid.
The hourly rate would provide a safety net, which employers would have to compete against, while the higher rate of pay by employers would provide a real incentive, as the options would be between work (education) and work (applying the education); rather than sit at home and spend as little as possible, or take on work that only pays marginally more, and inevitably increases expenditure.

I think your onto something there Grim.

And now we are drilling down to the social fabric, the place where this discussion should be had. Thanks Grim.

I'm not entirely serious Otonoko, but you get the idea. I suspect however, that some incentives or deterrence wouldn't go astray, when it comes to the brain drain this country is experiencing and businesses are not the only consideration or recipients of a smarter or more informed population, we are as well.

For a long time business in Australia has reaped the benefit of our better than average Public Education system, now in decline at the hands of ideological loonies and wreckers.

Business is never going to give something back unless compelled by legislation
(not when there is a buck to be made), instead.

Hi Grim,

...Just started courses in ancient-mongolian philosophy, advanced numerology and Ph.D about the drinking habits of OLO users... my children also teach me patience...

Seriously, someone sitting on their bums is better than someone breaking into your home because they are hungry, or even than someone begging in the streets, or even than someone who cheats Centrelink (we pay many of the later anyway).

Unless you're OK with slavery, some leakage is unavoidable, but lets face it, living on a subsitence pension is not a reason to celebrate, so why not work a bit on top and retain 70% of your income?

The moral justification for that leakage is that:
1) Everyone receives it, not just those who do not work or study (if you work, you receive it by not paying any tax on your first $T).
2) It is a rightful compensation for the fact that modern society has created an environment where it impossible to subsist without money. Anyone for example who attempts to go around hunting and gathering in nature, will face such a wall of laws and by-laws that very soon they will find themselves in prison (and keeping them there would cost society much more!). It is only fair that those who enjoy the use of money should give back just a little bit to those who are victims of its use, whom they wrecklessly denied the opportunity to feed themselves in other ways.

Besides, most unemployed who do not study either are not sitting on their bums, but are likely to be helping their community and families in informal ways. Those who do just sit on the bums, are either saints that meditate, radiate peace and bless us; or more likely ill/disabled people. Yes of course, the later could get disability-pension, but for some it is an unfairly humiliating process. To receive the pension they are forced to see doctors and beaurocrats and to admit to the world, to their families and often even to themselves, that they are unhealthy. It is simply wrong to force them into it against their will.

"Seriously, someone sitting on their bums is better than someone breaking into your home because they are hungry, or even than someone begging in the streets, or even than someone who cheats Centrelink (we pay many of the later anyway)."
I agree entirely, Yuyutsu. As an egalitarian, I think the first step is admitting anyone who is born hale and healthy, with average intelligence in an advanced country has already won the most important lottery.
Some people are literally 'born lucky', even if they never appreciate it -compared to the billions who aren't.
Looking after the less fortunate isn't just a moral imperative, it's ultimately just self preservation.
But now we are seeing 3rd generation dole bludgers. Literally. I know a family of three generations, none of whom have ever worked. In fact, one of them mentioned to me on dole day "I just have to go in and earn my wages". He was being quite serious. He regarded filling out the necessary paperwork and fronting up to the Centrelink office as his job.
If we must have unemployed (and we must) why not have well educated unemployed? Over 50's -such as I- are finding it harder to find jobs, but we can still learn, and many could teach; in fact in my experience the best way to gain real understanding of your subject is to teach it to someone else (although I'm not too sure about numerology).
But your point also brings to mind the question of retirement. It seems to be inevitable that retirement age will raised in coming years. This is only a tragedy for those who really don't like their jobs. I know many of my generation (those who proudly lay claim to 'an old fashioned work ethic') who hate their jobs, always have, and look forward to retirement in much the same way as younger folk look forward to weekends.
If these people could find jobs they actually enjoyed and believed in, they probably wouldn't want to retire.
See John Hatton is coming out of retirement to contest the next NSW election? At age 77.

Dear Grim,

As for the dole-bludgers, the thing to watch for is whether they are hiding an extra income. If they do, then it's criminal and should be dealt with accordingly. If they don't, then replacing the dole with a negative income tax only increases their incentive to work.

Regarding retirement, I am in exactly the same situation that you describe, but I hope to retire in a few years, then I can do more good things for myself and others without the money-connection. I will not wait for the formal retirement age because I don't expect to ever receive an age-pension anyway. I rather rely on my own savings.