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The Forum > General Discussion > Low wages growth, who's fault is it!

Low wages growth, who's fault is it!

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There is increased talk about low wages growth, yet there appears to be little talk about just where wages come from, which is profits.

As an example, I guy I met lead a drivers strike at a large trucking company, saying they needed a pay rise.

I suggested that perhaps its not the companies fault, as they, (one who services the two major retailers), are constantly being screwed over in an effort for the big two to lower their cost bases and while I know he understood, he could not bring himself to accept the fact , being a unionist of cause.

You see, unless the company makes more profits, how on earth can they, short of dipping into their own pockets, pay the increase. Of cause that increase also brings with it additional costs such as super and work cover to name a couple.

People have to understand that as long as they seek out the bargains, and demand discounts, or shop online as an example, profits will be depleted and costs, including wages and other running costs, have to be cut.

I find it amazing how people expect a pay increase without realising, or accepting where the increase has to come from. To ignore this is to expect the employer to take a pay cut, just to give to the employee.
Posted by rehctub, Sunday, 28 May 2017 7:57:58 PM
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That is the way it works. Wage rises are needed to support the economy. Business are making all time high profits and wages are shrinking, so to balance that out wage rises are necessary. That has always been the case. We even have the govt; calling for wage rises.
The minimum wage needs to rise by 50 $ / week now.
Posted by doog, Monday, 29 May 2017 8:15:27 AM
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Dear Butch,

Where do you get these ideas from?

Wages are an expense to a business just like materials, electricity and rates. I regularly change electricity providers because it is easy and there are plenty of of them. That being said the cost of electricity has gone up higher than inflation over the last few years. I always adjust my own prices to account for inflation, not to do so would be stupid.

Wages however have not kept pace with inflation.

It costs any business to turn over staff and it is something that should be avoided. One of the reasons I always thought it prudent to pay above award because it was an efficiency measure.

If a business can't afford to pay decent wages then in my book they should not be in business at all. The role of the owner is to assess if he or she has a viable operation based on all the costs vs the profit achieved. Some try to manage unsustainable businesses by screwing over workers. They might as well be hooking up illegal wires to electricity poles to bypass the meter. Both are theft.
Posted by SteeleRedux, Monday, 29 May 2017 11:37:23 AM
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As a Right wing individual favouring free enterprise in most things, and despising unions in general, I must point out that, as real wages fall, prices are INCREASING. As Australian manufacturers desert Australian workers and move off shore for cheaper wages, prices are still INCREASING. I think that Australian manufacturers and Australian retailers are among some of the greediest bastards on Earth.

When I was young, I worked in the family clothing retail business and, for many years there was price control on school wear and work wear. Profit allowed on both was about 30%; all other goods could be marked up to about 50%, which covered the business for the vagaries of fashion and left-over goods that had to be marked down to cost or less to get rid of.

Now, no controls at all, and fashion goods, particularly women's are marked up to 175% to 200%, and nobody blinks an eyelid.

Profits are now too high, and desk-bound managers salaries are too high. Workers' wages are hot the problem.

I have lost most of the sympathy I had for Australian businesses, and I am really pissed off with the politicians handing over of essential services to private, usually foreign, thieves
Posted by ttbn, Monday, 29 May 2017 12:09:31 PM
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Wages do not come from profits. Profits come from wealth (goods and services) created by labour making use of the bounty of nature. Wages are part of the expense account of freeloaders acquiring wealth they have not personally created.
Posted by EmperorJulian, Monday, 29 May 2017 2:58:17 PM
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The low wages growth is the government's fault. They've failed to stimulate the economy, so now demand is too low to support higher wages growth.
Posted by Aidan, Monday, 29 May 2017 3:40:19 PM
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