Interesting article on wages stagnation

I don’t know about others. But as someone in their mid 30s, this article just had me saying “exactly, that’s right! Exactly!”

https://www.abc.net.au/news/2021-03-07/this-graph-explains-why-you-have-been-feeling-poorer/13221796?utm_source=abc_news_web&utm_medium=content_shared&utm_campaign=abc_news_web

edit to add a more recent link to an article from today, 4th July 2021

https://www.abc.net.au/news/2021-07-04/the-unemployed-have-been-used-to-control-inflation/100259072

My two cents:

The whole trickle down economics experiment has failed. Wages are flat, and have been for many years, almost my entire working life. I left uni and entered a working world filled with fear. A lot of people I know seems to fear losing their jobs. Everyone says they’re doing the work of 2-3 people and no new people get hired to fill the gaps. “Hiring freezes” seem to be the new norm for the last 10 years. People are being ripped off because big business are squeezing us for profits, but we are too scared to fight back.

And I can’t see it ending any time soon, not cause of the pandemic, but because I can’t see the Liberals losing an election. But the liberals economic policies are failing and they refuse to change their ways.

(And throw in ridiculous house prices and I just see my whole generation living in massive debt and never retiring until we physically can’t work. And then we live in poverty until we die)

“ To emphasise how just how bad it was from 2013 through 2019, he says it was a period of income stagnation for ordinary Australians unprecedented since — and starting to challenge in longevity — the Great Depression of the 1930s.

"In the best of circumstances, by 2025, Australians will have lived through the longest period of real income stagnation in our national history," he warns.”

Oh no, it will end. Morrisons new work legislation seems to promote a situation where you can get rid of an older worker on a wage of say, $80K and replace them with 3 part time young people on about $25K each, but get more hours than the older person could provide at 80K. Very economical!

Of course, the older person now can't support their two live at home adult children on $25K, and the adult children can't cover the household expenses either, or get a home loan, but it's all okay, because 2 young people got a job!!!

God they are dickheads.

“ To emphasise how just how bad it was from 2013 through 2019, he says it was a period of income stagnation for ordinary Australians unprecedented since — and starting to challenge in longevity — the Great Depression of the 1930s.

"In the best of circumstances, by 2025, Australians will have lived through the longest period of real income stagnation in our national history," he warns.”

And the Government and the Reserve Bank wonder why there is no inflation ....

My two cents:

The whole trickle down economics experiment has failed. Wages are flat, and have been for many years, almost my entire working life. I left uni and entered a working world filled with fear.

 

I absolutely agree with this. Trickle down economics is a complete failure - except for the few people at the top who have gotten extremely wealthy out of it. It has increased wage disparity and caused social dislocation.

I have lived through most of it - it was a real Reagan/Thatcher catch cry. I'm still trying to work out why our then Labor Government bought into it as well.

Scott Morrison has previously stated that low wages are the aim of his government and their economic plans.

Scott Morrison has previously stated that low wages are the aim of his government and their economic plans.

But they also want a surplus? Can’t happen without an increase in tax paid. You can’t keep wages low, and cut taxes and think by some miracle revenue will increase. Their modelling must show them that.

It’s not a failure if you are making you real constituents wealthier while convincing the people you are screwing over to keep voting to be screwed over.

We visited a local wooden toy factory the other day (its a tourist attraction) . I noticed the toys for sale were nearly all cheap imported toys from china. But really, Im not suprised. The place in question would have been badly hurt by corona and possibly bush fires. How can they make and sell wooden toys and be able to compete. It would mean a well made wooden car might cost $60 when an imported chinese one costs $15. And since lots of us had pay cuts with corona, who can afford to buy local?

So I guess it becomes a catch-22. Wages dont go up, so people cant support local, which hurts wage growth.

I feel sad for local businesses being caught in it.

Unfortunately this article isn't telling us something we don't already know.

As someone who has been in the (professional) workforce for 15 years, the only way i've experienced real wages growth is by climbing the career ladder. The 1-2% piecemeal annual wage increases we get nowadays won't even cover inflation. Even in better days the most they ever went up was maybe 3-5% the first year and then it dropped to 2% or less thereafter.

Meanwhile, they've lowered the threshold on HECS repayments and the cost of living has risen substantially. My insurance, professional registration, car registration and electricity goes up every year by at least 5%. Medicare rebates haven't risen in ... forever, so the gap has widened and we pay more in out of pocket costs. It's crazy.

Oh no, it will end. Morrisons new work legislation seems to promote a situation where you can get rid of an older worker on a wage of say, $80K and replace them with 3 part time young people on about $25K each, but get more hours than the older person could provide at 80K. Very economical!

Of course, the older person now can't support their two live at home adult children on $25K, and the adult children can't cover the household expenses either, or get a home loan, but it's all okay, because 2 young people got a job!!!

God they are dickheads.

And the thing is, so many of the young employees won't stick around, at least in my experience. They'll stay for a year or two, then go back to study, or get promoted elsewhere. Hey, I was the same in my 20s, I moved from job to job, testing the waters and going back to study whilst I could.

Now that I'm in my 40s with a kid, I want to stay put, no doubt like many other parents. Most of our new employees have been aged 30 or younger and most of them have already moved on.

Unfortunately this article isn't telling us something we don't already know.

As someone who has been in the (professional) workforce for 15 years, the only way i've experienced real wages growth is by climbing the career ladder. The 1-2% piecemeal annual wage increases we get nowadays won't even cover inflation. Even in better days the most they ever went up was maybe 3-5% the first year and then it dropped to 2% or less thereafter.

Meanwhile, they've lowered the threshold on HECS repayments and the cost of living has risen substantially. My insurance, professional registration, car registration and electricity goes up every year by at least 5%. Medicare rebates haven't risen in ... forever, so the gap has widened and we pay more in out of pocket costs. It's crazy.

Same. Everyone in their mid 30s has lived their whole working lives with these crappy wage rises that don’t cover inflation. And they now think it’s normal. If either DH or I had stayed in our original job roles we wouldn’t be in a good spot financially.

And while in other threads people get flamed when they say they’re struggling on 100k a year. Maybe it’s not the $ amount, maybe over the last 10 years their wage just hasn’t matched inflation, and after 10 years of slowly slowly falling behind, you certainly feel like “where is all the money going?”. I know we were stuck in that rut for about 5 years until DH got more senior positions, it was this feeling of doing the hard slog and getting nowhere fast.

Oh no, it will end. Morrisons new work legislation seems to promote a situation where you can get rid of an older worker on a wage of say, $80K and replace them with 3 part time young people on about $25K each, but get more hours than the older person could provide at 80K. Very economical!

Of course, the older person now can't support their two live at home adult children on $25K, and the adult children can't cover the household expenses either, or get a home loan, but it's all okay, because 2 young people got a job!!!

God they are dickheads.

And people keep voting them in..

My two cents:

The whole trickle down economics experiment has failed. Wages are flat, and have been for many years, almost my entire working life. I left uni and entered a working world filled with fear. A lot of people I know seems to fear losing their jobs. Everyone says they’re doing the work of 2-3 people and no new people get hired to fill the gaps. “Hiring freezes” seem to be the new norm for the last 10 years. People are being ripped off because big business are squeezing us for profits, but we are too scared to fight back.

And I can’t see it ending any time soon, not cause of the pandemic, but because I can’t see the Liberals losing an election. But the liberals economic policies are failing and they refuse to change their ways.

(And throw in ridiculous house prices and I just see my whole generation living in massive debt and never retiring until we physically can’t work. And then we live in poverty until we die)

LemonMyrtle, this is the reality for so many people. The casualisation of labour is also terrible. I wonder if this whole ideology of trickle down economics leaves people scurrying to survive so that they don't have time to unionise, or protest.

I am so aware of how replaceable I am, and probably at lower cost. Things like performance development to obtain a higher salaried job have been off the cards for over a decade where I am employed.

It's mass manipulation of the population. You give people a small tax cut and you buy their vote. It's ironic, because while my wage hasn't kept up with inflation for 18 years, I would rather people on Jobseeker received increased assistance. I am really ashamed about the way people trying to get work are treated. We all need dignity.

It's also inherently corrupt that farming labour and hospitality depend on and exploit workers from other nations. This is human slavery, and it seems that our economy depends on it.

“ To emphasise how just how bad it was from 2013 through 2019, he says it was a period of income stagnation for ordinary Australians unprecedented since — and starting to challenge in longevity — the Great Depression of the 1930s.

"In the best of circumstances, by 2025, Australians will have lived through the longest period of real income stagnation in our national history," he warns.”

 

And the Government and the Reserve Bank wonder why there is no inflation ....

The government wonders, the RBA seem to know exactly what’s happening. The government just won’t listen to them.

https://www.google.com.au/amp/s/amp.smh.com.au/politics/federal/interest-rates-will-stay-low-until-wages-grow-says-rba-governor-20210310-p579ao.html

Quote:

He said wages growth, currently at 1.4 per cent, would have to lift above 3 per cent to get inflation back to the bank’s target of between 2 and 3 per cent. The last time wages growth was that strong was in 2013.

Unemployment would have to be closer to 4 per cent, well down from its 6.4 per cent level at present, while under-employment would also have to fall.

“The evidence strongly suggests that this will not occur quickly and that it will require a tight labour market to be sustained for some time. Predicting how long it will take is inherently difficult, so there is room for different views,” he said.

“But our judgment is that we are unlikely to see wages growth consistent with the inflation target before 2024. This is the basis for our assessment that the cash rate is very likely to remain at its current level until at least 2024.”

Interesting article.

I wasn't aware that immigration had moved from permanent/long term immigrants to temporary visas.

Although I agree that trickle down is a fail, theres much more to it than that. The industry I work in is moving from a business model with large profits and thus dividends to shareholders, to a business model with slim profits. I'd imagine thats going to impact retirees, super funds, etc, as well as employees wages.

Meanwhile, they've lowered the threshold on HECS repayments and the cost of living has risen substantially. My insurance, professional registration, car registration and electricity goes up every year by at least 5%. Medicare rebates haven't risen in ... forever, so the gap has widened and we pay more in out of pocket costs. It's crazy.

Little incidental things as well. Like paying for parking in places you previously didnt have to. Extra tolls and charges on things. Online shopping coming with a hefty delivery fee, even though it saves the seller money. Products being poor quality and not lasting meaning you have to replace them more frequently.

Has anyone read Another Now by Yanis Varoufakis? It's a novel exploring alternatives to how our economy is currently functioning. Maybe we could make an EB bookclub to read it? It's on my (longish) lists of books I want to read. Sandtalk is also on that list- I was 1/4 of the way through and got distracted.

The only winners are big business and the liberals mates.

I was approached by a large international mining company to propose how we could help them attain a 30% total cost cut. Oh and they were cutting contractors from 66 to 3/5. In other words, the cheapest contractor with the largest workforce wins.

Gold prices have never been higher yet they are still looking at cutting costs.

OMG, we have been had! I never thought about it, but this article makes a lot of sense. Lower unemployment means higher wages, and they are purposely keeping unemployment at a certain level to stop that!

“ Professor Ross Garnaut, a Professorial Research Fellow in Economics at the University of Melbourne, has condemned Australia's economic policymakers for the situation.

But his criticism refers to how they've been running the economy for years, not just for the last 12 months.

He's referring to the federal government and the Reserve Bank.

He says their decision to "allow" hundreds of thousands of Australians to languish in unemployment in recent years, to suppress wages and inflation, as part of the country's broader economic policy settings, has immiserated people and cost the economy hundreds of billions of dollars in lost economic activity.”

https://www.abc.net.au/news/2021-02-25/ross-garnaut-economists-unemployment-rba-government-critique/13186724

And this article suggests the RBA and treasury are getting on board with the idea. But forgive me if I’m a bit cynical about it all. They just want more tax dollars. They will still keep unemployment high enough to stifle wage growth to appease their corporate mates.

https://www.abc.net.au/news/2021-05-02/policymakers-have-tried-to-suppress-wages-growth-since-the-1980s/100109148

But unemployed people just need to try harder, yeah?

But unemployed people just need to try harder, yeah?

It’s all a giant con. We are just controlled by the powers that be. At the moment, If you get a job, someone else ain’t, because someone somewhere decided 6% unemployment is just reflecting people shuffling from one job to another (and you don’t want wages to rise either). Might have been true 30 years ago, but funnily enough, things change.

Another article about how much they’re using the unemployed to keep wages and inflation low.

https://www.abc.net.au/news/2021-07-04/the-unemployed-have-been-used-to-control-inflation/100259072