Opinion Politics (warning, may contain political views you disagree with)

[mightymouse75]

Cool dude.

Burn the planet for political point scoring?

"Lol, I'm destroying the planet for future generations"

And what the hell is '... I am too foolish to read the site rules'? What word are you combining with left? Any other archaic 'gems' you got for me?

No wonder you like ScoMo.

Stop it. Your signaling is hurting my eyes..

 

[Admiral Byng]

There's a lot of very outdated thinking in here on the wages supply/demand issue. A generation out of date. We now have the internet and work can be done far more cheaply offshore as long as there is an internet connection. The countries that specialise in this are not small, The Philippines has a population of over 100 million, India has 1.2 billion... and all of Africa are starting to gear up for it too. Low wages jobs are disappearing fast, why pay an Aussie office worker $25 per hour when a Filipina will do it for $5?

We can never compete with such unequal wages. But we can't reset the minimum wage at $5 either, because the rest of the economy is set up for the basics like food and housing at first world levels. We can't recalibrate wages down to such low levels without destroying the economy. If rents and food prices were recalibrated so somebody earning $5 per hour could still afford to eat and live in a proper house, then farm incomes will crash, property prices would crash because there would need to be absurdly low rent caps. It just won't work. Reducing wages will make us poorer as a nation. Unless you want to go backwards and have these people living in shanty towns and slums on the outskirts of the city without reliable access to clean water and electricity. .

 

[bushchook]

We can never compete with such unequal wages. But we can't reset the minimum wage at $5 either, because the rest of the economy is set up for the basics like food and housing at first world levels.

We expect people who are on the dole to live on 1/3rd of what the minimum wage is. If the minimum wage was lower, less people would be living on the dole.

 

[salim malik]

Lower wages doesn't produce more jobs .
How many new jobs has cutting penalty rates produced?

 

[Ben The Donkey]

There's a lot of very outdated thinking in here on the wages supply/demand issue. A generation out of date. We now have the internet and work can be done far more cheaply offshore as long as there is an internet connection. The countries that specialise in this are not small, The Philippines has a population of over 100 million, India has 1.2 billion... and all of Africa are starting to gear up for it too. Low wages jobs are disappearing fast, why pay an Aussie office worker $25 per hour when a Filipina will do it for $5?

We can never compete with such unequal wages. But we can't reset the minimum wage at $5 either, because the rest of the economy is set up for the basics like food and housing at first world levels. We can't recalibrate wages down to such low levels without destroying the economy. If rents and food prices were recalibrated so somebody earning $5 per hour could still afford to eat and live in a proper house, then farm incomes will crash, property prices would crash because there would need to be absurdly low rent caps. It just won't work. Reducing wages will make us poorer as a nation. Unless you want to go backwards and have these people living in shanty towns and slums on the outskirts of the city without reliable access to clean water and electricity.

Keeping wages at their current levels isn't doing us any favours either. We're only beginning to see the tip of the iceberg now, but already Australian industries are beginning to collapse, particularly in the non-internet retail and manufacturing sectors, in the face of online competition.

Australia failed to fully embrace high-tech in the way other economies such as Singapore and Japan did when the opportunity presented itself in past decades, and now it may be too late to do so because other countries are in a better position to be able to during their modernization process. The only real alternative, as we're currently seeing, is in service industries - education being a prime example. But those are reliant almost completely upon reputation, which can be fragile. Australia is also still an excellent primary producer, but that may not last either, with changing technology dictating commodity demand and subsequent prices.

So your grandkids may well either be university lecturers, or selling them their coffee.

 

[Admiral Byng]

Keeping wages at their current levels isn't doing us any favours either. We're only beginning to see the tip of the iceberg now, but already Australian industries are beginning to collapse, particularly in the non-internet retail and manufacturing sectors, in the face of online competition.

Australia failed to fully embrace high-tech in the way other economies such as Singapore and Japan did when the opportunity presented itself in past decades, and now it may be too late to do so because other countries are in a better position to be able to during their modernization process. The only real alternative, as we're currently seeing, is in service industries - education being a prime example. But those are reliant almost completely upon reputation, which can be fragile. Australia is also still an excellent primary producer, but that may not last either, with changing technology dictating commodity demand and subsequent prices.

So your grandkids may well either be university lecturers, or selling them their coffee.

Yes I know. I used to work for a major bank, doing back office securities and loan contracts type stuff. Then they started up an office in India. Within a year they were not replacing any staff who left the Australian office, instead hiring more Indians. I saw the writing on the wall and I left, I was one of the lucky ones who got a job in the mining industry. The rest of them all got made redundant about a year after that. We had an office of nearly 100 people at one stage.

Where our future lies is in industries which can't physically be taken offshore and done somewhere else. Things like mining and minerals processing, farming, renewable energy. Things that need to be done in a physical location. I think we need to get involved more in processing minerals, but economists have been talking about value-adding and downstream processing since the 1980s.

 

[Admiral Byng]

We expect people who are on the dole to live on 1/3rd of what the minimum wage is. If the minimum wage was lower, less people would be living on the dole.

The world just doesn't work so simply as that. There are not any one cause issues with simple fixes.

 

[wahooo]

Where our future lies is in industries which can't physically be taken offshore and done somewhere else. Things like mining and minerals processing, farming, renewable energy. Things that need to be done in a physical location. I think we need to get involved more in processing minerals, but economists have been talking about value-adding and downstream processing since the 1980s.

Of the industries "of the future" that you've stated there, I'd like to focus on the mining and mineral processing industries. These two will likely be some of the earliest industries to incur job losses as a result of automation. The reality of the matter is that technology will render these jobs obsolete. Not to mention, mining companies already prefer to process minerals overseas because the costs are lower, the costs of establishing processing centres of any commercial scale in Australia would be massive and politically its a dangerous landscape for any company to navigate. These big companies already prefer destinations where the costs are lower even in spite of the litany of risks they face in these often unstable regulatory environments. If your focus is to bring jobs to Australia, I doubt this approach will work. Yes mineral processing may add more value than shipping minerals off to China or Africa to be processed but it doesn't add anywhere near as much as value as say the professional services industry. This isn't an argument against mining as a whole just a word of caution that it doesn't contain as many jobs as it once did.

The way we're moving here in Australia, particularly with such a great education system (despite me constantly bemoaning the fact I have to pay for stuff) is towards the delivery of high value-added professional services. And, this has many benefits for us, namely and perhaps most importantly that we avoid environmental degradation (yes it will still happen elsewhere but at least we get to live somewhat guilt free, yay).

In an increasingly globalised world "physical locations" aren't necessarily of paramount importance. With the automation of many jobs and the rapid rate of technological growth and perhaps for the sake of the environment I think we will certainly see Australia moving towards an economy focussed on the delivery of professional services, that "intangible" aspect of the work is perhaps where will see the most value added in the future. We're already seeing a massive increase in people leaving uni with postgraduate qualifications.

Someone alluded to the fact that Australia failed to embrace "high-tech" like other countries have done so earlier. I'm not sure whether that means the low value added process of manufacturing phones and microchips or the actual research and development of high tech products. We're in a fortunate position, being from the West, where IP laws favour us greatly. And, more to the point, Australia is well renowned for its research and innovation, particularly medical research. I don't think that ship has passed us, we can still jump on and the countries who have set sail before us provide an excellent example of what will work and what to avoid. We absolutely can and likely will catch up, would just be nice to have a government that doesn't chronically under-fund the education sector.

That's my outlook on the future at least.

 

[Admiral Byng]

Of the industries "of the future" that you've stated there, I'd like to focus on the mining and mineral processing industries. These two will likely be some of the earliest industries to incur job losses as a result of automation. The reality of the matter is that technology will render these jobs obsolete. Not to mention, mining companies already prefer to process minerals overseas because the costs are lower, the costs of establishing processing centres of any commercial scale in Australia would be massive and politically its a dangerous landscape for any company to navigate. These big companies already prefer destinations where the costs are lower even in spite of the litany of risks they face in these often unstable regulatory environments. If your focus is to bring jobs to Australia, I doubt this approach will work. Yes mineral processing may add more value than shipping minerals off to China or Africa to be processed but it doesn't add anywhere near as much as value as say the professional services industry. This isn't an argument against mining as a whole just a word of caution that it doesn't contain as many jobs as it once did.

The way we're moving here in Australia, particularly with such a great education system (despite me constantly bemoaning the fact I have to pay for stuff) is towards the delivery of high value-added professional services. And, this has many benefits for us, namely and perhaps most importantly that we avoid environmental degradation (yes it will still happen elsewhere but at least we get to live somewhat guilt free, yay).

In an increasingly globalised world "physical locations" aren't necessarily of paramount importance. With the automation of many jobs and the rapid rate of technological growth and perhaps for the sake of the environment I think we will certainly see Australia moving towards an economy focussed on the delivery of professional services, that "intangible" aspect of the work is perhaps where will see the most value added in the future. We're already seeing a massive increase in people leaving uni with postgraduate qualifications.

Someone alluded to the fact that Australia failed to embrace "high-tech" like other countries have done so earlier. I'm not sure whether that means the low value added process of manufacturing phones and microchips or the actual research and development of high tech products. We're in a fortunate position, being from the West, where IP laws favour us greatly. And, more to the point, Australia is well renowned for its research and innovation, particularly medical research. I don't think that ship has passed us, we can still jump on and the countries who have set sail before us provide an excellent example of what will work and what to avoid. We absolutely can and likely will catch up, would just be nice to have a government that doesn't chronically under-fund the education sector.

That's my outlook on the future at least.

I get the point you are making. But two things to consider - there is nothing stopping China, India, the Philippines etc from also developing their high value professional services sector and out-competing us on cost there too. Maybe that will be the next generation of jobs to go after the low value service jobs.

Secondly, not everyone can do these jobs. Whilst we maintain our current boorish and bogan Australian attitude to education that thinks the academic achievement necessary for such work is just for geeks and nerds we will still have large numbers of people not suited to this work. SO, while it is a useful sector to have, and we should pursue it, it is not really going to be a mainstay of the economy. It is still only likely to be a thing were we have a temporary lead while other countries catch up.

Not a very optimistic outlook I guess.

As far as the minerals processing goes, it depends upon what we use for energy. If the world (or large developed parts of it) starts taking climate change seriously and demands less fossil fuel usage, then those countries with a large renewable energy base will be better positioned. For most minerals processing the highest cost factor is energy rather than labour. Australia is well suited to having large scale cheap solar and wind power, if we can solve the storage issue. We have large tracts of semi arid land that is not currently economically useful which have abundant solar energy potential.

 

[bushchook]

The world just doesn't work so simply as that. There are not any one cause issues with simple fixes.

That's true, it's not entirely that simple. But it's also true that higher minimum wages increase unemployment.

 

[raffrox]

That's true, it's not entirely that simple. But it's also true that higher minimum wages increase unemployment.

And that there's also something called the working poor if it gets too low and that doesn't really help either.

 

[wahooo]

I get the point you are making. But two things to consider - there is nothing stopping China, India, the Philippines etc from also developing their high value professional services sector and out-competing us on cost there too. Maybe that will be the next generation of jobs to go after the low value service jobs.

Secondly, not everyone can do these jobs. Whilst we maintain our current boorish and bogan Australian attitude to education that thinks the academic achievement necessary for such work is just for geeks and nerds we will still have large numbers of people not suited to this work. SO, while it is a useful sector to have, and we should pursue it, it is not really going to be a mainstay of the economy. It is still only likely to be a thing were we have a temporary lead while other countries catch up.

Not a very optimistic outlook I guess.

As far as the minerals processing goes, it depends upon what we use for energy. If the world (or large developed parts of it) starts taking climate change seriously and demands less fossil fuel usage, then those countries with a large renewable energy base will be better positioned. For most minerals processing the highest cost factor is energy rather than labour. Australia is well suited to having large scale cheap solar and wind power, if we can solve the storage issue. We have large tracts of semi arid land that is not currently economically useful which have abundant solar energy potential.

On the point of say China and the Phillippines competing on professional services I'd say that's a long way from being a reality. There's definitely currently a large perceived quality gap and their education systems have a long way to go.

I probably disagree with your point about Australian attitudes to education, the over whelming trend is an increase in the number of people pursuing higher education and an increase in post grads, we're moving in the right direction. There will always be "unskilled" workers (for want of a better word) and they will probably be the most disrupted, I just hope our government provides adequate support to them if it be required.

Completely agree with your sentiments on renewable energy and we are well poised to take advantage of that transition, the market is moving that way, it's high time our legislators caught up.

On your point about mineral processing I feel it's relevant to add that mineral processing is unlikely to be set up in Australia regardless of the direction energy production takes. Yes, energy is one of the great costs associated with it but the costs of navigating the strict regulatory framework here is also significant, makes all the corruption and bribery elsewhere seem incredibly efficient.

 

[wahooo]

That's true, it's not entirely that simple. But it's also true that higher minimum wages increase unemployment.

True in ancient text books but the causal effect of minimum wages on employment is much more ambiguous in reality

 

[bushchook]

And that there's also something called the working poor if it gets too low and that doesn't really help either.

Making the only job someone can get illegal doesn't really help either.

 

[bushchook]

True in ancient text books but the causal effect of minimum wages on employment is much more ambiguous in reality

It's not ambiguous at all. Hard to measure sure because there are numerous other factors affecting employment other than just the minimum wage. But basic logic of demand and supply tells us that raising the price of anything reduces the demand for it. The same is true for labour.

 

[wahooo]

It's not ambiguous at all. Hard to measure sure because there are numerous other factors affecting employment other than just the minimum wage. But basic logic of demand and supply tells us that raising the price of anything reduces the demand for it. The same is true for labour.

So many economists have shown that raising a minimum wage increases employment rates, they've managed to control for all the other factors you refer to and isolate causality. There is more than enough evidence that any good economist should have some doubts about whether minimum wages increase unemployment. Yes, you can default back to the theories but when you do so you should recognise the empirical evidence to the contrary.

We keep coming back to this, do some reading, lets move on.

 

[Admiral Byng]

So many economists have shown that raising a minimum wage increases employment rates, they've managed to control for all the other factors you refer to and isolate causality. There is more than enough evidence that any good economist should have some doubts about whether minimum wages increase unemployment. Yes, you can default back to the theories but when you do so you should recognise the empirical evidence to the contrary.

We keep coming back to this, do some reading, lets move on.

To put it another way, wages are one individual business's cost, but a stimulus for the next business as the wage earned get spent.

 

[Ben The Donkey]

To put it another way, wages are one individual business's cost, but a stimulus for the next business as the wage earned get spent.

It benefits large corporations, but not small business. Small business has been dying in Australia for decades, to the advantage of large corporations and franchises. Minimum wages aren't the only reasons for that, obviously, but that a small business is less able to absorb the costs of employment is one reason.

 

[freo1997]

Bit off topic.

I hope we see a Bernie vs Trump in the debates later this year.

This is the clash we should of got in 2016.

Trump is a proven bully on stage, but gee Bernie is ruthless and doesn’t hold back at all.

If the dems rig it against Bernie again and bring in a mainstream candidate Trump wins, but my gut feeling is if The Bern gets the nom he’ll gather all those swing voters, obviously the democratic vote and the voters that do the throw aways to the independents.

Just to remember 18% of Bernie supporters went over to Trump when pitted against Hillary in 2016.

Thoughts on the upcoming election?

 

[Admiral Byng]

It benefits large corporations, but not small business. Small business has been dying in Australia for decades, to the advantage of large corporations and franchises. Minimum wages aren't the only reasons for that, obviously, but that a small business is less able to absorb the costs of employment is one reason.

Nah, business size does not matter. Most businesses rely upon customers with discretionary income to spend.

 

[Cesoir]

Bit off topic.

I hope we see a Bernie vs Trump in the debates later this year.

This is the clash we should of got in 2016.

Trump is a proven bully on stage, but gee Bernie is ruthless and doesn’t hold back at all.

If the dems rig it against Bernie again and bring in a mainstream candidate Trump wins, but my gut feeling is if The Bern gets the nom he’ll gather all those swing voters, obviously the democratic vote and the voters that do the throw aways to the independents.

Just to remember 18% of Bernie supporters went over to Trump when pitted against Hillary in 2016.

Thoughts on the upcoming election?

What's this got to do with the minimum wage? We're going to need a politics thread.

 

[Ben The Donkey]

Nah, business size does not matter. Most businesses rely upon customers with discretionary income to spend.

You don't think wages affect small business more than larger ones? I could think of several small business owners who would completely disagree.

It completely defies logical thought to think business size makes no difference.
In big business, costs are something to be minimised in order to increase profit margin. In a small business, costs are the difference between survival and going under.

 

[Admiral Byng]

You don't think wages affect small business more than larger ones? I could think of several small business owners who would completely disagree.

It completely defies logical thought to think business size makes no difference.
In big business, costs are something to be minimised in order to increase profit margin. In a small business, costs are the difference between survival and going under.

It is not about individual businesses. It is one of those paradoxical situations where people or businesses act a certain way on an individual level for perfectly rational and logical reasons, but the net effect on the economy as a whole ends up being negative if everybody else does it too. The paradox of thrift is another famous example.

 

[bushchook]

It is not about individual businesses. It is one of those paradoxical situations where people or businesses act a certain way on an individual level for perfectly rational and logical reasons, but the net effect on the economy as a whole ends up being negative if everybody else does it too. The paradox of thrift is another famous example.

Ben's point is that high wages hurt small businesses more than large ones because of economies of scale. If wages represent 80% of your expenses then higher wages are going to affect you more than if wages represent 20% of your expenses.

The main reason for the cut to penalty rates is because it was having the effect of seeing small businesses choosing to close when they were in effect. But some people in this thread will swear that employment rose elsewhere when that happened I guess.

 

[salim malik]

Small business rellies on spending money in pockets. Low wages mean less money to go around and the smaller businesses suffer.
Business don't close down because of wages they close down because punters haven't got the cash to spend.
Take a drive down South St and see the rows of empty shops.
The economy is stagnant, it's stuffed and all due to the coalition's stand on keeping wages growth at record lows.