ACTU to seek rise in minimum wages as home ownership becomes a pipe dream.

Date
    March 25, 2014


Home ownership is beyond the reach of an estimated 1.5 million Australians because the growth in house prices has outstripped the rise in minimum wage more than twofold, unions say.      :(

The ACTU will lodge a submission to the Fair Work Commission on Friday calling for a rise in the minimum wage, now at $622.20 per week, or $32,355.44 a year.

While the minimum wage was equivalent to 14 per cent of the mean house price in 1993, it is now at less than 7.5 per cent.

ACTU secretary Dave Oliver said a 250 per cent increase in average house prices in the past 20 years had made it impossible for those earning minimum wages to buy a home.      :(


"For those on a low wage, home ownership is a now pipedream," he said. "Someone on a minimum wage of $622 per week has enough to cover their basic costs and that's about it. These workers tell us it's impossible to save up a deposit, let alone afford the weekly repayments."

Mr Oliver said the minimum wage had increased by 91.2 per cent from 1993 to last year, and would have needed to rise by 254.7 per cent - $1154.42 a week or $60,029.84 a year - to keep up with house prices.

He said the only way low income earners could buy a home was to work multiple jobs.      :(

"Many minimum wage earners have been working all their lives caring for older Australians in aged or community care, they work farms, they clean schools and hospitals or look after young children in childcare.'' he said.

Ian Pandilovki, 58, of Granville, has seen his salary increase from $28,000 a year to $45,000 over the past 14 years.

The single father, who works as a cleaner at a Sydney high school, says he ''can't even think about'' buying a house - ''it's not within reach''.      :(

He pays about $330 a week in rent.

Welfare Rights Centre director Maree O'Halloran said her organisation came across many women in their 50s who had been carers and were now working in sectors related to cleaning, care, hospitality and retail.

''These women are struggling to survive because both the minimum wage and the Newstart Allowance are too low,'' she said.      :(

In its submission to the annual wage review, the Australian Industry Group said a careful approach was needed in increases to minimum wages ''given the adverse economic impacts which would result from an excessive increase''.

A spokesman for Employment Minister Eric Abetz said the government would make a submission to the Fair Work Commission shortly. ''We'll have more to say about this then,'' he said.

Read more: http://www.smh.com.au/business/the-economy/actu-to-seek-rise-in-minimum-wages-as-home-ownership-becomes-a-pipedream-20140324-35eb1.html#ixzz2wubrorVX

a very poor understanding of economics there crook.

get rid of negative gearing, make the family home subject to CGT, include the family home in the assets test for welfare benefits.

these would have a huge effect on cost of housing.

raising wages is pure inflation and inflation drives up costs including housing and drives up interest rates making housing even less affordable.

fail my friend.
F minus
must try harder ;)

aquascoot wrote on Mar 25^th, 2014 at 7:01am:

a very poor understanding of economics there crook. get rid of negative gearing, make the family home subject to CGT, include the family home in the assets test for welfare benefits. these would have a huge effect on cost of housing. raising wages is pure inflation and inflation drives up costs including housing and drives up interest rates making housing even less affordable. fail my friend. F minus must try harder ;)

Seriously? You think anyone that loses their job should have to sell their family home?

SOB

The ACTU will lodge a submission to the Fair Work Commission on Friday calling for a rise in the minimum wage.      [smiley=thumbsup.gif]

We can blame both parties for this as it all boils down to globalisation, Cheap imports that are now not so cheap, Destruction of local Industry, Foreign ownership have all played a part in it, you say raise minimum wage but how will business afford it? It will be the final nail in the  coffin for local industry & small business. And a massive increase in unemployment.
If you really want a picture of how much less you are worth, Look at the price of gold. Look back 20 years to how much gold your wages will buy and look how much it would buy you now, In my case personally its a 1/3 of what I use to get and I've been at the same Job for 26 years.

New research: executives paid too much and the minimum wage should be raised

02 March, 2014 | Media Release A new survey reveals that the majority of Australians believe executives are paid too much and that the minimum wage should be increased to ensure a ‘decent standard of living’.

ACTU President Ged Kearney said that what this research shows is that the community understands why the minimum wage is important and why we can’t allow an American style ‘working-poor’ to emerge in Australia.

“With a whopping majority, the survey clearly shows that people view the ballooning pay packets handed out to executives as excessive,” Ms Kearney said

“Working people are concerned that they are getting less and less of the economic pie despite dedicating 40 hours a week – often more – to work and contributing significantly to their employers success.

“Balancing the family budget such as mortgage, bills, petrol and childcare costs all in the face of rising unemployment and job losses in the news every day is making people anxious.”

Ms Kearney said the current push by the Abbott Government and conservative forces who want to see wages drop in Australia was not resonating with the public.

“People are not stupid. They know that lower wages will hurt them and will change Australia. They have seen what has happened in America with the emergence of ‘working poor’ and they are genuinely worried that this could happen here," Ms Kearney said.

“Nearly 60 per cent of people said that they are worried about Australia moving in the direction where working a 40-hour week would not give workers enough to live on. They don’t want a situation like in the US where people work two jobs in order to cover their costs.

“People appreciate what we have here and feel proud that we are a high wage, high productivity nation. They don’t agree that worker’s pay should be cut or that the minimum wage is too high.”

Submissions for the minimum wage case are due on March 26th.

Ms Kearney said the ACTU will be fighting hard to see an appropriate rise in the minimum wage and ensure it gives people enough to live on.

“Anything less is unacceptable. Working 40-hours a week and getting less than a living wage is a slippery slope to a kind of Australia working people do not want to live in," Ms Kearney said.

BlOoDy RiPpEr wrote on Mar 25^th, 2014 at 7:20am:

We can blame both parties for this as it all boils down to globalisation, Cheap imports that are now not so cheap, Destruction of local Industry, Foreign ownership have all played a part in it, you say raise minimum wage but how will business afford it? It will be the final nail in the  coffin for local industry & small business. And a massive increase in unemployment. If you really want a picture of how much less you are worth, Look at the price of gold. Look back 20 years to how much gold your wages will buy and look how much it would buy you now, In my case personally its a 1/3 of what I use to get and I've been at the same Job for 26 years.

Business always complains that outfits will close if the minimum wage is lifted.

Guess what?

It very rarely happens.

While house prices have risen more than wages, I think those figures are a bit rubbery, and that the timeframe of 20 years has been selected because it shows a greater increase than would have been the case than if a shorter timeframe were selected.

Sydney’s median price is $660,000.  In 1994 it was $192,375.

Among full-time workers, the average wage is somewhere around $73,000 per year.  In 1994, it was around $37,750.

The minimum wage is currently around $32,350.  In 1994 it was around $12,600.

If you look at a slightly shorter timeframe than 20 years, Sydney's house price to income ratio is not much different from what it was in 2002, well down from its peak level in 2003.

"For those on a low wage, home ownership is a now pipedream," he said. "Someone on a minimum wage of $622 per week has enough to cover their basic costs and that's about it. These workers tell us it's impossible to save up a deposit, let alone afford the weekly repayments."      :(

Good thing I'm not on minimum wage.

wrote on Mar 25^th, 2014 at 7:42am:

"For those on a low wage, home ownership is a now pipedream," he said. "Someone on a minimum wage of $622 per week has enough to cover their basic costs and that's about it. These workers tell us it's impossible to save up a deposit, let alone afford the weekly repayments."

Hasn't this more or less always been the situation for those on the minimum wage though?

So another good reason to lift the minimum wage then?.      :(         

Sir Spot of Borg wrote on Mar 25^th, 2014 at 7:08am:

aquascoot wrote on Mar 25th, 2014 at 7:01am: a very poor understanding of economics there crook. get rid of negative gearing, make the family home subject to CGT, include the family home in the assets test for welfare benefits. these would have a huge effect on cost of housing. raising wages is pure inflation and inflation drives up costs including housing and drives up interest rates making housing even less affordable. fail my friend. F minus must try harder ;) Seriously? You think anyone that loses their job should have to sell their family home? SOB

No, I think they should get a new job if they need money.

... wrote on Mar 25^th, 2014 at 8:07am:

Sir Spot of Borg wrote on Mar 25th, 2014 at 7:08am: aquascoot wrote on Mar 25th, 2014 at 7:01am: a very poor understanding of economics there crook. get rid of negative gearing, make the family home subject to CGT, include the family home in the assets test for welfare benefits. these would have a huge effect on cost of housing. raising wages is pure inflation and inflation drives up costs including housing and drives up interest rates making housing even less affordable. fail my friend. F minus must try harder ;) Seriously? You think anyone that loses their job should have to sell their family home? SOB No, I think they should get a new job if they need money.

That doesnt seem to be how it works nowadays though hey. 200k jobs for 800k ppl. Not really very likely huh.

SOB

Cancel the Citizenship of anyone not born in Australia and ban foreign ownership of Australian Homes and the prices would be affordable again even for the lowest paid workers.

aquascoot wrote on Mar 25^th, 2014 at 7:01am:

a very poor understanding of economics there crook. get rid of negative gearing, make the family home subject to CGT, include the family home in the assets test for welfare benefits. these would have a huge effect on cost of housing. raising wages is pure inflation and inflation drives up costs including housing and drives up interest rates making housing even less affordable. fail my friend. F minus must try harder ;)

I agree. The minimum wage is not the problem, it's the escalation in house prices with little being done to stop it. Investors have too many unnecessary concessions. In 2003 the Howard government asked the Productivity Commission to investigate housing affordability. Despite that, nothing has been done to address the issue by three different governments.

CGT must also have no concessions; tax the profits the same as other income. The concessional rate of CGT only encourages speculation in the housing market and accelerates the wealth divide.

We need to look at other factors as well that affect home affordability. Limited land releases. Limited job opportunities in regional areas. Stamp duty. First home buyers' grant.

... wrote on Mar 25^th, 2014 at 8:07am:

Sir Spot of Borg wrote on Mar 25th, 2014 at 7:08am: aquascoot wrote on Mar 25th, 2014 at 7:01am: a very poor understanding of economics there crook. get rid of negative gearing, make the family home subject to CGT, include the family home in the assets test for welfare benefits. these would have a huge effect on cost of housing. raising wages is pure inflation and inflation drives up costs including housing and drives up interest rates making housing even less affordable. fail my friend. F minus must try harder ;) Seriously? You think anyone that loses their job should have to sell their family home? SOB No, I think they should get a new job if they need money.

Silly argument, enough available jobs do not exist. The only way enough jobs can become available is if three million people on high-paying jobs are willing to relinquish their jobs so people on low incomes can take their proper turn earning good money. That is not going to happen.

BlOoDy RiPpEr wrote on Mar 25^th, 2014 at 8:40am:

Cancel the Citizenship of anyone not born in Australia

That is not a productive measure and is a breach of human rights.


Quote:

and ban foreign ownership of Australian Homes

No need to ban ownership of Australian residential property by foreign residents. Just start taxing them properly. A good start is doing away the concessional rate of capital gains tax. There is no good reason to retain it for foreign investors, and little reason to retain it for everyone else. If foreign investors earn profit in Australia, make them pay the full rate of tax. No concessions. No exceptions.


Quote:

and the prices would be affordable again even for the lowest paid workers.

It would take a while for any effects to be felt. Any measures to calm the escalation in house prices must avoid creating the problem of negative equity.

Quote:

Cancel the Citizenship of anyone not born in Australia and ban foreign ownership of Australian Homes and the prices would be affordable again even for the lowest paid workers.

How does that help to lower the house prices?  Its like saying, cull all the ducks, so there are more chicken eggs available.   It doesnt make any sense.

The main problem with housing affordability is that Australia is still built around the geography of the nineteenth century, with five major cities. A couple of major regional centres also exist like the Gold Coast and Newcastle, but these are exceptional. Canberra is also exceptional. About half of all Australians live within 50 km of one of five major cities. This would have worked fine in 1890 when the Australian population was a few million, but it's now outdated. It is ridiculous that in a country with a land area of 7.7 million square kilometres, half of all people are crowded into less than half of a percent of the landmass, despite Australia's cities being quite spread out by world standards.

We need to get people out of our capitals. We need more cities. More places with a ready supply of jobs. More hubs of industry and commerce. More places where people are willing to live.

We should choose some regional areas to become new cities with a population of around 100,000 to 250,000 people. We could choose an existing town, or even buy a few unproductive farms adjacent to good infrastructure (road, rail, power and water) and found new greenfield cities. Encourage companies to relocate with generous tax benefits.

Encouraging development of the north of Australia is one option. This is a more expensive option because it would require tens of billions in new infrastructure.

Any strategy for this kind of regional development needs to be a bipartisan approach. This would be a long-term project, potentially over decades. It can't be subject to the whims of partisan politics.

Good luck fixing this issue - no major party wants to touch it.

BlOoDy RiPpEr wrote on Mar 25^th, 2014 at 8:40am:

Cancel the Citizenship of anyone not born in Australia and ban foreign ownership of Australian Homes and the prices would be affordable again even for the lowest paid workers.

Gawd. . . . . there are ppl here that were born in pommyland and came here with their parents because in those days you didnt need a passport/visa or something when you were a baby. You wanna deport them to somewhere they have never been?

SOB

Bam wrote on Mar 25^th, 2014 at 9:13am:

aquascoot wrote on Mar 25th, 2014 at 7:01am: a very poor understanding of economics there crook. get rid of negative gearing, make the family home subject to CGT, include the family home in the assets test for welfare benefits. these would have a huge effect on cost of housing. raising wages is pure inflation and inflation drives up costs including housing and drives up interest rates making housing even less affordable. fail my friend. F minus must try harder ;) I agree. The minimum wage is not the problem, it's the escalation in house prices with little being done to stop it. Investors have too many unnecessary concessions. In 2003 the Howard government asked the Productivity Commission to investigate housing affordability. Despite that, nothing has been done to address the issue by three different governments. CGT must also have no concessions; tax the profits the same as other income. The concessional rate of CGT only encourages speculation in the housing market and accelerates the wealth divide. We need to look at other factors as well that affect home affordability. Limited land releases. Limited job opportunities in regional areas. Stamp duty. First home buyers' grant.

This is BS. The house prices are only going up in certain areas (the ones getting media attention) but other areas are not.

SOB

Sir Spot of Borg wrote on Mar 25^th, 2014 at 11:14am:

Bam wrote on Mar 25th, 2014 at 9:13am: aquascoot wrote on Mar 25th, 2014 at 7:01am: a very poor understanding of economics there crook. get rid of negative gearing, make the family home subject to CGT, include the family home in the assets test for welfare benefits. these would have a huge effect on cost of housing. raising wages is pure inflation and inflation drives up costs including housing and drives up interest rates making housing even less affordable. fail my friend. F minus must try harder ;) I agree. The minimum wage is not the problem, it's the escalation in house prices with little being done to stop it. Investors have too many unnecessary concessions. In 2003 the Howard government asked the Productivity Commission to investigate housing affordability. Despite that, nothing has been done to address the issue by three different governments. CGT must also have no concessions; tax the profits the same as other income. The concessional rate of CGT only encourages speculation in the housing market and accelerates the wealth divide. We need to look at other factors as well that affect home affordability. Limited land releases. Limited job opportunities in regional areas. Stamp duty. First home buyers' grant. This is BS. The house prices are only going up in certain areas (the ones getting media attention) but other areas are not. SOB

What areas are these? Capital cities, mostly. See my other post on this.

tickleandrose wrote on Mar 25^th, 2014 at 9:41am:

Quote: Cancel the Citizenship of anyone not born in Australia and ban foreign ownership of Australian Homes and the prices would be affordable again even for the lowest paid workers. How does that help to lower the house prices?  Its like saying, cull all the ducks, so there are more chicken eggs available.   It doesnt make any sense.

It would get rid of Tony Abbott. That's got to be a good thing, right?

aquascoot wrote on Mar 25^th, 2014 at 7:01am:

a very poor understanding of economics there crook. get rid of negative gearing, make the family home subject to CGT, include the family home in the assets test for welfare benefits. these would have a huge effect on cost of housing. raising wages is pure inflation and inflation drives up costs including housing and drives up interest rates making housing even less affordable. fail my friend. F minus must try harder ;)

This!! enough with rising mining wages, working at mcdonalds is not meant to be a life time profession, your contributing very little to the nation. Its meant for a kids to get some extra money after school hours..

I fear the day, when our young can drop out of school and just work at mcdonalds earning enough for a second home and a personal jet.

Quote:

It would get rid of Tony Abbott. That's got to be a good thing, right?

This is a tricky question.  I dont know.  ;)

Sir Spot of Borg wrote on Mar 25^th, 2014 at 8:37am:

... wrote on Mar 25th, 2014 at 8:07am: Sir Spot of Borg wrote on Mar 25th, 2014 at 7:08am: aquascoot wrote on Mar 25th, 2014 at 7:01am: a very poor understanding of economics there crook. get rid of negative gearing, make the family home subject to CGT, include the family home in the assets test for welfare benefits. these would have a huge effect on cost of housing. raising wages is pure inflation and inflation drives up costs including housing and drives up interest rates making housing even less affordable. fail my friend. F minus must try harder ;) Seriously? You think anyone that loses their job should have to sell their family home? SOB No, I think they should get a new job if they need money. That doesnt seem to be how it works nowadays though hey. 200k jobs for 800k ppl. Not really very likely huh. SOB

Maybe then they should start their own small business, this is why we need to teach Entrepreneurial skills to our children so when they grow up and there is no jobs or they feel unhappy about the amount they are getting payed, they can go out and create their own business.

Pantheon wrote on Mar 25^th, 2014 at 11:38am:

Maybe then they should start their own small business, this is why we need to teach Entrepreneurial skills to our children so when they grow up and there is no jobs or they feel unhappy about the amount they are getting payed, they can go out and create their own business.

Kids are computer literate but have less common sense skills than their parents and grandparents had.

Children of 10-12 know what they want to "be" and it isn't helping people it is MAKING MONEY.

Pantheon wrote on Mar 25^th, 2014 at 11:38am:

Sir Spot of Borg wrote on Mar 25th, 2014 at 8:37am: ... wrote on Mar 25th, 2014 at 8:07am: Sir Spot of Borg wrote on Mar 25th, 2014 at 7:08am: aquascoot wrote on Mar 25th, 2014 at 7:01am: a very poor understanding of economics there crook. get rid of negative gearing, make the family home subject to CGT, include the family home in the assets test for welfare benefits. these would have a huge effect on cost of housing. raising wages is pure inflation and inflation drives up costs including housing and drives up interest rates making housing even less affordable. fail my friend. F minus must try harder ;) Seriously? You think anyone that loses their job should have to sell their family home? SOB No, I think they should get a new job if they need money. That doesnt seem to be how it works nowadays though hey. 200k jobs for 800k ppl. Not really very likely huh. SOB Maybe then they should start their own small business, this is why we need to teach Entrepreneurial skills to our children so when they grow up and there is no jobs or they feel unhappy about the amount they are getting payed, they can go out and create their own business.

Kind of, but I don't see it as something that could be 'taught'. 

I think our obsession with "teaching" everything as opposed to letting people learn is why people are so straitjacketed.

Formal education is for drones.  Entrepreneurs just get stuck in and do it.

Thet thar book larnin' never hurt young Jethro there - got hisself a Grade 3 eddication and plays that banjo on thet bridge fer nickels 'n dimes from them passin' foreign tourists - more'n you cin make in a day's farmin'!

Bam wrote on Mar 25^th, 2014 at 9:52am:

The main problem with housing affordability is that Australia is still built around the geography of the nineteenth century, with five major cities. A couple of major regional centres also exist like the Gold Coast and Newcastle, but these are exceptional. Canberra is also exceptional. About half of all Australians live within 50 km of one of five major cities. This would have worked fine in 1890 when the Australian population was a few million, but it's now outdated. It is ridiculous that in a country with a land area of 7.7 million square kilometres, half of all people are crowded into less than half of a percent of the landmass, despite Australia's cities being quite spread out by world standards. We need to get people out of our capitals. We need more cities. More places with a ready supply of jobs. More hubs of industry and commerce. More places where people are willing to live. We should choose some regional areas to become new cities with a population of around 100,000 to 250,000 people. We could choose an existing town, or even buy a few unproductive farms adjacent to good infrastructure (road, rail, power and water) and found new greenfield cities. Encourage companies to relocate with generous tax benefits. Encouraging development of the north of Australia is one option. This is a more expensive option because it would require tens of billions in new infrastructure. Any strategy for this kind of regional development needs to be a bipartisan approach. This would be a long-term project, potentially over decades. It can't be subject to the whims of partisan politics.

The NBN would have allowed people to move to country towns some of which are crying out for people to buy houses, rather than be stuck in capital cities due to their employment.

However, stopping negative gearing and lifting land tax and council rates on vacant residential land will encourage more house building.