Australian Politics Forum - Problem With The Minimum Wage

Bam

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Re: Problem With The Minimum Wage - Its Too Low
Reply #15 - Feb 4^th, 2015 at 10:59am

Swagman wrote on Feb 4^th, 2015 at 10:41am:

Bam wrote on Feb 4^th, 2015 at 10:36am:

aquascoot wrote on Feb 4^th, 2015 at 9:59am:

unfortunately , you cannot globalise the worlds economy without globalising the worlds labor market because , the labor market is a large part of the worlds economy.

so, given that we are globalised and the average punter wants to enjoy the cheap clothes , shoes and handbags made in asia by people on $1 an hour, the other side of the equation is that only the equivalent wage is available to be paid here.

you CANT buy shoes cheap from china and then bitch and moan that shoe manufacturers in OZ have to pay an hourly wage that is 18 x as high.

it is grade 1 maths/economics.

so either the minimum wage drops or trade barriers go up.

please tell me if you can come up with another rational solution??

Cut the pay of the wealthy by 95%.

...and there'd be justabout zero productivity and everyone would be equally poor

AKA - socialist Utopia... Cheesy

Which is of course what the result would be if minimum wage was $1/hour.

The wealthy would have to take heavy cuts too. It wouldn't even be mandated - it would just happen.

Think about rents for a start ... when someone's who's on $640/week and paying $300/week rent is now getting $80/week (by working two jobs), those $300/week rents will no longer be affordable. People would leave the private rental market by the tens of thousands. Rents would have to be cut back severely just to get people to rent at all.

Then there's the other goods and services ... all prices would have to be cut because demand would plunge. It would produce deflation, the economy would enter a recession, people would default on debts by the billions.

The simple truth is that businesses make money because people have money to spend. Take away people's spending power, business profits drop.

Face it .. cutting the minimum wage is not realistic. It would be too catastrophic to the economy.

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Swagman Gold Member Offline Beware of cheap imitations...... Posts: 15095 Illawarra NSW Gender:	Re: Problem With The Minimum Wage - Its Too Low Reply #16 - Feb 4^th, 2015 at 11:00am St George of the Garden wrote on Feb 4^th, 2015 at 10:50am: Still nothing new, relevant or interest posted by Swag. George's answer to political debate....
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Swagman Gold Member Offline Beware of cheap imitations...... Posts: 15095 Illawarra NSW Gender:	Re: Problem With The Minimum Wage - Its Too Low Reply #17 - Feb 4^th, 2015 at 11:02am Bam wrote on Feb 4^th, 2015 at 10:59am: Which is of course what the result would be if minimum wage was $1/hour. Myth
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crocodile

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Re: Problem With The Minimum Wage - Its Too Low
Reply #18 - Feb 4^th, 2015 at 11:19am

Swagman wrote on Feb 4^th, 2015 at 10:34am:

crocodile wrote on Feb 4^th, 2015 at 10:28am:

This is a far greater determinant of wage levels than labour input costs are.

What would doubling (for example) labour input costs do to productivity?

Nothing Swaggie. Wages are determined by productivity, not the other way around. Productivity is defined as Output divided by man-hours worked.

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Very funny Scotty, now beam down my clothes.

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crocodile

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Re: Problem With The Minimum Wage - Its Too Low
Reply #19 - Feb 4^th, 2015 at 11:25am

St George of the Garden wrote on Feb 4^th, 2015 at 10:25am:

What crap! The answer to poverty wages elsewhere is to be clever and do high end manufacturing, clean green agriculture. Not become an Asian shithole ourselves.

If australian workers got paid $1 a day, well, you wouldn’t need much agriculture would you? Bowl of rice with a teaspoon of veges or meat would be the daily diet.

We need to bring our tariff walls back to the height of our trading partners and rescind all 4 FTAs, none benefit the country!

No George, tariff walls are not the answer to poor performance in productivity growth. Selective tariffs only benefit the targeted industry at the expense of those that aren't targeted. Tariffs on everything simply means higher costs of goods with the same disposable income and mutual impoverishment.

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Very funny Scotty, now beam down my clothes.

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Dnarever

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Re: Problem With The Minimum Wage - Its Too Low
Reply #20 - Feb 4^th, 2015 at 11:26am

Bam wrote on Feb 4^th, 2015 at 9:54am:

The problem with the minimum wage at the moment is the taxes are too high. Within five years, the minimum wage is going to reach the $37,000 threshold for the 32.5% tax scale. When that happens, any increases to the minimum wage would only have 2/3 of its purchasing power.

The tax-free threshold has not increased in real terms over the last 30 years. Tax cuts at the bottom are strongly indicated.

The easiest way to increase the minimum wage is to cut taxes at the bottom end of the tax scale.

Quote:

Within five years, the minimum wage is going to reach the $37,000 threshold for the 32.5% tax scale.

Just as well that Bracket creep is right at the top of Smoked Hog's to do list.

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Bam Gold Member Offline Australian Politics Posts: 21905 Gender:	Re: Problem With The Minimum Wage - Its Too Low Reply #21 - Feb 4^th, 2015 at 11:27am Swagman wrote on Feb 4^th, 2015 at 11:02am: Bam wrote on Feb 4^th, 2015 at 10:59am: Which is of course what the result would be if minimum wage was $1/hour. Myth Link?
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Dnarever Gold Member Offline Australian Politics Posts: 59402 Here Gender:	Re: Problem With The Minimum Wage - Its Too Low Reply #22 - Feb 4^th, 2015 at 11:28am Swagman wrote on Feb 4^th, 2015 at 10:40am: St George of the Garden wrote on Feb 4^th, 2015 at 10:25am: What crap! Quality comeback Georgie. When Abbott said that about global warming theory you had a case of apoplexy. That was funny.
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Bam Gold Member Offline Australian Politics Posts: 21905 Gender:	Re: Problem With The Minimum Wage - Its Too Low Reply #23 - Feb 4^th, 2015 at 11:35am Swagman wrote on Feb 4^th, 2015 at 11:02am: Bam wrote on Feb 4^th, 2015 at 10:59am: Which is of course what the result would be if minimum wage was $1/hour. Myth And your explanation is ... Quote: This handwaving nonsense of yours isn't convincing. Try harder!
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Bam

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Re: Problem With The Minimum Wage - Its Too Low
Reply #24 - Feb 4^th, 2015 at 11:59am

aquascoot wrote on Feb 4^th, 2015 at 10:49am:

Bam wrote on Feb 4^th, 2015 at 10:36am:

aquascoot wrote on Feb 4^th, 2015 at 9:59am:

unfortunately , you cannot globalise the worlds economy without globalising the worlds labor market because , the labor market is a large part of the worlds economy.

so, given that we are globalised and the average punter wants to enjoy the cheap clothes , shoes and handbags made in asia by people on $1 an hour, the other side of the equation is that only the equivalent wage is available to be paid here.

you CANT buy shoes cheap from china and then bitch and moan that shoe manufacturers in OZ have to pay an hourly wage that is 18 x as high.

it is grade 1 maths/economics.

so either the minimum wage drops or trade barriers go up.

please tell me if you can come up with another rational solution??

Cut the pay of the wealthy by 95%.

Unfortunately for that idea, the wealthy tend to be the cream, they tend to be smart and they tend to be mobile,
cut their pay by 95 % and they'll be hopping on a plane to the UK or Singapore by 6 pm and you'll be left with a bunch of yobs from broadmeadows who cant read a bus timetable to try and grow the economy.

The cream must be nurtured, in the same way a brilliant young footballer is nurtured and pampered. because one day, he will bring you riches Cheesy

If the economy is "globalised", it is globalised everywhere. That's what globalised means. Do you honestly think Singapore's going to be untouched? Singapore owns more Australian infrastructure than the government of Australia. If those assets have to be written off because they are now worth bupkis, what then?

And if there are a few small, defenceless islands with wealth, it won't last long!

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Andrei.Hicks

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Re: Problem With The Minimum Wage - Its Too Low
Reply #25 - Feb 4^th, 2015 at 12:07pm

You don't get to decide if the "wealthy" take pay cuts.

We live in a globalised capitalist market.
The market is always right. Sometimes I may not like it, sometimes you may not but the market has the answer.

When you go for 5 different jobs how come the salary is always within a 5% range of each other?
Because the market rate is your worth to the system.

I know exactly how much I can offer say a Financial Accountant but yet I know for a decent a Finance Manager I need 150k plus.
The market rate has decided that, not me.

You don't have some all seeing omnipotent being saying raise or cut the wealthy.
There is no such thing.

CEOs are answerable to the market and to it's shareholders.
But if the market decides he is worth $3m per year. Then that's what he's worth!

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Anyone who lives within their means suffers from a lack of imagination - Oscar Wilde

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Swagman

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Re: Problem With The Minimum Wage - Its Too Low
Reply #26 - Feb 4^th, 2015 at 1:07pm

crocodile wrote on Feb 4^th, 2015 at 11:19am:

Swagman wrote on Feb 4^th, 2015 at 10:34am:

crocodile wrote on Feb 4^th, 2015 at 10:28am:

This is a far greater determinant of wage levels than labour input costs are.

What would doubling (for example) labour input costs do to productivity?

Nothing Swaggie. Wages are determined by productivity, not the other way around. Productivity is defined as Output divided by man-hours worked.

If that is so, Croc old bean, why do we have a minimum wage, penalty rates and collective agreements? Huh

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Bam

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Re: Problem With The Minimum Wage - Its Too Low
Reply #27 - Feb 4^th, 2015 at 1:25pm

Andrei.Hicks wrote on Feb 4^th, 2015 at 12:07pm:

You don't get to decide if the "wealthy" take pay cuts.

We live in a globalised capitalist market.
The market is always right. Sometimes I may not like it, sometimes you may not but the market has the answer.

When you go for 5 different jobs how come the salary is always within a 5% range of each other?
Because the market rate is your worth to the system.

I know exactly how much I can offer say a Financial Accountant but yet I know for a decent a Finance Manager I need 150k plus.
The market rate has decided that, not me.

You don't have some all seeing omnipotent being saying raise or cut the wealthy.
There is no such thing.

CEOs are answerable to the market and to it's shareholders.
But if the market decides he is worth $3m per year. Then that's what he's worth!

Rubbish - if the "capitalist market" was really global, you would be out of a job, or forced to compete for pay with someone from Poland who could do your job just as well for 20% of the pay.

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You are not entitled to your opinion. You are only entitled to hold opinions that you can defend through sound, reasoned argument.

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crocodile

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Re: Problem With The Minimum Wage - Its Too Low
Reply #28 - Feb 4^th, 2015 at 2:39pm

Swagman wrote on Feb 4^th, 2015 at 1:07pm:

crocodile wrote on Feb 4^th, 2015 at 11:19am:

Swagman wrote on Feb 4^th, 2015 at 10:34am:

crocodile wrote on Feb 4^th, 2015 at 10:28am:

This is a far greater determinant of wage levels than labour input costs are.

What would doubling (for example) labour input costs do to productivity?

Nothing Swaggie. Wages are determined by productivity, not the other way around. Productivity is defined as Output divided by man-hours worked.

If that is so, Croc old bean, why do we have a minimum wage, penalty rates and collective agreements? Huh

For the reasons you've outlined yourself. These are market distortions which seek to alter the productivity / output dynamic. Collective agreements usually have productivity clauses in them otherwise they too are market distortions. don't fret too much about them though. There are plenty of other distortionary aspects in our supposedly free markets.

What I've said about wages and productivity is largely true. If it were not for productivity growth, the same real wages of 100 years ago would apply today. Whether the distortions are acceptable or not is only a matter of public policy and the acceptance of their consequences.

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Very funny Scotty, now beam down my clothes.

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crocodile

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Re: Problem With The Minimum Wage - Its Too Low
Reply #29 - Feb 4^th, 2015 at 2:44pm

Bam wrote on Feb 4^th, 2015 at 1:25pm:

Andrei.Hicks wrote on Feb 4^th, 2015 at 12:07pm:

You don't get to decide if the "wealthy" take pay cuts.

We live in a globalised capitalist market.
The market is always right. Sometimes I may not like it, sometimes you may not but the market has the answer.

When you go for 5 different jobs how come the salary is always within a 5% range of each other?
Because the market rate is your worth to the system.

I know exactly how much I can offer say a Financial Accountant but yet I know for a decent a Finance Manager I need 150k plus.
The market rate has decided that, not me.

You don't have some all seeing omnipotent being saying raise or cut the wealthy.
There is no such thing.

CEOs are answerable to the market and to it's shareholders.
But if the market decides he is worth $3m per year. Then that's what he's worth!

Rubbish - if the "capitalist market" was really global, you would be out of a job, or forced to compete for pay with someone from Poland who could do your job just as well for 20% of the pay.

You're also forgetting about relative productivity between economies. The more productive ones pay a higher cost of labour input for increased output. When productivity stops growing, jobs are shed to lower wage jurisdictions. That's what is happening now. Total factor productivity has been on the slippery slope here for over one and a half decades. It catches up and bites you on the arse some day.

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Very funny Scotty, now beam down my clothes.

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