High Wage Rate a Problem for Australia

The overseas economic crisis is changing the perception of wage rates in Australia. Over recent months the Aussie dollar has fallen in value.  It helps exporters. The retail sector has also been calling for the dollar to be intentionally weakened. This is odd considering Australian consumers are heavily "addicted' to imports, so prices will probably rise in the shops.

There will be an election in September. Any color of government will have to cut back on spending. This will mean higher unemployment. Therefore, despite inflation steadily rising there will be downward pressure on wages. There is already a glut of people seeking employment in the vegetable and fruit picking industry.

When you go shopping a distinct feel of recession is in the air. With many buying online, the shops are almost devoid of shoppers. The lowest income earners have just been given a 2.6 per cent pay rise. This was done to redistribute income. Higher unemployment will prevent future artificial tinkering with the economy.

Australian wages are already too high when compared internationally. We have the highest rates of any developed country. The minimum wage is more than twice that of the US. Within Australia things have been much worse. The minimum wage today is 44 per cent of average full-time earnings. This compares to 50 per cent a decade ago. However, it is still very high.

It has been claimed that letting wages fall and redistributing wealth via welfare payments is a better idea. This of course depends on whether government can collect enough in taxes to have the money to do this. Even this though has been "damned" by some saying welfare reduces the drive to find work.
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Australian Blog