Wow, from Greg Jericho today, cheerleader of the Fake Left:
It is the issue that has workers wondering: “Am I ever going to get another pay rise, and why is it so much harder to get one than it used to be?”
And in truth these are questions that have no easy answers – it is a mix of international and local factors, it is the product of coincidences in the economy that are happening right now and a consequence of policy over the past 30 years.
The Turnbull government and Bill Shorten’s opposition are coming at the problem from different standpoints, proffering different solutions. With voters fatigued by the circus out of Canberra, and looking to their leaders for answers on the policy debates that matter – this will be the issue on which the next federal election turns.
…because there has also been a shift towards more part-time employment over the past four years, which invariably pays less than full-time work, combined with low wage growth, the average real earnings of Australian workers has actually fallen in the past four years.
Among the solutions the treasurer proffered was improved productivity. And yet here again we find ourselves grasping for a solution using old relationships than no longer are as close as they once were.
Wages have long been linked with productivity. In essence productivity growth means workers are producing more in the same amount of time, and as a result they should be rewarded for such improvements.
…Last year the IMF wrote a report called the “Disconnect between Unemployment and Wages”, which noted that while partly it is all just a cyclical issue due to the global economy still recovering from the GFC, there are two big structural shifts: robots and globalisation.
The issue of robots, or automation, is one that is probably more in the minds of workers than in actuality. But it is enough of an issue that workers are factoring it into their wage demands – the fear that you could be replaced by a robot is causing workers around the world not to ask for too big of a wage rise even if that fear is not yet likely to be realised.
But the other fear of workers around the globe is other workers around the globe. The IMF noted “sizeable common global factors” are behind the slowdown in wage growth. That is, weak wages growth in one country is having a spill-over effect in other countries, notably trading partners as workers feel the pressure of losing their job to a worker overseas.
In the entire article there is not one mention of the terms of trade nor immigration. The truth is that all of the factors behind weak wages mentioned by Jericho are likely at work. But the key is that because national income has been falling post-mining boom (with further to go) somebody has to wear the pain to improve competitiveness to offset the falls. So far that pain has been visited largely upon workers instead of capital largely owing to one simple policy tool: mass immigration.
By flooding an oversupplied labour market with cheap foreign inputs government has done two things:
- supported capital by increasing asset prices and aggregate demand, and
- reduced wages and individual living standards.
Jericho is deliberately eliminating this context, as he said he would the other day:
Immigration – because there are many desperate to hate – must be treated with extreme care by politicians and journalists, and certainly with more care than Abbott seems capable. The inherently racist parties will seek to use any discussion and any seeming evidence of the negative impact of migrants as fuel to burn their fires of hate.
You’re a disgraceful propagandist, Jericho, screwing workers as you pretend to care.
