ACTU lashes RBA wage-inflation hypocrisy

Earlier today I lashed Reserve Bank Governor Phil Lowe for demanding wage suppression to tame inflation while Australian businesses are busy charging higher prices and earning record profits:

Share of total factor income

Secretary of the Australian Council of Trade Unions (ACTU), Sally McManus, has launched a similarly scathing attack on Twitter, asking why economists and Phil Lowe haven’t called for a “cap on profits” to curb inflation:

Sally McManus Tweet

Well done Sally McManus. The propaganda and scaremongering coming out of Phil Lowe, the business lobby, and Australia’s captured business media is appalling.

The Albanese Government must not fall for their lies and deception surrounding wages and inflation.

Unconventional Economist

Comments

  1. Oh man , man on 1 million pay calls for the lowest wage earners to sacrifice for his poor performance in not doing his job properly (maintain inflation within target band – he lietrally had one job).
    That landed well.

  2. pfh007.comMEMBER

    Looking forward to the demands for a cap on asset prices.

    Much easier to achieve than a cap on profits.

    And all we have to do is

    1. Regulate unproductive bank credit. Big loans secured by existing assets.

    2. Increase interest rates to deter unproductive speculation.

    Crunching unproductive bank credit is deflationary and that will allow an increase in award wages.

    But why go after wealth Ponzi bludgers when you wave a stick at business who at least produce something.

  3. Stephen Morris

    The 20th Century was an anomaly.

    http://piketty.pse.ens.fr/files/capital21c/en/pdf/F12.4.pdf

    Far from being “The End of History” the 20th Century may have been nothing but an aberration caused by the industrial economy which increased workers’ bargaining power. Such anomalies have occurred before. The Peasants’ Revolts of 14th Century Europe arose from a similar change in bargaining power due to acute labour shortages caused by the Black Death. Real wages for unskilled workers in England almost doubled between 1350 and 1450[1] . By 1590 real wages for unskilled workers in England were back where they had been in 1350. It took 240 years, but real unskilled wages did eventually regress to the mean. The 1450 peak in unskilled wages wasn’t surpassed again until 1860, and then only because the new conditions of the Industrial Revolution had once again tilted the balance in favour of workers.

    Far from ushering in a Golden Era of plenty for all, perhaps the services economy – and now the information economy – is merely taking us back to the type of feudal society which existed before the market economy.

    And don’t expect governments to help. Governments are run by politicians. Their main aim is to ensure they have a seat in the lifeboat.

    – – –

    [1] Gregory Clark, The Condition of the Working-Class in England, 1209-2003, Table 4. http://www.econ.ucdavis.edu/faculty/gclark/papers/wage%20-%20jpe%20-2004.pdf

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