Following the recent discussion here of critics of US foreign policy being labelled as anti-American, I saw a snippet in the Fin (subscription required) in which the Wall Street Journal (also subscription required) applied the same epithet to anyone critical of US labour market institutions and their outcomes, even extending this to former PM Bob Hawke, about as prominent a supporter of the US alliance as you could find, though, like many others, a critic of the Iraq war. The relevant quote
Even Labor leaders who have previously been strong supporters of the alliance have not hesitated to stir anti-US prejudices this time. Former Prime Minister Bob Hawke warned that making it easier for workers to negotiate wages directly either their employers would be “a move down the path to” horror of horrors “an Americanisation of labour relations
Unfortunately, my efforts to find the full piece have been unsuccessful – I assume it’s behind the paywall somewhere. I’d appreciate it it anyone could supply the full text.
I’d be interested to know, for example, whether the WSJ has extended its net to catch that notorious anti-American, John Howard, who has warned against taking the “American path” in relation to gun laws and tort litigation.
In the meantime, let me offer the hypothesis that lots of American workers share the “anti-American prejudice” that they would rather have a union on their side than enjoy the benefits of direct “negotiation” with employers. For example, this Gallup Poll reports that 38 per cent of Americans would like to see unions have more influence, as against 30 per cent who would prefer less. And I’ll guess that the WSJ itself would be happy enough to endorse Howard’s anti-Americanism, at least as far as tort law is concerned.
Update Thanks to several readers, the full column is over the fold
Australia’s Labor Reforms
November 22, 2005
From the death of that most cherished of Australian traditions — the weekend barbeque — to couples divorcing and a rise in the homicide rate, no scare story is too far-fetched for die-hard opponents of labor reform down under.
Trade unions brought hundreds of thousands onto the streets of major Australian cities last week in the biggest protests the country has seen in seven years. And their Labor Party backers were quick to warn of all manner of dire consequences if Prime Minister John Howard succeeds in reforming Australia’s outdated labor laws.
Never far below the surface, the anti-Americanism of Sydney’s left — still furious at Mr. Howard’s resolute support over Iraq — is back with a vengeance in this latest battle. Even Labor leaders who had previously been strong supporters of the alliance have not hesitated to stir anti-U.S. prejudices this time. Former Prime Minister Bob Hawke warned that making it easier for workers to negotiate wages directly with their employers would be a “move down the path to” — horror of horror — “an Americanization of labor relations.”
Such rhetoric belies the modest nature of the Howard government’s proposals. Even if its Work Choices Bill is enacted, all Australian workers will continue to enjoy generous labor protection — including an A$12.75 (US$9.30) minimum hourly wage, four weeks annual holiday, and a year’s unpaid leave for new parents.
What will change is a belated recognition that labor union protections, aside from infringing on human liberties, are obsolete in today’s Australia. Two decades of economic reform (much of it initiated under Mr. Hawke’s leadership) has produced a entrepreneurial economy where one in ten are self-employed and union membership has fallen to less than a quarter of the workforce.
You wouldn’t know that from Australia’s labor laws, which still ban employers from negotiating directly with their employees, unless they match the wages and conditions set by state-run arbitration bodies for workers in that industry across Australia as a whole. Remove that restriction, as the Howard government is finally proposing to do, and you remove one of the main reasons stopping union membership from plummeting even faster. Other reforms would further reduce union power by insisting that strike votes or other industrial action require secret ballots, and simplifying the maze of more than 100 laws currently governing industrial relations.
Hence the scare stories, and the ferocity of the counter-offensive by the union movement and its Labor allies. They represent an Australia of old battling for its political survival. Having already been dealt a blow by Mr. Howard’s reelection with an increased majority last year, and a swing in his favor among the blue-collar workers who were once Labor’s staunchest supporters, they know how much is at stake.
For all last week’s street protests, the chances are they will fail again. The Howard government’s parliamentary majority all but ensures the bill will be enacted. And modern Australia has shown through its voting habits, and changing employment patterns, an understanding of how true job security comes not through restrictive labor laws, but from a flexible labor market that helps fuel continued economic growth.
Devastating though it may prove to union membership, the bill is only a first step in this direction. As Mr. Howard said recently, “In a year’s time, people will look back and say why on earth did people try and exaggerate and scare us.”
John Quiggin 
Oh Ernestine, I see another “dream” is about to be discarded for you – the dream that your objection to my parody of you somehow matters. You asked for it.
Avaroo, have a cold shower.
Don’t be a sourpuss, Ernestine.
” Do you, Avaroo, consider it a problem that there are 12% of the population living under the proverty line in the US, as reported in the CIA statistics on the U.S. economy in the year 2005, which I posted?”
How do they define the poverty line, then? In many countries, the poorest 10% is defined as the poverty line. Even if the Average wage is 10 billion dollars a year, there will still be 10% of people who are the poorest, even if they are all living in mansions of gold.
This is the way it’s defined in Australia. It’s incredibly hard to stop people being poor when the definition keeps changing.
avaroo Says:
November 28th, 2005 at 8:05 pm
It really is a shame that like Ernestine outside the US, millions of people who arrive in the US have had to discard the “dream� of upward mobility. Wave after wave of immigrants remain where they started in the US, the Irish, the Italians, the Jews, the chinese, the blacks, all at the very bottom rungs of American society while white Americans of English extraction continue to reap alone all the bennies of American life. (Don’t tell Oprah please, I adore her, she’d be crushed!)
Yes, it was all a cruel hoax, intended to lure millions of people from around he globe here with the promise of a better life. You can see these sad victims lining up to depart the US, dejected and broke, still searching for that land of opportunity. They’ll go back where they came from, poorer yet wiser, until the world awakens to this scam Americans have been perpetrating on people for generations.
In a lot of cases this is not parody, its reality. Ask any one of the thousands of Mexicans who cross the border, work at companies like Walmart for less than the minimum wage and then go back to Mexico. Their numbers have become so great that some politicians now want to grant these illegal immigrants the right to public schooling in the USA and to get a US drivers licence.
1. Avaroo has used my name in his spin without my consent. I did object and I object now.
2. Yobbo’s post on the Australian poverty line is inaccurate. Information on the Australian (Henderson) poverty line is on
http://www.melbourneinstitute.com/miesi/poverty.html
Paul, have you somehow missed the millions of Mexicans living in the US?
Wal-Mart pays Mexicans less that minimum wage? Can you prove that?
avaroo Says:
November 29th, 2005 at 8:19 am
Paul, have you somehow missed the millions of Mexicans living in the US?
Wal-Mart pays Mexicans less that minimum wage? Can you prove that?
Avaroo, have you somehow missed the fact that a lot of them are illegal immigrants?
Here are 2 links, 1 a union site and the other a government report, I refer you to the undocumented workers
http://edworkforce.house.gov/democrats/releases/rel21604.html
http://www.aflcio.org/corporatewatch/walmart/walmart_7.cfm
Avaroo says that the US is an “opportunity society”. I am skeptical of the implied claim that social mobility upwards in the US exceeds the upwards mobility found elsewhere. Can Avaroo substantiate that claim? Evidence in Corak (2004) indicates that the adult income of children in the US, UK and France is more (not less) closely related to that of their fathers than in a number of other countries. Corak states: “The rich countries in fact differ significantly in the degree of earnings mobility between fathers and sons. The United Kingdom, the United States, and to a slightly lesser extent France, are the least mobile countries with 40 to 50% of the earnings advantage high income young adults have over their low income counterparts being associated with the fact that they were the children of higher earning parents. In none of the OECD countries under study is this relationship entirely eliminated, falling to as low as 15% in Denmark and about 20% in Canada, Finland, and Norway”.
The paper is at http://www.iza.org/en/papers/Corak280904.pdf
On straightforward inequality, Prof. Quiggin summed up the situation for the US poor in his post of June 1 2005 “IR Reform and Inequality”, in which he said: “Low-income families have experienced almost no income growth since 1970. Wages for workers with high-school education or less have actually fallen…”
Here’s some information on the working poor and homelessness in the US
Click to access ehrenreichtranscript.pdf
(Page 3 in particular)
Click to access Whois.pdf
Scroll down to “Employment” and “Resources” headings.
Some more info on what a great employer Walmart is, the bottom 2 sites are worth reading.
http://www.boston.com/business/articles/2004/09/04/wal_mart_may_settle_immigration_case/
http://seattletimes.nwsource.com/html/opinion/2001859432_floyd18.html
http://www.alternet.org/story/17761/
http://www.businessweek.com/bwdaily/dnflash/jan2004/nf20040128_6990_db014.htm
Walmarts child labour law violations
http://www.kait8.com/Global/story.asp?S=1599328&nav=0jshKAiA
And an interesting article on Walmarts “dead peasant” practices
http://www.workdayminnesota.org/view_article.php?id=4fcadcacaed04b00c3addfd78860641b
I think that social and cultural expectations have a very big effect on how socially mobile kids are with respect to parentals. At a guess I would say that most kids use their parents as primary reference sources and reflect their parents work ethic, self efficacy etc. As such government economic policy may not be the determinent factor.
One area that I have observed considerable mirroring of values between parents and kids is in the persuit of an academic life versus a corporate/business life. To be sure many people span both however I have seen whole families where the kids gain multiple degrees but earn average income and other families where the kids get few qualifications but earn bucket loads. My other half has an undergraduate degree, a master degree and is now finalising a PHD in a third area. I feel supportive but I am personally unmotivated by such symbols. Both her parents have masters degrees while my dad was a self employed tradesman and my mother as an OT in mental health.
The formative years matter lots but who wants governments brainwashing our kids?
Degree or no degree, I agree that parental homes are important because how would children learn how to think straight when they are exposed to insincere ‘word smithery’, not necessarily from governments.
I think that any liberal society is founded on the strengths of individuals. However individuals are nutured in families and communities so I think we agree. Families and the extent to which their behaviour is functional behaviour matter a great degree.
I also agree that there are negative influences other than government that ideally kids should be sheltered from. Unfortunately some kids will have families that are of themselves a negative influence.
Personally I think that kids should be exposed to the fact that there are multiple adult worldviews. And that their parents don’t have any monopoly on ideas. In the formative years it is parents that determine if kids get this exposure.
Ernestine, from your own provided link: “The updated Poverty Lines take into account changes in the average income level of all Australians, reflecting the idea that poverty is relative.”
So in other words I was completely accurate. As long as poverty is defined to mean “relative poverty”, it can never be eradicted, short of a North Korea – style solution.
Lengthy selection of Republican talking points and quotations from former US Senator John Glenn deleted. If you want to promote this kind of chain letter material, do it with a link.
>So in other words I was completely accurate. As long as poverty is defined to mean “relative poverty�, it can never be eradicted, short of a North Korea – style solution.
If the poverty line were defined as, let’s say the average income of the poorest 10% of the population, you would be correct.
In fact, the poverty line is defined as a percentage of average weekly earnings. If fewer people earn below that percentage the poverty rate will decline. this is why different countries have different poverty rates.
Yobbo,
Quote: “Ernestine, from your own provided link: “The updated Poverty Lines take into account changes in the average income level of all Australians, reflecting the idea that poverty is relative.â€?
So in other words I was completely accurate. As long as poverty is defined to mean “relative povertyâ€?, it can never be eradicted, short of a North Korea – style solution.”
Response:
1. I don’t know what you mean by North Korean style so I ignore that.
2. No, your earlier post is not accurate. The quote you are giving does not solve this problem.
3. The quote you have given is not misleading to me but I can see that if you don’t read the rest of the article on the link I have provided then you reach the strange conclusions in your earlier post, which you are trying to substantiate by means of the selective quote.
4. The link I have posted is : http://www.melbourneinstitute.com/miesi/poverty.html.
5. If it is any consulation, newspapers sometimes contain similar none-sense as that contained in your earlier post and the current one.
6. If you wish to gain clarity on the Australian poverty line, then there is only one way to do it. You work through the definitions and the algebra yourself and you read up on the calculation of statistics which enter the calculation.
You can also look up a post by Dogz on this blog-site (I don’t remember the topic) to get a feel for what people who understand what they are talking about come up with as the income (wages and transfer payments) required for an Australian family in metropolitan areas to live a reasonably modest life. Compare Dogz’ estimate to the data on the site I have listed and you may get an idea that there is something not quite right with your method of reaching conclusions.
Helen’s posts may be helpful too. If this is not enough you may wish to hire a consultant.
Hope this helps.
Ernestine,
Yobbo was not ‘completely accurate’, but he was correct in a general sense – if all Australians were living in golden houses, but most had 20 bedrooms and some only 5, the ones with only 5 bedrooms would be counted, under that system, as being in poverty. The fact that they all had enough to eat and lead rich, fulfilling lives would be irrelevant. I am not saying this is the case, but as soon as you use a relative measure that is what you get.
I would hazard a guess that there are not many Australians living in the sort of poverty that is common in sub-saharan Africa or in parts of South America – or, for that matter, North Korea.
Andrew,
Re your message of 29 November, 6:31 pm
I’ve come across a similar confusion of relative wealth categories, as described in your post, versus the income (wages + transfer payments) required to purchase a predetermined modest bundle of goods and services in the market. I seem to recall the speech was given to a Think Tank. The amount of confusion that can be generated by words is, IMHO, mind-boggling.
The concept of the Henderson Poverty Line is well defined and documented and so are the methods used to approximate changes in the Poverty Line at regular time intervals. The bundle of goods and services is assessed from time to time by one commission or another.
It is not true that the bundle of goods and services would automatically be adjusted as is suggested in your artificial example.
In market economies resources are allocated by relative prices. Thus, relativities cannot be avoided. People live in local economies. Hence the local goods and services and local relative prices enter the calculation of the local Poverty Line. Surely, it would be rather silly to determine a Poverty Line for Australia, using the relative prices in, say Outer Mongolia without including the cost of airfares and whatever is required to move the people (and the income) from Australia to Outer Mongolia.
Paul,
“Avaroo, have you somehow missed the fact that a lot of them are illegal immigrants?”
but you claimed they were leaving the US. How can they be illegal immigrants if they have left the US?
Can you document your claim that Wal-Mart is paying anyone less than minimum wage?
gordon,
Comparing the US to other countries is difficult, particularly certain aspects of it. (I know this is unpopular in some circles but it’s nevertheless true) For example, you compare the US to Finland on the issue of social mobility. But Finland doesn’t have the cultural diversity of the US, it doesn’t have immigration anywhere near the US in terms of either numbers or diversity.
When I refer to an “opportunity society”, I’m talking about the relative ease with which the US absorbs people, and all different kinds of people, from around the world, many of whom come here with not a thing. Finland doesn’t have hundreds of thousands of people arriving every year with basically nothing. If you look at France, another of your examples, most of its immigration comes from one global area, North Africa and the Middle East. There’s no substantial Chinese or east asian immigration, hispanic and/or latino immigration, African immigration other than North Africa, south american immigration, caribbean immigration, eastern european immigration (with the possible exception of Poland), Indian immigration.
Looking at how a father and son’s income match up, you’d have to take into consideration that millions of people in the US don’t have fathers living in the US, they are back in India, China, Pakistan, Honduras, etc. That doesn’t hold true for Finland.
“As long as poverty is defined to mean “relative povertyâ€?, it can never be eradicted”
point well taken yobbo. Comparing people who live in poverty in one nation where those people don’t have enough food or any shelter at all, to people living in poverty who own 2 cars, cell phones and eat MORE than enough for 2 people is silly
avaroo Says:
November 30th, 2005 at 2:30 am
Paul,
“Avaroo, have you somehow missed the fact that a lot of them are illegal immigrants?�
but you claimed they were leaving the US. How can they be illegal immigrants if they have left the US?
Can you document your claim that Wal-Mart is paying anyone less than minimum wage?
Last time I checked, you needed a visa for legal entry to a country, they are only leaving the country to take the money back to their family, you obviously either dont live in the USa or you dont read the newspapers very much Avaroo.
Paul, you are very confused. Mexicans don’t “take the money back to their family” physically. It would be much too difficult to continuously sneak into the US and sneak back out. Now, they do SEND money back to their families, perhaps that’s what you meant to say. Whole businesses are focused on funnelling money back to Mexico specifically. But going back and forth, carrying wads of cash? No. One of the suggestions to control immigration in the US is to slap a very high tax, like 50%, on such money being sent back (legally too) to prevent people from coming here and that’s BECAUSE they don’t physically take the money back home, they send it.
It appears you cannot document your claim that Wal-Mart is paying illegal immigrants less than minimum wage. Perhaps it’s just another one of your odd ideas about the US.
Avaroo (and others) may also be interested in the 2005 study “Intergenerational Mobility in Europe and North America” by Blanden, Gregg and Machin. They state: “Thus the picture that emerges is that Northern Europe and Canada are particularly mobile and that Britain and the US have the lowest intergenerational mobility across the European and North American countries studied here. The USA is seen by some as a place with particularly high social mobility. In part this is a consequence of using measures of class to estimate mobility (these will be affected by
changes in the class structure over time). However, the idea of the US as ‘the land of opportunity’ persists; and clearly seems misplaced”.
The paper is at: file://F:Environomicsinequalitycee.lse.ac.ukcee dpsCEEDP26.pdf
Game, set and match?
Sorry, the reference to Blanden, Gregg and Machin (2005) should be:
Click to access CEEDP26.pdf
I’ve already responded to your post, gordon. Nothern Europe just isn’t comparable to the US, for the reasons I’ve listed.
Thanks for the reference by Blanden, Gregg and Machin.
Avaroo, as it seems you have an aversion to clicking on the links I provided, here is an excert from one of them,
Undocumented workers have been exploited at Wal-Mart. On Oct. 23, 2003, federal agents raided 61 Wal-Mart stores in 21 states and arrested 245 nightshift janitors who were undocumented workers employed by cleaning contractors. In an Oct. 25, 2003, New York Times story, one undocumented janitor said he had worked every night except Christmas and New Year’s Eve for 16 months and made approximately $6.25 an hour with no benefits. Following the October raids, nine Mexican immigrants who worked as janitors in New Jersey sued Wal-Mart alleging that it, as well as the contractors, failed to pay overtime, withhold taxes and make required workers’ compensation contributions. No federal charges were filed against Wal-Mart, but the company agreed to pay $11 million to settle claims stemming from the federal investigation. The settlement, announced March 18, 2005, also calls for $4 million in criminal forfeitures by 12 firms the retail giant hired to provide janitorial services.
I didn’t say all Mexicans take the money physically back, obviously the majority send it back. But it is also true that the ones who are caught, frequently may their way back accross the border to try again and it becomes an endless cycle.
As far as the 50% tax on money going back, that is a new one to me, where did that originate? I have heard proposals for the illegal immigrants to get US drivers licences and public education among other things.
I wonder where I get my “odd ideas” about the US from? I have only been living in the US for 6 years.
When it is pointed out to Avaroo that the US “opportunity society” doesn’t actually provide as much opportunity as some other places, Avaroo observes that there are few Mexicans in Finland. Maybe if the US imported less cheap labour from south of the border its social mobility outcomes would look better, but causes and cures are another issue. The fact seem to be that the Gringos’ “opportunity society” is a bit of a myth.
Paul, Nothing you’ve shown indicates that Wal-Mart has paid anyone less than minimum wage.
You actually DID say they take it back and the vast majority do not. They send it.
So far, not a thing you’ve said has been backed up by any proof at all.
gordon,
You posted a link to a report on the UK. I was talking about the US, not the UK.
I understand that it irritates some people to hear the US described as an opportunity society.
Clearly nothing short of having a Mexican knock on your door and show you his pay packet is going to convince you Avaroo, you have a bad case of tunnel vision. Yes, I did say “they” I did not say “all” if you read my lasy post and are able to comprehend it, you would have read this,
I didn’t say all Mexicans take the money physically back, obviously the majority send it back. But it is also true that the ones who are caught, frequently may their way back accross the border to try again and it becomes an endless cycle.
I have provided the proof, you just prefer to keep your head in the ground and not read it. Here is more, perhaps you will read this, 1 from the USA and 1 about Walmart in China
Wal-Mart was recently ordered by courts to pay up to 120 workers in Gallup, New Mexico and 400 workers in 27 stores in Oregon for violating wage and hour laws.
NLC interviewed workers in China’s Guangdong Province who toil in factories making popular action figures, dolls and other toys sold at Wal-Mart. In “Toys of Misery,” a shocking 58-page report that the establishment media ignored, NLC describes: 13- to 16-hour days molding, assembling, and spray-painting toys–8 a.m. to 9 p.m. or even midnight, seven days a week, with 20-hour shifts in peak season.
Even though China’s minimum wage is 31 cents an hour–which doesn’t begin to cover a person’s basic subsistence-level needs–these production workers are paid 13 cents an hour.
Paul, you made a claim and so far you can’t back up. Face it.
If you can show that the Gallup NM and 27 stores in Oregon suits were for paying less than minimum wage, which was what you claimed, let’s see it. Violation of wage and hour laws are solely about paying less than minimum wage.
You’re blowing a lot of smoke, probably to distance yourself from your original claim.
Actually, “violation of wage and hour laws are NOT solely about paying less than minimum wage” is what the 2nd sentence in the 2nd paragraph above should have read.
Now I cant make it any simpler than this, at least prove to me that you can actually read. Do correct me if I am wrong but unpaid overtime is less than the minimum wage by my calculation. Again I include a link previously provided which includes the following.
Off-the-clock work. By December of 2002, 39 class action lawsuits, involving hundreds of thousands of plaintiffs, charged Wal-Mart with withholding earned wages, either by deleting hours from time sheets or forcing workers to work unpaid overtime hours.
http://edworkforce.house.gov/democrats/releases/rel21604.html
Paul, what you said is that Wal-Mart pays some people less than minimum wage. Do you have ANY proof that Wal-Mart has paid ANYONE less than minimum wage? You’ll need two numbers to prove this 1) the actual minimum wage figure, which I doubt you even know and 2) the wage Wal-Mart was caught paying.
You’ve also never proven that my parody of Ernestine is false. Where was it you thought all the people are lined up to leave the US having failed to find any opportunity here?
Avaroo,
I have never agreed to you using my name on this blog site for your spin, which you, quite wrongly, call a parody. Another word for a spin is obfuscation.
I object to your spin and I have told you this.
I have asked you to unravell your game of obfuscation, step by step. When you do this, you provide the prove that counts.
There arn’t many steps involved in the unravelling. I had hoped you can do it all on your own. But you can’t. Prove me wrong.
Ernestine, you appear to be asking for more.
Avaroo,
o.k., I understand that you are unable to unravell the spin you created.
I’m working on another parody for you.
Avaroo, I object to integrating my name into your spins, which you call parody.
As for your spin:
On 28/11/05, 8:05 Avaroo wrote: “It really is a shame that like Ernestine outside the US, millions of people who arrive in the US have had to discard the “dream” of upward mobility….”
You write as if you have knowledge that I, Ernestine, have a “dream” of upward mobility in the US and that I had to discard it. You don’t have this information. You made it up.
avaroo,
There is no inconsistency in all these things being true-
The US provides plenty of opportunities for immigrants from poor countries to obtain employment they would otherwise not have in their country of origin.
US employers ‘enjoy’ large illegal as well as legal immigration (together numbering some two millions a year in some estimates) as a means of ensuring that labour market pressures at the bottom of the labour market are constantly ‘eased’ by new and essentially unorganisable immigrants
Large sectors of the US economy, including in ‘domestic’ services (retail, cleaning and the like) have experienced virtual zero productivity growth over the last twenty years, together with stagnant wages due to factors outlined above.
The US provides a huge array of ‘market’ options in goods and services, and at the high end, in education and health for example, are able to deliver the best in the world. It is also true that access to high quality education and health care in the US is skewed in ways not experienced by other advanced, prosperous and democratic countries.
It is misleading, not to say mischievous, to claim that those who are critical of the recent growth in income inequality in the US, favour absolute income equality. It would be like claiming that those who favour growing the cake without caring about its distribution, favour economic and social arrangements akin to Brazil for example.
The federal US minimum wage is currently $5.15 per hour. It has not changed for 9 years. It is lower in real terms now, than its equivalent in 1973. Care to comment?
* The federal US minimum wage is currently $5.15 per hour. It has not changed for 9 years. It is lower in real terms now, than its equivalent in 1973. Care to comment?
Clinton essentially moved responsibility for minimum wages to the juristicition of the individual states. The $5.15 rate is the federal minimum but many states set a higher minimum. Personally I think that no US government should ever increase the federal minimum and it should instead be determined by state parliaments.
The individual states in the US are democracies. I am sure they can debate it adequately.
In San Francisco the minimum wage is US$8.62 which is about the same as Australias minimum wage.
I think that in parts of Australia with a high unemployment rate there is a good case for local reductions in the minimum wage to encourage job creation. I think that like Clinton did in the USA we should look to decentralise the setting of minimum wages.
A full list:-
http://en.wikipedia.org/wiki/List_of_U.S._state_minimum_wages
Terje Peterson writes:-
“I think that in parts of Australia with a high unemployment rate there is a good case for local reductions in the minimum wage to encourage job creation. I think that like Clinton did in the USA we should look to decentralise the setting of minimum wages.”
You have not replied to the rest of my post. The problem with relying on lower pay rates in order to create jobs, is that the jobs created are precisely the kinds of jobs that will compete endlessly on the basis of the price of labour. This is a self defeating and ultimately dead end way of raising general standards. I agree that in some cisrcumstances high real wages can be a bar to entry into the labour market, however there are other solutions to this than simply cutting wages. I repeat, we are in danger here and in the US and in the UK for that matter, of creating whole industries that are ‘addicted’ to low wage/low end low productivity wage labour. As a way of keeping the indigent off the streets they work (in a fashion)-as a way of building a high skill, high productivity economy that enables high growth together with high levels of well being, both social and economic, they leave a lot to be desired. It is all too easy to cut (somebody elses) wages. Any fool can do that. The trick is to build an economy that encourages high wages and high productivity that is able to be spread across the polity. That takes a little more thought and a little more work. That is why Costello and Howard find it too hard. And note-I am not arguing that every-ones wages should be the same, nor that there should not be entry level jobs. I and everyone else I suspect have perfromed those jobs. The point is, unless they do indeed lead to something better they are a trap, not a way up and out. And the trap exists for indsustries and nations, not just individuals.
Oh, Avaroo, you old teaser, you’re just trying to get me angry, aren’t you? How could I ever be angry with a sweetheart like you? I know references from those nasty foreign websites are hard for you, but you’re a TRIER, aren’t you, and you’ll do fine in the Land of the Fatherless and the Home of the Desperate. Wal-Mart’s hirin’, baby; step right up!