The state of the economy at the street level

[Smurf1976]

The problem is not the gap between the top and the bottom!!!

The problem is that a low income Aussie believes they are on the bottom, when they are actually in the top 10%.

How does someone earning $25 an hour as a casual spend on cars, housing and all the other stuff which keeps the economy going?

The thread's about the state of the economy not how to make China wealthy.

 

[Value Collector]

How does someone earning $25 an hour as a casual spend on cars, housing and all the other stuff which keeps the economy going?

The thread's about the state of the economy not how to make China wealthy.

The thread title doesn’t state “Australian economy” or “Queensland’s economy”or “west townsville economy” etc etc.

It just says economy, so to me that’s the global economy, because I don’t really see a differences between a guy losing his job in Sydney to a guy losing his job in Los Angles, London, Shanghai or Bangladesh.

As long as the entire global economy is heading in the right direction, individual countries can fluctuate and I don’t care.

If the Aussie economy was doing fantastic, but on average the world was going backwards, I would see that as a Loss not a win.

 

[Smurf1976]

The whole premise in Australia, is that wealth is totally dependent on owning a house and currently is measured by the ability to own a house in either Sydney or Melbourne.

A big part of the issue there is that renting in Australia is rather crap compared to other places. Lots of restrictions, substandard accommodation and a lack of security for the tenant being the big issue there hence most want to buy. Obviously there are good landlords but there's plenty of shockers.

Regardless of the details however, it remains the case that we're going backwards if someone doing a basic job could buy a house, car and whatever 50 years ago but someone in the same situation can't do the same today.

That so many have housing, utilities and so on taking such a huge chunk of their income, and their income itself is casual not a permanent thing, explains the reluctance or outright inability to spend on non-essentials which is now impacting the economy.

 

[Smurf1976]

The thread title doesn’t state “Australian economy” or “Queensland’s economy”or “west townsville economy” etc etc.

It just says economy, so to me that’s the global economy, because I don’t really see a differences between a guy losing his job in Sydney to a guy losing his job in Los Angles, London, Shanghai or Bangladesh.

True but it's "at the street level" so I'm making an assumption that on an Australian forum most contributors will be spending more time "on the street" in Australia than in some other country. Hence my assumption that we're talking about the Australian economy unless stated otherwise.

It's a fair point though, it's not specifically stated.

To clarify, my comments are in relation to Australia as a whole and not to any particular town or state unless specified otherwise.

 

[sptrawler]

A big part of the issue there is that renting in Australia is rather crap compared to other places. Lots of restrictions, substandard accommodation and a lack of security for the tenant being the big issue there hence most want to buy. Obviously there are good landlords but there's plenty of shockers.

Regardless of the details however, it remains the case that we're going backwards if someone doing a basic job could buy a house, car and whatever 50 years ago but someone in the same situation can't do the same today.

That so many have housing, utilities and so on taking such a huge chunk of their income, and their income itself is casual not a permanent thing, explains the reluctance or outright inability to spend on non-essentials which is now impacting the economy.

I know what you are saying, but I will give you an example of something that has happened near my place.
An elderly lady passed away and here 2 bed unit, in a small complex, went on the market.
A single mum probably around 30 yrs old bought it, I asked her where she works, apparently in a bread shop. So I asked how she managed to buy the place, she said with a small deposit and the payments are $50 a week less than where she was renting.
The unit is one street off the waterfront in Mandurah, 60k's South of Perth.
I know not everyone wants to move, to where housing is affordable, but it will never be possible for everyone to live in Melbourne or Sydney.
People want not only a house they want a new house, close to all amenities, in a nice suburb with growth potential. That would be nice, if everyone could get that, but in reality who is going to buy the houses in country towns and do the jobs there?

 

[PZ99]

True but it's "at the street level" so I'm making an assumption that on an Australian forum most contributors will be spending more time "on the street" in Australia than in some other country. Hence my assumption that we're talking about the Australian economy unless stated otherwise.

It's a fair point though, it's not specifically stated.

To clarify, my comments are in relation to Australia as a whole and not to any particular town or state unless specified otherwise.

That's a fair assumption @Smurf1976

When you look at the first post and the first page - it's abundantly clear the thread is about the local economy. There seems little point comparing it with Shanghai or Bangladesh.

As for subsidies; it's worth remembering every time you buy a product you are subsidising that industry and the ancillary jobs that come with it such as parts > sales > local economies.

I'm not sure that subsidising the Korean auto industry is the way to go for Australia.

Then again - on $25 a hour you won't be subsidising anything much - not even the taxman.

 

[Smurf1976]

If you removed housing from the equation, most people have never been better off. Maybe the Government, should look more closely at building social housing, in a joint ownership model.

Agreed but the difficulty is a political one. Lots of people who will stand in the way.

Lots of buyers / renters want a house on a decent size block in the suburbs.

Lots of developers and others who want to build 50 story buildings full of 1 bedroom apartments which are built for investors to maximise profit, they're not built with those living in them in mind.

Lots of existing owners of both developed properties and undeveloped land who will resist any move to bring prices down to more sensible levels.

And so on. Trying to keep everyone happy is holding us back economically in my view. Sometimes, well you just can't do that and someone has to take the hit.

 

[Smurf1976]

I know not everyone wants to move, to where housing is affordable, but it will never be possible for everyone to live in Melbourne or Sydney.

I certainly agree that from a national perspective there's not a lot of logic in having ~40% of the population living in two places given the size of the country.

It didn't used to be that way, it's another example of how we've become very lopsided.

Eg at one point in Australia's history Adelaide was the third largest city by population and Tasmania was the third largest state economy. True in both cases at different times in the past and I'd argue that the whole country would gain from strengthening the economy in places like the NT, Tas, SA etc and for that matter I'd include Perth, as distinct from parts of WA with mining etc, in that too.

I've nothing against Sydney or Melbourne but trying to cram everyone in there doesn't make a lot of sense to me. The US doesn't have such a high concentration of people living in LA and NY. The UK doesn't have everyone living in London. Etc.

 

[sptrawler]

Agreed but the difficulty is a political one. Lots of people who will stand in the way.

Lots of buyers / renters want a house on a decent size block in the suburbs.

Lots of developers and others who want to build 50 story buildings full of 1 bedroom apartments which are built for investors to maximise profit, they're not built with those living in them in mind.

Lots of existing owners of both developed properties and undeveloped land who will resist any move to bring prices down to more sensible levels.

And so on. Trying to keep everyone happy is holding us back economically in my view. Sometimes, well you just can't do that and someone has to take the hit.

Like you say lots of people want a house on a block of land, then you get urban sprawl, everyone wants a lawn and we have to desalinate water to water it.
Also it takes a lot of power to desalinate it, and everyone wants clean power, there is a lot of conflicts and unrealistic expectations in our society ATM.
I think people need to accept, not everyone can have everything they want and those that work hardest and sacrifice are most likely to achieve it.
Nothing much has changed really. IMO
The only thing that has changed a lot, is those who make the most noise, get the media's ear as it is easy reporting.

 

[SirRumpole]

I want to live in a world where we look at other countries the same as we currently look at other states.

Who doesn't ?

It just won't happen.

Everyone looks after themselves, Trump is a prime example.

As long as there are different ideologies in the world, your Nirvana is impossible.

 

[SirRumpole]

Ofcourse Queensland being a state rather than an independent nation doesn’t stop the companies that control production shipping the produce to who ever pays the most.

Governments have the right to enforce a local reservation policy for gas or any other product.

We are the only gas exporter in the world that does not do this.

Your mates in the military were complaining that we have about 50 days oil reserves instead of 90 . Some one should start looking after our interests.

https://www.abc.net.au/news/2018-08-13/australia-still-not-meeting-oil-reserve-obligations/10114906

 

[sptrawler]

Who doesn't ?

It just won't happen.

Everyone looks after themselves, Trump is a prime example.

As long as there are different ideologies in the world, your Nirvana is impossible.

As you say Rumpy, Trump is looking after the U.S and we are wanting to protect our manufacturing, so in reality we are saying exactly what Trump is doing.
It is just we are too small an economy to get any traction.
As people on here have said we should be subsidising our (I mean the U.S's) car industry, so we can at least work for them, and get our pay packet (I mean some of our subsidy money)back.

 

[qldfrog]

Exactly. Subsidizing an industry just means we're not using the most efficient path to an outcome. By removing the subsidy, we immediately become more productive.

Productivity improvements look scary short term, but the longer term move to more productive industries can only be good. This is ultimately responsible for raising living standards across the globe.

True on a global scale but not everyone plays the game, and for the west it means destruction of jobs and wealth while 1.5 billion chineses and a lot of mid tier countries benefits
Good in a global term as long as you are not American European or Australian and used to be employed.
Nice to see even now some people still believe the speech
Now tell that to australian companies selling goods on the internet with lowest parcel postage fee at 9.95aud fighting chineses able to send free postage goods for 1aud
True example based on a canned business idea for 3d printed widgets i had 2y ago
Sure i can try being more efficient, but our welfare system, taxes, multi tier governments are not...
You can NOT have it all

 

[Klogg]

True on a global scale but not everyone plays the game, and for the west it means destruction of jobs and wealth while 1.5 billion chineses and a lot of mid tier countries benefits
Good in a global term as long as you are not American European or Australian and used to be employed.
Nice to see even now some people still believe the speech
Now tell that to australian companies selling goods on the internet with lowest parcel postage fee at 9.95aud fighting chineses able to send free postage goods for 1aud
True example based on a canned business idea for 3d printed widgets i had 2y ago
Sure i can try being more efficient, but our welfare system, taxes, multi tier governments are not...
You can NOT have it all

So some have to find new jobs while everyone else benefits from higher productivity. We get the same output for less and can afford to spend incrementally more on things like welfare.

Just because someone loses a job to their Chinese counterpart, it doesn't make it bad. There's some adjustment to be had in terms of reallocating people to jobs, but it's a win for the Chinese and Australians.

If you take your narrative to it's extreme, we can go to the state level, then suburb and lower. And you can see how clearly absurd it becomes at that point... Eventually we all have to do everything, caveman style.

Trade is good, no matter which way you look at it. Only very few regulations need to be in place, and subsidies for things that don't stack up is not one of them.

 

[Value Collector]

Who doesn't ?

It just won't happen.

Everyone looks after themselves, Trump is a prime example.

As long as there are different ideologies in the world, your Nirvana is impossible.

It’s moving in the right direction, as I said the trend is towards trade and globalism

 

[Klogg]

It’s moving in the right direction, as I said the trend is towards trade and globalism

In line with your post, I would argue that it must happen. If you're not competitive in an industry, the required subsidies will continue to grow until it's just too costly to prop up.

If Australia were producing EVERYTHING it needed, standards of living would drop way too much.

 

[SirRumpole]

It’s moving in the right direction, as I said the trend is towards trade and globalism

If China was a democracy I would be more inclined to agree with you.

As it is, they steal technology which robs other countries of the ability to compete on a level playing ground and a lot of their wealth goes to their military which is not there for the benefit of us.

Whether you have your eyes closed or not, one day they will be a military threat and we will have to deal with that and it won't be easy.

 

[Smurf1976]

If China was a democracy I would be more inclined to agree with you.

Suppose that we both run competing take away outlets.

You can pay your workers $5 an hour, you can pour your used cooking oil straight down the drain and you get all your supplies dirt cheap.

I have to pay my workers $25 an hour, I have to recycle the oil, I'm paying far more for everything from chips to electricity.

We're both selling the same products and since we're competing necessarily neither can charge significantly more than the other.

Not hard to work out who's going to make a fortune and who's going to be out of business.

I'm all for providing assistance to Third World countries and that can certainly include buying their products but (1) China is not in 2019 a Third World country by any reasonable definition and (2) in doing so we shouldn't be wiping out entire industries with no viable replacement activity in our own country.

If someone in Australia has a job which seems to have an ongoing future, has no real concern about the availability of another job even if it did go, has an income that rises a few % each year and which comfortably exceeds necessary living expenses well then sure, they're going to be spending on non-essentials and keeping the economy going.

If however they're legitimately concerned about the prospect of ending up involuntarily unemployed and can barely pay the bills as it is, well then they're not going to be spending on more than the basics and that then kills the broader economy.

There's no denying that Australia is one of the better places in the world to be living and that life for the average person has never been better but there's many who do indeed seem to be going backwards. If a grade 10 education got you a full time job and a new build house in the outer suburbs 50 years ago then something's wrong when even a university degree won't enable someone born 50 years later to buy a comparable house today.

That's going seriously backwards and leads to a situation where the only solution for most involves battening down the hatches and slashing spending. Hence retail sales, car sales etc all in a heap.

 

[Smurf1976]

If Australia were producing EVERYTHING it needed, standards of living would drop way too much.

Nobody would seriously suggest we ought to do that. We never did it and few if any ever have.

On the other hand it also doesn't work to have what amounts to a coffee shop economy where the coffee shops aren't paying enough and are offering only a narrow range of work.

As with anything, the best outcome would be one somewhere in the middle.

 

[satanoperca]

If China was a democracy I would be more inclined to agree with you.

As it is, they steal technology which robs other countries of the ability to compete on a level playing ground and a lot of their wealth goes to their military which is not there for the benefit of us.

Whether you have your eyes closed or not, one day they will be a military threat and we will have to deal with that and it won't be easy.

There always has to be one, it seems it is you.

Lets look at your comments :
"If China was a democracy I would be more inclined to agree with you." Agreed it is not, but the USA is and how is it looking after it people, or for argument sack, Australia.

"As it is, they steal technology" Cry me a river, I think you will find every society within every country is guilt of it. But lets go with your theme, they do. Who buys it? The people from countries that they stole it from. I have no doubt, that within your home or work, you will find products and services that have stolen IP, do you care or even know? I doubt it.

"a lot of their wealth goes to their military which is not there for the benefit of us." Really, can you provide some figures in relation to GDP, think you might find that China spends less on arms as a % of GDP than many other countries.

"Whether you have your eyes closed or not, one day they will be a military threat and we will have to deal with that and it won't be easy." Agree, but so is the USA, it is just that we are friends at the moment. What happens when we no longer choose their side, will they be so friendly.

You amaze me with your understanding of the world, past and present or lack of it.

How about you remove all the items that you use daily that have not come from China and see how your week fairs.