World War III: Has it Started?

Bill M said:

I have had all these conditions throughout my working life, why would anyone want to give that up? I wouldn't wish Chinese, Bangladesh or Indian wages on our people currently in the work force that's for sure, would you?



The reason all these places closed up is because the factory owners saw a way out for more profit and took their business to China. You know, all them great Aussie icons like "Bonds", "Chesty Bonds". It's all about profit, they just want more and more and couldn't give a stuff about their Aussie staff. Here we go:
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The clothing giant confirmed yesterday it would close its seven Australian factories in a bid to save $150 million a year, justification that drew fierce criticism from political and financial leaders yesterday.
http://www.dailytelegraph.com.au/news/national/chesty-bond-turns-its-back-on-oz/story-e6freuzr-1111118966766


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A long time ago a wise man on radio once once said something like: "Why worry about businesses that we can't do anything about and concentrate on what we can can do. We have the best country on earth, he said, why not sell tourism? We have the best beaches, best foods, fine restaurants, good hotels, fresh air, why wouldn't they want to come. Make it easier for them to come and spend their $$$. No use flogging a dead horse and it provides lots of jobs."



I'm sorry explod, I strayed too. I don't think WWW 111 is happening just yet anyway mate, cheers.

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If those outlandish working conditions had not been implemented in the first place we may still have our manufacturing industry and more jobs...Half of my working life was rewarded with 2 weeks annual leave without leave loading...We worked a 40 hour week.....now days many work 38 hours and in some cases 36 hours per week......And you say you worked all your life with those great conditions and would not be prepared to give any up.

Companies went over seas because they just could not compete here with higher wages....They either took their factories overseas or go out of business here.......Profit seems to be a dirty word with many people from socialist world...What do you expect a company to do?....Run at a loss just to keep people employed.

That Chesty Bond movement took place February 26 2009....Things have gone from bad to worse since then.

So what is your solution?

:topic

This thread is way off topic, but its pretty obvious that labor costs in Australia are not affected much by supply and demand as much a non unionized countries. Its affected by holding the business to ransom.

Take the US, i may have said before, i have a mate that is a breakdown mechanic at a steel foundry in Michigan. He makes about $15.00 an hour. They're not unionized. He met a colleague of mine that works in a factory in Australia. He was pretty shocked to find out that a person without a trade, or even a high school diploma can be making $20 - $30 an hour doing unskilled labor...and still complain about it.

I agree with all of you that it is quite likely that without Unions here in Australia companies would have taken advantage of employees. But there are good companies out there trying to survive in Australia and can't due to excessively high wages. With a higher proportion of tasks going to automation i'm surprised the labor government has not thought of banning robotic technology yet.

Now that would cause a war... see back on topic.

noco said:

It is all about free enterprise.....If you go to a corner store and see their apples at say $6.99 a kilo and then you go to super market and see the same apples at $4.99 kg, where will you go to buy your apples next time?

I have just explained to Rumpy how things have been working in the mining industry.

So how can those schnucks, as you call them, make ADF uniforms here when we do not have the clothing factories here and if we did have them, at what price would they cost?...Probably double the price we can import them for....So I guess you are suggesting that the government should subsidize a local manufacturer, that is if he had the capacity to be able to supply thousands of ADF uniforms......We have some 4000 ADF personal along here in Townsville...

Off topic.

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Not all cost savings are passed on, not even proportionately. If it does, all my clothes would cost 50 cents instead of $5 a piece.

For gov't contracts, any cost saving is just extra cream on that gravy. I know because I know people who know people who supply to gov't j/k.


I'm sure I've said it before a while back... but if you look at any instance where a company have to move its manufacturing overseas, it does it after extracting all the "efficiency" and costs out of its workforce; can't do it any more then bugger off to other more desperate workers overseas.

It's never the case that workers want too much pay and are unwilling to be reasonable.

But say it's the labourer's fault for being able to abuse their position and demand too much... free market does apply to them slobs too right?

But reality is labourers, and soon, if not already, the more "professional" workforce, don't have much pricing power. For one, they don't got the cash to have politicians listens to them; for two they can't just pick up and move easily offshore to get a job.

Businesses, particularly multinationals... they can buy influence, have "free trade deals" signed as they'd like.. .and move their production and capital freely wherever it's most profitable.

Hence, pitting gov't against gov't; workers against more desperate workers.

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And no, I'm not saying that we ought to keep all manufacturing here at home; not anti-trade either. But there ought to be a balance between new, better paying jobs and the transition period; greater investment into training and education to prepare existing and future generations for new kind of work.

This would mean higher corporate taxes, not cutting them hoping for it to trickle down; then cut services and less pay to the poor and working plebs while we wait for the trickles.

Funny how to make Australia great, more money should be given to the rich... but less money have to be handed out or spend on the poor.


Anyway, it's these kind of beggaring the poor and alienating the masses that causes war and revolution.

Just this time, the war could go global and nuclear... that or things will just go on as it has and people don't mind it one bit.

CanOz said:

This thread is way off topic, but

Now that would cause a war... see back on topic.

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Yes analogues feed into causation, be it brute force or straws that break camels backs. Unhappiness of nations is a great driver for violent change.

CanOz said:

This thread is way off topic, but its pretty obvious that labor costs in Australia are not affected much by supply and demand as much a non unionized countries. Its affected by holding the business to ransom.

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Off topic again.

I'm sure your statement is right to an extent, there are award wages and the unions would object if these were breached, but if there are 50 applicants for every job that would give the employers an advantage wouldn't you say ? That's why wages have stagnated (and even the employers are complaining about this because it means no growth in consumer spending power).

One of the reasons why the official employment rate is steady or slowly falling is that full time working hours are being reduced, therefore less family income. That doesn't show up in the unemployment rate but does show up in the underemployment rate which is now at historically high levels.

Now, back to the war. (I thought we weren't supposed to mention that).

:rocketwho

Wages grew at way above average during the mining boom while productivity went nowhere. It's no surprise that wage growth is flat. We're also coming off the biggest boom ever, the fact that wages haven't fallen or the economy isn't in recession is something to probably cheer about.

McLovin said:

Wages grew at way above average during the mining boom while productivity went nowhere. It's no surprise that wage growth is flat. We're also coming off the biggest boom ever, the fact that wages haven't fallen or the economy isn't in recession is something to probably cheer about.

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I thought the miners gain abnormal supa profit during that one in a generation mining boom too. So Gina and the BHPs of the Australia can make that abnormal gain in profit, but workers shouldn't?

luutzu said:

I thought the miners gain abnormal supa profit during that one in a generation mining boom too. So Gina and the BHPs of the Australia can make that abnormal gain in profit, but workers shouldn't?

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Huh?

SirRumpole said:

Off topic again.

I'm sure your statement is right to an extent, there are award wages and the unions would object if these were breached, but if there are 50 applicants for every job that would give the employers an advantage wouldn't you say ? That's why wages have stagnated (and even the employers are complaining about this because it means no growth in consumer spending power).

One of the reasons why the official employment rate is steady or slowly falling is that full time working hours are being reduced, therefore less family income. That doesn't show up in the unemployment rate but does show up in the underemployment rate which is now at historically high levels.

Now, back to the war. (I thought we weren't supposed to mention that).

:rocketwho

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Yea, the way they define "unemployment" is odd too. It's all just to paint whatever picture the dear leaders want painted.

Heard some UK news saying the latest report from US about American wealth is that if you have no debt and $10, you're richer than half of the American population.

I hope I heard it wrong, but they mentioned it a few times... I have some idea of personal debt and mortgages putting people into negative equity, but half is a bit shocking.

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Speaking of war and civil unrest... and going off what Chomsky quoted Aristotle and US 4th [?] president James Madison approaches to solving social inequality and keeping the peace.

They both recognise that in any society, there will always be the few rich and the many poor. How do you keep the peace and control the poor masses, keeping them in line so they won't march on your gated mansion?

Aristotle proposes what we call the Welfare State. Gov't create jobs, provide social security so the poor won't struggle so terribly that they would take up arms. As it turn out, with the masses being educated and having enough to eat and some saving - they can work smarter, think a bit... and also have cash to spend, driving up demand and so create jobs to produce those increased demand.

Madison's, and many others, namely the neo-con like Greenspan and our own copycats... their solution is to keep the masses stupid and precarious.

Less money to the poor, less job security to them, indebt them with free trade and free market through such things as predatory lending, low interest rate to take their savings and drive up property prices so they'd buy in and be indebted for most of their rebellious days... and that's just as good of a whip to keep people in their place.


In totalitarian states, that kind of tough love tend to work... until it stopped and the plebs put a few heads on a few spikes.

In more democratic states, well they're slowly taking away the rights to protest - calling it riots and trespassing; labelling you a terrorist and imprison you without charge etc.... and so far it seem to be working. But it always end up with a pretty ugly country to live in.

But that's fine since if you're rich enough, you can take holidays in paradise somewhere... and if you're lucky or work hard enough to directly own a few stocks or a couple of properties... you'd slowly make rationales to take wages from people, all for efficiency and competitiveness and a buck or two in extra dividend.

McLovin said:

Huh?

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Originally Posted by McLovin :

Wages grew at way above average during the mining boom while productivity went nowhere. It's no surprise that wage growth is flat. We're also coming off the biggest boom ever, the fact that wages haven't fallen or the economy isn't in recession is something to probably cheer about.

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During the mining boom, mining companies also make above average profit too yes?

So why is it normal for the companies to make abnormal profit growth but is it not so right for the labourers who work for them to make abnormal wage?

And how do you measure productivity to conclude that those labourers didn't make any productivity gain for their wage gains?

Sure you can argue that they're doing the same work at higher wages and all the extra profit are just price increases... but even if that were true, that's part of the deal: people can work just as hard or as little, as long as what they do produce higher profit to justify their wages. Free market.

luutzu said:

Originally Posted by McLovin :


During the mining boom, mining companies also make above average profit too yes?

So why is it normal for the companies to make abnormal profit growth but is it not so right for the labourers who work for them to make abnormal wage?

And how do you measure productivity to conclude that those labourers didn't make any productivity gain for their wage gains?

Sure you can argue that they're doing the same work at higher wages and all the extra profit are just price increases... but even if that were true, that's part of the deal: people can work just as hard or as little, as long as what they do produce higher profit to justify their wages. Free market.

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Wow. Way to totally misrepresent what I said.

McLovin said:

Wow. Way to totally misrepresent what I said.

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So what do you mean by:
"Wages grew at way above average during the mining boom while productivity went nowhere."

anyway, just chalk it down to me not being able to read English and you speaking too fast for my sluggish mind.

luutzu said:

So what do you mean by:
"Wages grew at way above average during the mining boom while productivity went nowhere."

anyway, just chalk it down to me not being able to read English and you speaking too fast for my sluggish mind.

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In the 90s productivity drove wage increases. After 2001 productivity slowed massively but wages kept growing because of the mining boom. Productivity is still flat, the mining boom is over so it's not surprising wage growth has stalled.

McLovin said:

In the 90s productivity drove wage increases. After 2001 productivity slowed massively but wages kept growing because of the mining boom. Productivity is still flat, the mining boom is over so it's not surprising wage growth has stalled.

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The Productivity index has only just now got back to where it was in the late 70s, hasn't it?

(That could be a combination of capital + labour productivity, though and not just labour productivity)

Ves said:

The Productivity index has only just now got back to where it was in the late 70s, hasn't it?

(That could be a combination of capital + labour productivity, though and not just labour productivity)

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I've seen that graph somewhere, but was there a rebasing of that index somewhere along the lines? I seem to recall having a similar issue with some other ABS data going way back and my old mate from the ABS filled in the gaps (it had to do with married women and the participation rate if I'm remembering right). It seems highly unlikely that we're only just now catching up to productivity in the 1970s. Which wasn't really a great period for Australian productivity. And of course we've come along in leaps and bounds since then in every which way.

This is a pretty good graph though of 5 year rolling productivity increases in Australia. It's not totally up to date though, but it makes the point.



http://www.abc.net.au/news/2014-02-06/ged-kearney-wages-productivity-claim-overstated/5227450

So yeah, the wage flat spot, at least IMO, seems more likely due to the productivity flat spot and the end of the boom than anything else.

McLovin said:

I've seen that graph somewhere, but was there a rebasing of that index somewhere along the lines? I seem to recall having a similar issue with some other ABS data going way back and my old mate from the ABS filled in the gaps (it had to do with married women and the participation rate if I'm remembering right). It seems highly unlikely that we're only just now catching up to productivity in the 1970s. Which wasn't really a great period for Australian productivity. And of course we've come along in leaps and bounds since then in every which way.

This is a pretty good graph though of 5 year rolling productivity increases in Australia. It's not totally up to date though, but it makes the point.

View attachment 68461

http://www.abc.net.au/news/2014-02-06/ged-kearney-wages-productivity-claim-overstated/5227450

So yeah, the wage flat spot, at least IMO, seems more likely due to the productivity flat spot and the end of the boom than anything else.

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Here's the one I was looking at:

http://www.tradingeconomics.com/australia/productivity

(you'll have to switch the chart to "Max")

They're saying the data is sourced from the ABS, you're right it doesn't make sense, but there's probably an explanation for it.

Ves said:

Here's the one I was looking at:

http://www.tradingeconomics.com/australia/productivity

(you'll have to switch the chart to "Max")

They're saying the data is sourced from the ABS, you're right it doesn't make sense, but there's probably an explanation for it.

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Yeah, it looks as though it was rebased...or Sydney and Melbourne were razed back in the early 80s and we never knew!

McLovin said:

Yeah, it looks as though it was rebased...or Sydney and Melbourne were razed back in the early 80s and we never knew!

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LOL. I can't find a way of making an historical chart on the ABS website, so I assume there's no function that lets you do it. I don't really have the time to compile all of the historical data myself.

McLovin said:

In the 90s productivity drove wage increases. After 2001 productivity slowed massively but wages kept growing because of the mining boom. Productivity is still flat, the mining boom is over so it's not surprising wage growth has stalled.

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I'm not with you on this one.

Bill Mitchell presents it well.
http://bilbo.economicoutlook.net/blog/?p=34164

Big picture: http://bilbo.economicoutlook.net/blog/?p=277

The following graph shows the indexed growth in hourly real wages and labour productivity per hour since the September-quarter 1997 (the start of the Wage Price Index series).



If I started the index in the early 1980s, when the gap between the two really started to open up, the productivity index would stand at around 180 and the real wage index at around 115.

Starting the index in the September-quarter 1997 produces a smaller gap, which just goes to show that one can manipulate data to achieve a range of ends (often quite contrasting) by altering the sample size.

What is clear is that since the September-quarter 1997, real wages have grown by only 12.4 per cent (so just over 0.6 per cent on average per year), whereas hourly labour productivity has grown by 31.9 per cent (or 1.7 per cent on average per year).

This is a massive redistribution of national income to profits and away from wage-earners and the gap is widening each quarter.

Where does the real income that the workers lose by being unable to gain real wages growth in line with productivity growth go? Answer: Mostly to profits. One might then claim that investment will be stimulated.

At the onset of the GFC (December-quarter 2007), the Investment ratio (percentage of private investment in productive capital to GDP) was 23.8 per cent.

It peaked at 24.3 per cent in the June-quarter 2013. But in recent quarters as the gap between real wages growth and productivity growth widens, the Investment ratio has fallen and in the March-quarter 2016 it stood at 19.3 per cent and is falling.

The downward shift in the non-mining investment ratio is more stark than that.

Some of the redistributed national income has gone into paying the massive and obscene executive salaries that we occasionally get wind of.

Some will be retained by firms and invested in financial markets fuelling the speculative bubbles around the world.

For workers, the problem is that they rely on real wages growth to fund consumption growth and without it they borrow or the economy goes into recession. The former is what happened around the world in the lead up to the crisis (and caused the crisis).

The latter is more or less what is happening now.

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Wealth inequality is fuelling so much frustration in many countries - will the frustration lead to a change movement that addresses the real problem or will the change movement just get hijacked by nutters like Trump that will redirect the frustration for a period to their own ends. Nutters saying whatever it takes for power and a discontent populace unsure about the root cause of their discontent is not a good combination for having faith that rationality and peace prevails.

craft said:

I'm not with you on this one.

Bill Mitchell presents it well.
http://bilbo.economicoutlook.net/blog/?p=34164

Big picture: http://bilbo.economicoutlook.net/blog/?p=277

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I totally agree that more of the pie is flowing to capital than to labour. I can't argue that the system is stacked against labour but within that dynamic is also the effect of things like the mining boom and jumps in productivity in the short/mid run. But I take your point, and stand corrected.

That's a great blog BTW.

craft said:

IWealth inequality is fuelling so much frustration in many countries - will the frustration lead to a change movement that addresses the real problem or will the change movement just get hijacked by nutters like Trump that will redirect the frustration for a period to their own ends. Nutters saying whatever it takes for power and a discontent populace unsure about the root cause of their discontent is not a good combination for having faith that rationality and peace prevails.

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My fear is not what happens this time, but in four years. The seeds have been sown and it will only take a slightly more erudite proto-facist than Trump to stir up the anger again and win more of the middle.

The problem really is that we are stuck with a system that requires endless forward momentum.