The Coalition and the business lobby need to find a defensible position on wage stagnation quick smart because Labor is going to use it to clobber them all the way to the election. Forget boats, forget the coming Labor recession, forget $200 billion in new taxes — if the conversation is all about wages from now until May the government will face a wipe out, even bigger than today’s truly rotten Newspoll suggests.
The government’s strategy on wages has — as Crikey has detailed for a couple of years now — been to try to pretend the issue will go away in another quarter or two — just keep forecasting a return to strong growth and hope only economists and the Press Gallery notice you keep revising your forecasts down every six months.
Bill Shorten finally killed off that strategy by telling the Financial Review’s circle jerk of business elites last week that the election would be a “referendum on wages”. The election probably won’t be anything of the sort, but boy, did that statement put the wind up business, the government — and their apologists at the AFR — and get the media focused on an issue that most effectively sums up the electorate’s sense that our political and economic system is delivering for elites but not for ordinary families.
Mathias Cormann’s approach late last week was to (finally) acknowledge low wages growth but insist it was really a good thing, because it reflected the kind of flexibility that traded off lower wages growth for lower unemployment. Wage stagnation was thus a “design feature” of the current system. You could get away with that argument with economists but telling voters that stagnant wages were a deliberate policy is unlikely to win votes — certainly not among the vast majority of working-age people who are actually in work.
Labor was only too happy to help amplify Cormann’s remarks. The newly (and seemingly wrongly) promoted Linda Reynolds provided a comedic interlude on the issue yesterday — in the course of spectacularly stuffing up on three completely different topics — by attacking Cormann’s statement under the illusion it was actually Bill Shorten’s. The government then took to handing out information sheets to journalists explaining that wages had increased ahead of inflation — not exactly much of a boast when the best you can claim is that wages grew by 0.5% more than inflation in 2018.
So the government’s positions on wage stagnation in the last few days have been that it’s not an issue, that it’s an issue but things are getting better, hey isn’t it great because it keeps unemployment down, and Bill Shorten’s an idiot engaged in the politics of envy. Meantime, at the AFR — where the editor has described discussion about stagnant wages as “whingeing” — the policy continues to be to deny that there’s a problem at all and that if only we gave business tax cuts, wages growth would surge to a mighty 3.4%. For the record, Australia’s private sector workers had wage rises of 3.8% back in 2012, under our allegedly investment-deterring 30% company tax system. The AFR also continues to parrot the business line that wage rises will follow productivity increases — a claim thoroughly and forensically discredited by Saul Eslake last year, who noted productivity has been outstripping wages growth since the early noughties.
All of this will be music to Labor’s ears, of course — it perfectly suits both Labor’s agenda, and its effort to frame the government as hopelessly out-of-touch and allied to the scandal-plagued business sector, that the government and business are unable to offer a coherent — or even accurate — response on wages stagnation. The one thing Labor would not want to see would be, say, the government using the budget to announce that wages growth was now its priority and it had a suite of measures to address it. Given the Coalition has spent five years in utter denial about the issue, the chances of that are slim indeed.
“certainly not among the vast majority of working-age people who are actually in work”
Now you’ve got the hang of it!
“The one thing Labor would not want to see would be, say, the government using the budget to announce that wages growth was now its priority and it had a suite of measures to address it.”
I doubt that, actually. This would be a concession that Labor was right all along, and on the government’s core area of economics. The floor on the government’s vote relies on the mantra that Labor is wrong about everything and especially on the economy, and no matter what idiocies and scandals the government comes up with, voters will still be better off under the “better economic managers” than under Labor. Concede that floor and the gap could actually blow out… make the concession and I think people will still trust Labor to do better on wages than the Coalition (much as they now trust Labor to do better on answering the banking RC than the Coalition no matter how many times Frydenberg tries to take credit for the RC).
when will someone, in fact anyone, ask this crap government that keeps crowing about millions of jobs its created, “WHATS THE USE OF A JOB IF YOU CANNOT LIVE ON THE WAGES” do all the dumb bastards that still support these thieves ever consider that, or where they themselves will be in ten years if their wages keep shrinking andtheir living costs keep rising, thats a recipe for the perfect economic storm, AKA 1929 all over again,, for gods sake wake up you dumb bastards.
I would think that some of these business leaders would be a little more cautious of complaining for more profit share at the expense of their workers, after all many pay zero company tax and are propped up by the tax payer indirectly and directly in downturns.
Any tax payer funds that go to support private business should be a considered a shareholding that pays dividends, if you want capitalism take the responsibility as well as the rights and benefits.
A more nationalised fairer form of capitalism is required, one that fully appreciates its environmental impacts and citizens before profit for the sake of profit alone.
another election a la Mediscare campaign – each election now seems to fought on non existing issues
Flatlining wages are a real issue, and people know it because it is their wages. You can bullshit them on your boats, you can bullshit them on the impact of carbon pricing, you can bullshit them that Labor’s negative gearing changes will both increase and decrease housing prices at the same time depending on how you are talking to at the time, but you can’t bullshit them on how much they take home and how much their household expenses are.
Or how they are litereally eating into their savings, just to stay afloat.
Too true, eating the paint off the walls, accruing debt, to survive.
Yeah, right. Because how much they get paid is a total non-issue for every wage earner. All it took was this post to make us all see the truth of that.
The LNP really is totally stuffed. Even its trolls are useless.
take the sunnies off desmond, your coalition slip is showing, staffer maybe or even spouse of one of the coalition blood suckers perchance?
How can you have a “scare campaign” about something that is already a lived reality? Wages growth is currently half what it was back in 2010-2013, & the Coalition must bear the brunt of the blame. They urged for Penalty Rates to be cut by the FWC, they played hardball on negotiations with the Public Sector workers, they’ve outsourced large chunks of the public sector to private service providers, they’ve played loose with the Working Visa system, multiple times, & have turned a blind eye to flagrant wage & entitlement theft. Or did you think that had no cumulative effect?
BTW, what you call “Mediscare” was actually a fair assessment of the fate of Medicare under a re-elected Coalition government-given the known facts at the time…..like the removal of vital procedures from the Medicare Registry, the freeze in the Medicare Rebate, the outsourcing of some Medicare services to Telstra (during their caretaker period, might I add) & the multi-million dollar report-into privatizing Medicare-that the Coalition commissioned back in February of 2016. Turnbull only dropped this plans a week before because he *knew* it was hurting him in the polls.
If you think Mediscare is a non-issue, just look at what coalition governments have been doing to Medicare, over the years. You can now visit a specialist eye surgeon and pay $125, for which Medicare will give you back $37. If you are too poor for that kind of thing, be prepared to go blind in one eye with retinal detachment, glaucoma and a host of other problems of old age.
Your type of Neoliberal hack just makes me sick.
Limited News Party procrastination over wage rises (hoping for the wage fairy to wave her magic wand : rather than their donors having to dip into their own pockets of profit to pay them) has been drawn and quartered.
As for “wages had increased ahead of inflation”? Would that be “average wages”?
Would that include the $millions that dozens of business executives are getting : contrasting to the myriad that didn’t – like cleaners, carers, underemployed, part-time workers, agricultural, hospitality and all those that lost penalty rates while others, working the same hours in different industries, didn’t?
Poor old matress conman will have to smoke cheaper cigars when he`s outside celebrating another wage cut (with his mate joe cigars sloppy) for the peasants if he goes into opposition on lower wages and less free travel, what a tragedy, might even have to sell one of his neg geared million dollar properties to make ends meet, just makes your heart bleed to watch that sort of suffering, all bills fault, damn him.