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Record corporate profit has seen record low wage growth

 

The government is trying to sell us the line that, if businesses make more profit, wages will go up.

This flies in the face of all evidence.

Corporate profits in Australia rose 6.0 percent quarter-on-quarter to 82.63 AUD billion, an all time high, in the March quarter of 2017 from a 20.1 percent rise in Q4 2016.

Year-on-year, corporate profit surged 39.7 percent.

Whilst corporate profits are skyrocketing, wages are experiencing record low growth.

Wage growth remained at record lows in the first quarter of this year, with workers receiving a pay rise of just 0.5 per cent.  That keeps annual wage growth at just 1.9 per cent, the lowest on Bureau of Statistics figures that go back to the late 1990s.

The last budget stated:

Corporate profitability is expected to improve, consistent with recent higher commodity prices, lifting expected receipts from company tax from 2017-18. However, aggregate wages growth is expected to be weaker, resulting in downward revisions to receipts from personal income tax.

By their own admission, rising corporate profits have NOT resulted in higher wages and are not expected to.


67 comments

  1. Peter F

    ‘By their own admission, rising corporate profits have NOT resulted in higher wages and are NOT EXPECTED TO.’

    Kaye, when will the ALP make this their rallying cry?

  2. Kaye Lee

    It is so frustrating Peter. They need to point out how increasing demand is what attracts investment and creates jobs. The best way to increase demand is to increase welfare payments and increase the disposable income of low and middle income earners. They could continue with raising the tax free threshold for starters.

    The proof is all there. Soaring corporate profits do not make companies pay higher wages or employ more people. DEMAND does. Lift people out of poverty and save on the health and law enforcement bills. Educate people and collect more income tax as they get better jobs and more GST as the poorest spend more.

    I am waiting to hear Bill Shorten explain these things instead of stumbling over infrastructure building as the only job creator.

    40% increase in corporate profit…1.9% increase in wages.

    I repeat…THE PROOF IS THERE…..USE IT.

  3. Harquebus

    The ALP will not be able to increase demand any more that the Coalition. Neither side has any idea as to the causes and therefore, are also not able to offer any real solutions. They will instead, continue to lie about everything.
    Diminishing returns on energy and other resources.

    “Most people aren’t paying attention. Most people have no idea what’s going on. Industrial civilization is already having serious health problems and heart palpitations. By 2020, industrial civilization is going to suffer a massive stroke. By 2025, it will be in hospice. By 2030, it will be dead.”
    “Phase 1 was the peak of conventional oil in 2005, with the ensuing GFC (global financial crisis) in 2008, papered over by massive debt conjured out of thin air by the financial manipulator magicians at the Federal Reserve. Phase 2 starts with the growing ineffectiveness of these financial measures against stark net energy realities.”
    http://articulatingthefuture.weebly.com/home/thermodynamic-failure-phase-2

    I’ve had my say Kaye Lee and thank you very much. I am not going to argue with you as we would both be wasting our time.
    Avagoodwun.

  4. Kaye Lee

    Luckily other energy sources are replacing oil. The GFC had nothing to do with oil. Your comment is factually incorrect, has nothing to do with the article, and adds nothing except your usual klaxon blaring.

  5. Johno

    If we are going into hospice in 2025 I hope I get a view of the ocean, or would it be a view of the algae bloom. LOL (not funny really)

  6. Matters Not

    Lots of talk about neo-liberal economics leading to further inequality but some have a different take.

    For a start, what is the evidence linking neo-liberalism with increasing inequality? Indeed, what exactly is there about neo-liberalism that it inevitably leads to more inequality? Surely those who seek to blame neo-liberalism for the increase in inequality should feel some obligation to answer these questions, but that never actually occurs.

    Keating (Michael not Paul) goes on. He doesn’t argue that inequality is on the rise across the world. That’s an uncontested given. BUT he suggests other causes:

    there is not even a compelling coincidence between the increase in inequality and the adoption of so-called neo-liberal economic policies. Instead, of neo-liberalism, the vast majority of independent experts, who have studied the evidence, have concluded that technological change has been the principal driver of the increased inequality observed over the last thirty years. Technological change has particularly impacted middle-level jobs and has thus hollowed out the workforce, which then shows up as an increase in inequality. To a much lesser extent globalisation has also played a role, and an increase in rent seeking is responsible for much of the huge increases in the share of people in the “top 1%” of the income distribution. But that begs the question of why the members of this top 1% could access such rents, and that comes back to the role of neo-liberal economic policies …

    Instead, what these so-called ‘neo-liberal’ economic reforms made possible was the more than a quarter of a century of economic growth, involving large increases in employment and wages , which is about the best recorded, both in our history and relative to other developed countries.

    http://johnmenadue.com/michael-keating-why-blame-neo-liberal-economics/

    Following criticism of his original paper, he responds in greater detail. First he defines the concept. Always useful.

    These reforms involved:
    floating the Australian dollar,
    financial deregulation and (later) changing the type of regulation,
    largely eliminating protection, and a shift in industry assistance in favour of more generic assistance and less specific industry assistance,
    tax system reform,
    decentralising wage determination in favour of more enterprise bargaining,
    some measure of privatisation accompanied by the introduction of competition policy.

    Then the discussion:

    have been many allegations that the privatisation of public utilities has led to higher prices. However, the evidence shows that prices initially fell following many privatisations and the introduction of competition policy at the same time. While clearly further large increases in the prices of electricity in particular have been foreshadowed, there are a number of reasons which have nothing to do with privatisation; such as the recent increases in gas prices, and the impact of policy uncertainty on investment.

    http://johnmenadue.com/michael-keating-why-blame-neo-liberal-economics-a-response/

    Both papers are worth a read.

  7. Harquebus

    Kaye Lee
    The GFC had everything to do with oil. Wide spread subprime mortgage default due to high gasoline prices dragging on the economy.
    Thanks again and I am sure that you will forgive me for not sticking around to argue this one also.

  8. Kaye Lee

    MN,

    The issue is that this growth has gone increasingly disproportionately to the owners of the capital. Valid point that automation exacerbates this, so why reduce company taxes when they are often employing less people? What’s to stop them using that extra money to go even more automated? You don’t have to pay superannuation for a machine.

  9. Kaye Lee

    Had people not been given loans they couldn’t afford, thus making them very vulnerable, rising gas prices would not have sent them over the edge. Oil prices didn’t cause the bubble but they may have helped burst it.

  10. diannaart

    Matters Not

    Is Michael Keating claiming that neo-liberalism has nothing to do with creeping inequality at all? Just a coincidence? Could there not be a confluence of contributing factors, with neo-liberalism a significant player?

    A system which is at its foundation a sophisticated ponzi scheme is not going to benefit the majority of people. It is basic maths.

  11. Matters Not

    You don’t have to pay superannuation for a machine.

    Nor sick leave, holiday pay, leave loadings, overtime … and the like. Machines are labour saving devices and regardless of political promises to create more jobs, machines (now becoming smarter and smarter) will displace even more labour in the foreseeable future and beyond. More wealth created. More human energy saved for creative pursuits. Sounds great.

    Of course, the problem is – how to distribute that resultant wealth. Who own and controls that technology creates the future. The sooner that is realised, the sooner we can begin to design a better future for all. But the resistance will be monumental.

    Take TRUSTS as an example. I’ve been part of a family trust for decades While I personally don’t benefit financially (on paper I do), the offspring save significant tax dollars. It’s ridiculous for that arrangement to continue. Even the decision by Labor not to change trust arrangements that affect the family farm is a fiscal nonsense. Exempting the family home from assets tests is just ridiculous. (And they wonder why houses are getting bigger and bigger and their value rises exponentially. It’s hilarious.) Keeping superannuation tax free is also another rort. One could go on.

    Things won’t change until we decide not to muck around at the edges and get serious.

    diannaart, re Keating, I suggest you read his articles. They are somewhat contentious. Remember he was ‘driving the bus’ at significant times when these changes were occurring. But still worth a read.

  12. Terry2

    The problem we are now facing is major corporations around the world demanding of governments that their taxes be reduced if not eliminated.
    This is what cost us our automobile manufacturing industry where Asian countries – particularly South Korea when it came to GMH – were prepared to give General Motors big incentives and tax concession to transfer their Australian manufacturing.

    If Trump gets his way and reduces corporate taxes to 15% in the USA, the rest of the industrialised world will have to follow causing havoc to our economies and diminishing the monetary resources we have to spend on things that actually benefit society like Healthcare, education, infrastructure renewal etc.

    Perhaps Christopher Pyne was being pragmatic when he said that we must get into the manufacture and export of armaments. Seems the major viable business for the future is war and killing each other.

  13. jimhaz

    Michael Keating was in charge of NSW IPART for some time. Rocketing electricity prices started under his tenure and he did nothing about it except promote it. I see him as a tool of the government of the day- HE IS A PAID EXCUSE MAKER – which is precisely what he is doing in the quotes above. A traitor to the people.

  14. Matters Not

    Yes Terry2 we are engaged in a race to the bottom when it comes to corporate taxation. Democracies, supposedly underpinned by the will of the people only make feeble attempts to remedy same.

    (As an aside, when it comes to effective tax rates, there are some difference between nations that are not well understood. In Australia because of ‘dividend imputation’, the same profits aren’t taxed twice. Not so in the USA where double taxation is the order of the day.)

  15. Kaye Lee

    Companies should contribute for the infrastructure we provide, the educated healthy workforce we provide, the security provided by our law enforcement and judicial system, our stable financial institutions (for now at least).

    As they pay less to employ people, as they train less people, they should contribute more towards the well-being of the society that provides all these things for them. Or they can make their contribution by employing people and receive some tax concession. We really should get rid of payroll tax.

  16. Matters Not

    Seems to me that explanations of rising inequality should pay due regard to the work done by Piketty.

    Professor Piketty’s best selling book Capital, first published in 2013, propagated the idea the high rate of return on wealth plus low growth produces income inequality. According to The Wall Street Journal it is also one of the most unread bestsellers, …

    … meritocracy was a “fairytale” perpetuated by the beneficiaries of the capitalist system.

    “There is a western illusion about modern inequality as opposed to ancient inequality. Meritocracy is largely a myth invented by the winners of the system,” he said, noting forces such as racial discrimination and access to finance and resources such as oil helped to create and sustain inequality

    This morning I watched Trump announce (proposed) cuts to Green Cards and promising how every thing will get so much better. Piketty again:

    If we don’t address inequality in a democratic way, we will always find political leaders like Donald Trump or [Marine] Le Pen who use inequality in order to basically tell you stories…’This is their fault, this is because of foreign workers, this is because of foreign countries, this is because of Germany, China’. You can always blame someone,” he said.

    Piketty’s basis thesis in brief :posits a “fundamental inequality”: if the rate of return on capital is higher than the rate of economic growth, then the gap between rich and poor will increase.

    And it is increasing. Look around.

    http://www.afr.com/news/economy/thomas-piketty-debunks-australias-meritocracy-fairy-tale-20161023-gs8sb6

  17. diannaart

    51% of the world’s population can attest to the B/S that is meritocracy.

    Meritocracy where the measure is set by those already in power.

  18. Matters Not

    https://en.wikipedia.org/wiki/The_Rise_of_the_Meritocracy

    The Rise of the Meritocracy is a satirical novel by British sociologist and politician Michael Young which was first published in 1958. It describes a dystopian society in a future United Kingdom in which intelligence and merit have become the central tenet of society, replacing previous divisions of social class and creating a society stratified between a merited power holding elite and a disenfranchised underclass of the less merited. The essay satirised the Tripartite System of education that was being practised at the time

    Not sure if it gets a mention these days.

  19. silkworm

    Everything Kaye Lee said at 9.23am. Increase welfare and that increases demand, and that creates employment, and that reduces inequality. Kaye is also right about Shorten. He’s fartarsing around the edges… but he’s the best we’ve got.

  20. Michael Taylor

    I was of the opinion that the GFC was because of some mortgage stuff-ups, or something similar.

  21. Michael Taylor

    When I googled for an answer just then, the first 115 million search returns confirmed it for me.

  22. Michael Taylor

    Your comment … has nothing to do with the article, and adds nothing except your usual klaxon blaring.

    I’ve also noticed a lot of that lately. Frankly, I’m growing quite tired of it.

  23. Kaye Lee

    Subprime mortgages and lax lending practices made suburban houses affordable to a new class of homeowners characterized by low incomes, high leverage, low credit worthiness and long work commutes. The long commutes may have made properties further out worth less due to it costing more to get to work when gas prices rose (and those would have been the most vulnerable people) so, at a stretch, I can see what H is saying but it wasn’t the cause. Any rise in the cost of living or any disruption to employment would have had the same effect. They were overextended and vulnerable.

  24. Zathras

    There was probably a rise in the price of Mars Bars at the time of the GFC too but correlation does not always mean causation.

    I suspect that people borrowing more than they could afford to repay, rising unemployment, a downturn in property values and the subsequent massive mortgage defaults had a bit to do with it.
    People who owed more than their property was worth simply bailed out (as you can do in the USA), leaving the Banks with unoccupied overvalued houses they couldn’t re-sell and thus deposits they couldn’t honour.
    It’s not “Rocket Surgery”.

    Meanwhile some of us have waited in vain since the eighties to see the all that wealth “trickle down” but it’s obviously been going the wrong way all this time.

  25. Ted Jackson

    Absolutely Kaye, however I don’t see anyone in the Labor Party making the right noises. I reckon it’s time for a new party – to the left of Labor that isn’t scared of the polls and the bullshit big business is pushing.

  26. totaram

    Zathras: “There was probably a rise in the price of Mars Bars at the time of the GFC too but correlation does not always mean causation.”

    That is a succinct explanation of why H’s unique (and indeed very surprising) explanation of the GFC needs to be ignored.

    Piketty is very likely right about inequality, on the basis of the vast amount of evidence accumulated by him. I have not heard of any one actually debunking his thesis with data and valid arguments.

    As fore Michael Keating’s “defence” of neoliberalism, does he have a working definition of neoliberlism? I might read his “defence” if I thought it was more than paid-for twaddle.

  27. Florence nee Fedup

    I recall as a child many including my father, a farmer, believing the great depression being caused by global over production.

    Couldn’t understand how this could be so. Seen people homeless. People broke. Scarcity of goods.

    How could overproduction be the cause, when most had unfilled needs.

    I seen the cause as lack money in people’s pockets. Inability to earn a liveable income.

    Same as now.

  28. Miriam English

    I’ve just finished reading a brilliant novel, Walkaway, by one of my favorite writers, Cory Doctorow.
    http://craphound.com/walkaway/

    The story follows the current political and social trends to their logical conclusion. I love the way he reasons out the split in society. The story describes a kind of utopian dystopia. Terrible things happen in the story, but it also describes wonderful things. I don’t believe it will get as bleak as he thinks, and a lot of the good things he talks about are already happening in ways mostly invisible to society at large.

    The inequalities in his story are outrageous, but we can already see them moving that way. Ultra-wealthy people are colloquially called zottas (“zetta” is the prefix for a billion billion in the same way that “kilo” is the prefix for a thousand, “mega” a million, giga a billion, tera a trillion, and so on). Ordinary people are little more than serfs, but mostly don’t realise it because the media controls their view.

    The walkaways the title speaks of are people who, for one reason or another, simply walk away from society’s rat race. They’re able to do that because of developments that are already beginning now, such as ubiquitous networking, wearable computing, sharing of information, 3D printers, and home-made vat-grown food. He takes a lot of inspiration from the open source computing community where people already do stuff because they want to instead of money. Many of the best computer programs and the best operating systems are already created this way. This is starting to spread to the world of physical objects with 3D printing gradually making its way into mainstream society. (Just have a look at the designs shared for free on Thingiverse.) In that area capitalism has already collapsed, just hardly anyone has noticed. (I’m waiting for a better 3D printer than the one I already have. It is a Kickstarter crowdfunded project and it will be delivered to me next month. One of its nice abilities is to also make 3D scans of existing objects.)

    I highly recommend Walkaway. Despite the unpleasant things depicted in the story it is an optimistic look at the very near future.

  29. Harquebus

    Michael Taylor
    You examined “115 million search returns”? Wow! Bravo.
    I would love to debate the issue with you but, I can’t compete with that.
    Goodnight.

  30. Matters Not

    with 3D printing gradually making its way into mainstream society

    Not only here but across the world. For example, many manufacturers in China, Vietnam and elsewhere who make ‘taps’ and associated products are shit scared of 3D printing – as are their lowly paid employees.

    As for:

    In that area capitalism has already collapsed,

    How so? Seems to me that those who own the technology (rather than land, buildings etc) are the new owners of the means of production. How is that interpreted as the collapse of capitalism? What am I missing? Please explain.

    Does the 3D printer you are expecting arrives without you ‘paying’ for it? A ‘freebie’? Or are the makers of same going to accumulate large amounts of capital? if not, then why not?

  31. Miriam English

    I paid for the 3D printer as one of the backers for the crowdfunded project. Once I have it I can print objects up as I need them. I don’t need to go to a shop and buy things. Of course there are a lot of things I’ll still have to buy in a shop, but as the capability of 3D printing increases I’ll be able to substitute it for more things I’d otherwise have to buy.

    Remember a couple of decades ago when there were local printers, like Snap Printing? Most of those places disappeared with the desktop printing revolution. People just print their own stuff now, or even better distribute images and text through the net.

    This is the kind of effect 3D printing is expected to have on manufacturing. It will take a while, and it is slow at the moment, but these things tend to accelerate and are suddenly everywhere.

    There are already 3D printers that can print metal objects, and other people have printed up circuits using conductive plastics. Someone even printed up a radio some years back.

    People sharing designs are speeding the refinement of printed objects. As people improve on each other’s design and share it again for someone else to improve still further we are seeing rapid evolution in a similar way to how computer programs have have rapidly evolved by people sharing their source code.

    All this is largely invisible to mainstream society and people won’t really know about it until it will suddenly seem to be everywhere. The kids will have mastered it and the oldies will dismiss it, but it will change everything. It is already beginning to.

  32. Matters Not

    Thanks for your response. Yes it will have profound effects.

    But to the nub of my question: How will it cause the collapse of capitalism?

    Seems to me that such technology will just as likely accelerate the concentration of capital. Presumably you don’t own the patents or the …

    You just remain the user of same. Still dependent on …?

    Yes I now have my own printer, my own digital camera, my … whatever

    Yet the concentration of capital increases. No sign of collapse on my horizon.

  33. Miriam English

    “How will it cause the collapse of capitalism?”
    It won’t. Or at least, I don’t think it will. You missed the qualification of what I said: In that area capitalism has already collapsed.

    Open source programming has produced marvellous works that have defied mainstream capitalism. People produce these things to scratch an itch, not to make money. Money is sometimes being made, though in novel ways, so it hasn’t led to the total collapse of capitalism, even in those areas.

    YouTube has led to people producing far more video content than normal movie and TV studios could ever hope to. Most people share it for free. This is another example of the collapse of capitalist motivation.

    3D printing is extending this to physical objects.

    Project Gutenberg and Librivox are two of my favorite examples of people sharing things for free — the first ebooks, the second audiobooks. But there are countless examples of free repositories of people’s creations being shared online now. Capitalism is unable to survive in most of those.

    However, I think capitalism has its place. To discard it completely would be to throw away what has been a very useful tool. It just needs to be regulated and kept under control. Capitalism out of control is an incredibly dangerous thing. It should always serve the people, not the other way around.

    Same as the government — it should always serve the people. Government becomes a problem when the people running it think they are elites and all the other people are beneath them (the idiots in our current government think that way). The people in the government need have it brought home to them that they are the servants.

  34. diannaart

    Miriam

    Thanks for the inspirational comments. I agree there are those who will work around capitalism. While the big “C” will not die I am hoping it can be fettered far more than it is now. Capitalism is the one thing that enough rope will never rein in.

    Have just finished a psychological/impending apocalypse novel by Liz Jensen, “The Rapture” which mixes science with Christian evangelism. Now I will track down Cory Doctorow’s “Walkaway”. I am sure I have read his writing before, but can’t think of a title.

    And now you have a 3D printer, well done you for supporting and sourcing. What do you use for “ink” – this has always intrigued me, for example, 3D printing of food raises numerous questions starting with the ‘raw’ materials, safety, wholesomeness and many other concerning thoughts.

    Are you using plastics? What type? Is this sustainable? And environmentally sound – like recycled polymers or silicon?

    How will the very poor manage to use the alternative market? Many of us in the west have better access to money. Bitcoin has been absorbed by the rich and powerful, the people need a form of bartering and I am out of ideas on that.

    Apologies for stream of consciousness blathering, but I just had to say something and the above will have to suffice.

    🙂

  35. Harquebus

    Kaye Lee
    This thread appears to heading toward inactive so, I am posting this for your information only if, you are willing. If not, remove it as I intend to post it elsewhere where, hopefully, it will remain.

    “Economically, it will likely be revealed in terms of stagnating (or falling) real wages, rising costs of living, decreasing discretionary income and decreasing employment opportunities”
    https://medium.com/insurge-intelligence/whats-really-driving-the-global-economic-crisis-is-net-energy-decline-82efb9ca45fe

  36. Kaye Lee

    I started reading it and gave up a few minutes in. After reading hundreds of your links H, I have found it a waste of time. They range between impractical and crackpot. You show no judgement in what you share. It seems you prefer quantity to quality.

    The whole article is predicated on increasing energy demand when we showed in Australia, that demand actually decreased by 8% between June 2009 and February 2015 while the economy continued to grow.

    The thing that you seem totally incapable of understanding is that we are all aware of the challenges facing us. Your neverending warnings are like water torture.

    WE KNOW. Now let’s work on solutions.

  37. Harquebus

    Kaye Lee
    The title says “global” and the academics and others referenced are not crackpots.

    Did you get this far?
    “The hope is that these local movements which have already begun to emerge will network, educate and scale up, as the global crisis intensifies.”
    This is direction that I am going. My small “local movement” is already established.

    It is a very good and informative article that contradicts your opinion. That is all.
    My apologies for bringing it to your attention.

  38. Kaye Lee

    I am assuming that your “local movement” still wants the ambulance and fire brigade and police to still come when needed. I assume they want their children and grandchildren to be educated. I assume they still want to use the internet. I assume the women who are menstruating still want to be able to buy sanitary products. Those who are sexually active still probably want access to contraception. You no doubt still need tools for your move towards subsistence living. I assume you use the sewerage system.

    You, like all of us, are still reliant on our society, yet you pretend you occupy some higher plain that the rest of us can only aspire to.

    It is incumbent upon all of us to reduce our carbon footprint and waste and most of us are actively doing that.

    As usual, you have made this all about your whimsy. Do you have any comment on how, despite rapidly increasing company profits, wages have stagnated? If not then please desist with your hijacking. Write an article on how people can live more sustainably. You have been asked a thousand times to do that.

  39. Roswell

    Kaye Lee
    This thread appears to heading toward inactive so …

    So I’ll make it about me. 😳

  40. diannaart

    Nice one, Roswell

  41. Matters Not

    Here’s today’s offering:

    Whether you self-define as an optimist, a pessimist or something in between, you, your children and grandchildren now face threats on a scale never before seen in human history. Inaction, and denying or burying evidence, will only increase the toll these threats take on us.

    Can only agree. Big problems in the here and now and in the years ahead. But read further:

    Julian Cribb is a science writer and author of “Surviving the 21st Century” (Springer 2017). He is optimistic about the ability of humans to solve our problems

    What’s with this optimism about the ability of humans to solve … Surely that’s not allowed. Apparently Cribb isn’t influenced by H – who knows it all.

    http://johnmenadue.com/julian-cribb-when-optimism-spells-disaster/

    H – Get a life. Perhaps an extra dim sim on this Friday night … ? Be daring!

  42. Harquebus

    Kaye Lee
    Those things will not be available. Sorry and don’t blame me when you have to face that situation. As much as you like to think so, it will not have been my fault. It is not me bringing that situation about. I have spent decades trying to avoid it but, as evidenced by the looming crisis that should be obvious to all and is demonstrated here in microcosm, have had very little success.
    I still use the benefits society offers while they are available but, I am not reliant on them and will get by for a while at least without them.

    Roswell
    If it was only about me, I wouldn’t be here. There are few others that hang out here that I do happen to like. Kaye Lee and diannaart are two even though, they do rile me occasionally and I know that the feeling is not mutual. Miriam and JMS are a couple more and there are a few others. They have good hearts and are worth the effort to try and save.

    Matters Not.
    We can solve problems but, unlike the fiat currency that you are so fond of, we can not create crude oil which, is indispensable for manufacturing and operating things like ambulances and fire trucks.

    Per capita consumption is going to take a hit on both sides of the equation. Not my fault. Get ready.

    Goodnight.

  43. Miriam English

    Everything’s absolutes with H. No shades of anything. All extremes. Difficulties become collapse of civilisation.

    “…oil which, is indispensable for manufacturing and operating things like ambulances and fire trucks”
    Seems to be lacking in memory too — has forgotten about electric vehicles. And before he makes a stupid remark about needing fossil fuels for manufacture, I’ll remind him for the umpteenth time that there is a move away from metal to carbon fibre — it’s lighter and stronger than metal, and safer in accidents. Also, some small use of fossil fuels should always remain. The important thing is to reduce it to a tiny fraction of current use. That will also have the nice side-effect of extending usability for hundreds, possibly thousands of years.

    But H once again diverts the topic away from the article’s point: record profits of business simultaneous with record low wage growth shows up the lies behind the claims of trickle-down economics.

    The fiat currency that H loves to complain about may actually help to solve this. Money is basically a collective delusion, whether it is a precious metal-based one that is easy for wealthy people to monopolise, or a fiat one created out of thin air. The great advantage of a fiat currency is that it can be pegged to the productive capability of society. This makes much more sense than locking it to something utterly irrelevant like the amount of element 79.

    If society guarantees work for those who want it (instead of wasting mountains of human talent in unemployment and underemployment) then productivity goes up, people are paid more, the increased productivity lets more money be added to the economy without the danger of inflation, and we have the chance of wage growth at the bottom of society. Taxing the most wealthy more heavily would help too because that would also make more room to add new money at the bottom of society, again lifting wages and having an equalising effect on society.

  44. Johno

    Miriam as you say.. ‘some small use of fossil fuels should always remain. The important thing is to reduce it to a tiny fraction of current use.’
    I fully agree, which is why the aviation industry is one of the many good places to start. Would it mean a new airport at Badgerys Creek is a waste of money and the construction and operation (more planes) give continued carbon surfeit.

    The Turnbull government will kickstart construction of a second Sydney airport at Badgerys Creek with 5.3 billion public funding. The Australian.

  45. Kaye Lee

    “They have good hearts and are worth the effort to try and save.”

    What pretentious arrogance you display. I will most definitely NOT be looking to you to “save” me H. You are totally bereft of ideas and closed to new knowledge. Excuse me if I prefer to pin my hopes on the experts whose research astonishes me every day.

    “Only a fool knows everything. A wise man knows how little he knows.”

    I don’t dislike you H. I think you mean well but you sure as hell don’t know everything even though you like to think you do and your constant repetition, over and over and over, alienates people who like to learn. Your assumption that we just don’t understand is infuriating.

  46. Michael Taylor

    They have good hearts and are worth the effort to try and save.

    In this new world order, Harquebus decides who is to live and who is to die.

    Now that it has been decided, his work here is done.

  47. Miriam English

    Johno, a better internet reduces the need for travel, but this half-witted government is opposed to good communications. Rich people like to fly so they’ll push that barrow. (I know some poorer people need to too, but better comms would greatly lessen the need.)

    Eventually electric planes will come through — they’ve already begun — but they’ll take a while to get into general circulation. And I must admit I think the demand for flying as mass transit won’t be there.

    If people are dead-set on travelling great distances inside the continent then I’ve always felt that putting highways underground was the best idea. You can use a combination of vacuum to pull and pressure to push capsules along at hypersonic speeds, crossing from Brisbane to Perth (4,300km) in maybe an hour or three. It would be very fast, extremely energy efficient (much more efficient than flying or driving a car), safe, and comfortable, and wouldn’t endanger other animals.

    I always thought I was alone in wanting this. Imagine my surprise to find Elon Musk is working on exactly the same idea, and actually building it. He calls it the Hyperloop and has already built the first section of it in Los Angeles, USA.

    When I was a kid my family used to drive thousands of kilometers to visit far-flung relatives in different Australian states, and also to show us kids many of the most interesting parts of our country. I was always dismayed and heartbroken at the amount of roadkill I saw alongside the highways. I don’t know how many times I was struck by the tragic sight of a forlorn and heartbroken bird standing by its dead mate (most birds partner for life). Putting roads underground would eliminate that horrible waste, would save us energy, and get us where we want to go faster.

    Elon Musk explains that the main obstacle is the cost of boring the tunnels. He has made a number of great improvements in that already. Hopefully soon it may be cheaper to bore a tunnel than to pave over the ground. And much, much cheaper to travel by hyperloop. Your car might also be carried by the hyperloop, so when you exit at the other end you have your own car to continue travelling. That beats air travel in every way.

    I still prefer improved communications though. New advances in virtual reality and augmented reality mean you can appear to be in a room with someone thousands of kilometers away and do so instantly, while remaining in the comfort of your own home. To my mind that beats all forms of travel. But then I’m a hermit, so I would think that. 🙂

  48. Harry

    @Matters not: Under neoliberal ideology, which started to gain traction from the mid 1970’s, governments abandoned the post war commitment to full employment. Privatisations and anti-union laws resulted in a power shift towards employers. Out-sourcing, “free trade” (a race to the bottom), ongoing public spending cuts and a mis-placed faith in the “free market” as leading to the best of all possible worlds, all led to wages lagging labour productivity.

    Unemployment is always a political choice:governments are far from impotent. They can at minimum offer a guaranteed job for everyone who wants to work. This is relatively simple as national governments are not fiscally constrained, they can buy up whatever is for sale in the economy (real resources, not money)

    I would not deny that technological change is a factor but only a factor.

    The way forward is to abandon neoliberal ideology. We live in a society not an economy.

  49. Harquebus

    Michael Taylor
    Why do you twist things that I say?

  50. Michael Taylor

    I doubt very much that I have twisted anything you say.

    But it’s not about you anyway.

  51. Johno

    Thanks Miriam, I was reminded of the pitfalls of aviation with two recent flights returning to Sydney. The planes had to dump fuel over the ocean before landing.

  52. Harquebus

    Michael Taylor
    Then, you are misinterpreting me and it has never been just about me.
    Community is our best bet and this one here is mostly a goodwun. Worth saving.

  53. Michael Taylor

    OK, I’ll change it:

    This post is not about what you want.

  54. Harquebus

    Michael Taylor.
    The continuation of the human race as a functioning civil society and the restoration of the natural world.
    This is what I want and I am sure that all here do as well. Electric cars and MMT ain’t gonna do it. Sorry.

  55. Michael Taylor

    Michael Taylor.
    The continuation of the human race as a functioning civil society and the restoration of the natural world.
    This is what I want and I am sure that all here do as well.

    That’s admirable, and yes, all here agree.

    Now can we please confine it to pertinent posts?

    I’ll correct myself: we will confine it to pertinent posts.

    In other words, your continued derailing of posts is not going to be tolerated.

  56. Kaye Lee

    Getting back to the topic, Crispin Hull wrote an interesting article about introducing an “Australian resident citizenship payment”. Basically he suggests giving every Australian citizen between the ages of 18 and 65 a payment of $15,000 indexed to national income. This would replace all welfare payments except the age pension and the disability pension above $15,000. He rejigs the tax scale – tax rates would increase gradually, going up half a cent in the dollar every $1000 until it topped at 50¢ in the dollar at $100,000 with this upper limit also indexed. The reasoning is compelling and he examines how to pay for it. Have a read.

    http://www.smh.com.au/comment/scrap-welfare-and-pay-everyone-even-the-jobless-a-living-wage-20161208-gt6ob8.html

  57. Michael Taylor

    $15,000 would be lucky to cover a family’s rent. It is also below current income support payments. The country could at least afford to make it $20,000.

  58. Harquebus

    Michael Taylor
    This thread did not appear to be busy so, I put up one link as a source of information for Kaye Lee. That is all. Please forgive me for wanting to share.
    Hijacking was not my intention. As usual, my responses to others is misinterpreted as an attempt to do so.
    Delete any comment of mine as you wish. I have already stated that I will accept authors and moderators decisions in this regard.
    Have a good day.

    Thanks to all who post links. Much appreciated. Following those provided in comment sections of various fora is where I get a lot of my information.

  59. Miriam English

    Kaye, great link! Thank you. It is wonderful to hear the universal basic income idea getting floated more. Crispin Hill covers many of the main objections I’ve heard from people. Very cool.

    One of the things that he didn’t cover is the way creators get the bad end of the stick from most economic systems. Musicians, writers, programmers, inventors, artists, and citizen scientists have a terrible time surviving in the current system, generally dying in poverty — even ones who become famous… usually after they’ve died. A job guarantee would help much of society, but wouldn’t help creators. A universal basic income (or as I prefer to think of it, a share in the nation) would be a great help to our creators. And it looks very much like we are going to desperately need as many creators as we can get in the near future.

    Michael, I agree $20,000 would be a more sensible amount.

  60. Kaye Lee

    I like the idea for many reasons. It would take a lot of pressure off students, allowing them to concentrate on their studies and leaving the part-time jobs for others. It would save a motza on administration costs. No job application obligations, no means testing. Imagine the time saved. So much less form-filling in.

    Increasing the payment to $20,000 would add one third to the cost adding about an extra $66 billion. Hull just used round figures to start the conversation. It would be interesting to see the numbers crunched including his taxation suggestions.

    If we stopped spending hundreds of billions on outdated conventional weapons would help.

  61. diannaart

    Musicians, writers, programmers, inventors, artists, and citizen scientists have a terrible time surviving in the current system

    Applying for Newstart? Some ‘professions’ are not even given as an option, the first excuse is that there are not many jobs available in the creative sector. Try putting down that you are a muso and you will immediately be branded (in the minds of many Centrelink staff) a druggie dole bludger.

    No, people must ascribe to certain jobs in certain categories or face penalties – delay in commencement of benefit being the immediate response.

    Artists are supposed to suffer for their art, right?

    The people who do manage to make a living are far fewer than the “celebratory machine” would suggest.

    A talented athlete has more chance – BUT even then it is not easy for anyone, particularly if female.

    A universal income would make sense and free people to follow their abilities and talents. This would result in even greater cultural diversity. And, yes, there would be a minority of people who would do nothing – they do nothing now; they are costing far less than white collar crime, overpaid CEO’s and the ‘legal’ fraud of tax minimisation.

    Those who are allergic to diversity prefer to amputate others (never themselves) in order to fit the capitalist strait-jacket.

  62. Miriam English

    It really scares me that the current system of overpaying people who are already filthy rich and underpaying those who are barely managing will become a major problem when large-scale automation using artificial intelligence (AI) really hits. As with most things most people won’t really see it until it is upon us, and the politicians will be the very last to know. It has great potential to cause massive dislocation and suffering, which is totally unnecessary because managed correctly (using a reasonable universal basic income) it could deliver something very close to a utopia for us all.

  63. Joseph Carli

    Miriam..The logic should be that if the LNP govt’ can offer interns @ $4./hr , then the private sector with all its innovation and competitive spirit ought to be able to offer interns @$2. / hr.

  64. Miriam English

    But then, I guess we should expect our politicians and corporate heads to be completely inept. As has been pointed out here before, the more you pay someone, the worse their performance becomes:

    https://www.ted.com/talks/dan_pink_on_motivation

  65. Kaye Lee

    Look at Kate Carnell. She has lurched from one disaster to the next yet keeps getting appointed to boards and executive positions. She is a talking head who invariably regurgitates the Liberal Party line. The idea that she should investigate aged care when she was responsible for the department that gave these places a perfect score card is just ridiculous. She has shown no aptitude for independent thought let alone investigation.

  66. Kyran

    Back in 2009;
    “Germany’s lower house of parliament, the Bundestag, on Thursday approved a law which will place restrictions on executive pay. Chancellor Angela Merkel’s coalition of conservatives and Social Democrats (SPD) hope the law will encourage firms to focus on long-term performance rather than short-term gain.
    According to the new rules, board members will only be able to cash in their share options after four years, not after two as at present.”

    Additionally;

    “If management board members are held liable for damage to their firm, they can be made to pay for this out of their own pocket. The figure will total at least ten percent of the damage, but no more than 1.5 times their fixed annual salary.”

    http://www.reuters.com/article/germany-pay-idUSLI6148220090618

    Back in 2014, CEO’s of British companies averaged $6.5 mill salaries (presumably exclusive of their added share options), a pay rate 133 times bigger than their average employee’s income. This was at a time when the EU was trying to cap a CEO’s salary at 12 times the pay of the lowest paid employee.

    http://money.cnn.com/2014/04/09/news/economy/executive-pay-europe/index.html

    It can come as no surprise it never passed muster.
    What good could ever come of expecting a CEO’s salary to be capped at such an absurd level? For goodness sake, they would have to treat their employee’s as something other than a cost of production.
    What good could ever come from restricting a CEO to sell his shares on his departure, rather than four years later, when the cost of his departure becomes apparent?
    What good could ever come of making a CEO financially accountable for his decisions? We’d lose the inherent value of risk taking. That the risk taking is with other people’s money is no more than an unnecessary distraction.

    For goodness sake, we may start making similar demands of our politicians. Clearly untenable.

    If the discussion is to be the merit of who gets what money, the elite must be protected. Notions of raising the minimum tax threshold, universal basic incomes, government support for individuals (as opposed to corporations), job guarantee’s, whatever. Applying the same rules to everyone? Clearly untenable.
    Quick, look over there. Is it a ‘dole cheat’, a ‘terrorist’? Whatever. As long as we keep looking ‘over there’, we’ll never see what is right in front of us.
    “The government is trying to sell us the line that, if businesses make more profit, wages will go up.”
    And how is that going for us?
    Thank you Ms Lee and commenters. Take care

  67. diannaart

    Kyran

    “The government is trying to sell us the line that, if businesses make more profit, wages will go up.”

    Yeah, that works as well as “if penalty rates are lowered, businesses can employ more people”.

    Taking those ‘ideas’ to the bitter end, imagine how wealthy we’d all be if businesses paid no tax, made 100% profit every year and paid employees nothing.

    😛

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