Productivity

Today, the financial paper is full of chatter on the subject of ‘productivity’. Business wants an increase in profits via gains in productivity, which has apparently been going backwards in Australia for sometime (as measured by who exactly?). This can’t happen unless government allows either a decrease in real wages or reduced regulatory costs, allowing the use of less labour. And of course our corporates couldn’t simply seek growth into foreign markets, now could they?

The high regulatory burden is how we keep people employed in Australia, so that won’t change. The only politically acceptable way to decrease wages is to increase inflation, which would be achieved by printing money and lowering our dollar, which would also enhance exports directly.

My novel answer to the political issue of reduced wages, and therefore also consumption and corporate revenues, is to pay people the lost income via shares, so they claw back their wage losses via gains in share prices. Otherwise this is all just an exercise in wealth transfer in Club Australia. Duh.

Whatever happens, taxes have to go up in the short-term to pay off the higher foreign debt burden.

Lurking behind all this is a desire for the ready availability of low-cost servants. I found this out by accident one drunken night in talking to a bunch of lawyers, after I had reduced their arguments to the core. Stripping away all the BS they simply want two distinct classes of people no matter what the cost to the economy.