I watched the excellent SBS program Insight last night, which focussed on the cost of living and wages in Australia.
It was confronting, and in a way appalling. On one hand, there were guests who had a combined household income that would leave most of us wondering how they manage to eat. On the other, there were people who were living quite comfortably, and effectively telling those on the lower end of the scale to put up and shut up.
Putting aside all arguments about lifestyles, choices and consumer dilemmas, we’re left with some plain, bare bones principles to chew on:
The cost of living is undoubtedly creeping up. Various guests on the show told the viewing audience that the increase in commodity prices is largely driven by a jump in resource prices – stuff that is mined – due to demand from growing nations. So, due to more global demand, prices for raw materials – like oil – are high. Fair enough? I guess so, if you’re making a mint out of it.
A representative of the organisation ‘employers first’ also laid the blame on increasing wages. But there’s a catch. CEO wages increase vastly faster than those of low-income earners. So, with executive wage increases driving wage inflation, where does that leave those on the breadline? In a world of creeping uncertainty.
For once, the goverment was on the side of good. A resolution to the issue? Two pronged – prong one: Increase the minimum wage. I hear all the economists booing and hissing – but those with memories will recall a decimation of wages and conditions for low-income workers by a recently-ousted government in Australia. And two: give lower income earners an income tax break. Again, more booing and hissing. But consider this: People on low incomes need to own and pay for all their stuff out of their own pockets. There are no company cars or salary sacrifices for production line workers, factory workers or casual hospitality employees. Not to mention, thanks to our recently ousted government, a person making the minimum wage pays the same amount of tax at the supermarket checkout as a person making $100+ an hour.
Fair enough to give low income earners a tax break? I think so.
People on low incomes do the vast majority of heavy lifting in Australia. I like to think of it this way, in any business:
If the CEO disappears for a month and isn’t replaces, nobody really notices. If the toilet cleaner disappears and isn’t replaced, its a disaster. Who is more important to the business?
I hope that our current government is strong enough to stand by its support of the working majority, and to stand against the inane ravings of economic dogmatists.