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19:32
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Originally posted by prawn_man:
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Amigo, there are plenty of questions to ponder and I think wage inflation is the least of Australia's worries. My reasons are as follows. In 2021 we are seeing a welcome improvement in the jobless rate, but many businesses were lost in 2020 which means that many workers are now taking up new jobs at lower rates of pay. And that is after about ten years of stagnant wage growth. Hence we are effectively experiencing wage deflation. The sum total for Australia of money printing and decades of policy based on the housing sector, is asset inflation and wage deflation. Once interest rates start to rise, which must happen within a few years, the people (and the economy) will be struggling because of the massive public and private debt that has accrued. How will business grow when the government stimulus is gone? Who will have "animal spirit"? And who is going to be keen to spend money on goods and services under those conditions? Also, for how long will the economy be supported by record iron ore prices? China could pull the plug as soon as Brazil starts producing again. So why is the government taunting China in a way that is similar to the way Abbott/Hockey taunted the Australian-based car manufacturers? Is this a type of madness or what? OK enough with the questions. IMO Australia has been riding on the mining sector for decades, and the other major industries have depended on migration and overseas student education. Once tourism, overseas visitors, wage deflation and asset inflation start to really take a grip on the economy, we'll see the toll that comes from 25 years of wage deflation, lack of training of Australia's young people at TAFEs and so called free-trade agreements in un-level playing fields. (By the way, I love reading this forum and thank you to everyone for all the great comments and information.)
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I think we'll see unemployment rise again now that jobkeeper is over.
(20min delay)