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All very good points! We've had wage stagnation for ~15 years. I've long wondered what it is about our job market that keeps wages down whilst company profits

All very good points! We've had wage stagnation for ~15 years. I've long wondered what it is about our job market that keeps wages down whilst company profits continue to grow. Perhaps an unspoken collusion around wages, or maybe lack of salary growth in government jobs that in turn pushes the private sector. Lack of competition and choices is another issue, as is Australia's dispersion of cities. It's not straight forward for someone in Adelaide to take a job in Sydney that pays more. Workforce mobility certainly pays a part. When I lived in the UK, I took it for granted that you could commute to another major economic City for work, especially in the South. Because of wage stagnation, I see a major debt crises looming with BNPL and its old friend the credit card. It's a house of cards. Taking on more BNPL debt that is serviced with credit-cards is going to become a huge problem for Australians. I see a lot of people in my community that appear to be doing OK, but with mortgages that gone up over $1000 a month. People have little savings and live month to month, spending everything they have. Changing lifestyle and spending patterns doesnt come easily to people, and I see it as the slow boiling frog problem. They'll maintain their current lifestyles because they dont realise the spending and credit problem they have. Where is the extra money coming from to service their mortgages? Well, it's credit cards and BNPL. Which will slowly grow until they are in trouble. Maxed out limits on multiple BNPL schemes backed by multiple maxed out credit cards is going to create crippling debt levels. It may take 18 months to manifest, but I'm sure it will. I already know that many people in my community carry credit card debt month-to-month and I cant see how this is going to improve. It's not just those with Mortgages that are in trouble. Renters will be in serious trouble too as all those investment property mortgages have gone up too. Which means huge increases in weekly rents are starting to appear. The Australian subreddits are filled with irate renters. Just getting my thoughts down, and anything could happen I guess! :-)

chrishare 4y ago
Indeed. Basic finance sure would be a great addition to the high-school curriculum.
chii 4y ago
> It's not straight forward for someone in Adelaide to take a job in Sydney that pays more why isn't it straight forward? There's nothing stopping someone from interviewing (let's say, remotely) and accept a job in sydney while in adelaide, and then move when they secured the offer. There's some moving costs - but i would imagine it's going to be in the order of about 1-2 months of rent at most. Of course, if you have kids, with school and such, then you'd have a harder time.
Khaine 4y ago
Immigration is keeping wages down, and continues to do so. It is also putting immense pressure on the rental market. Want to improve the lives of ordinary Australians? Reduce immigration levels.
- tallytarik 4y ago
  Can you explain how you arrived at that conclusion?
  - Khaine 4y ago
    Common sense. Employees can import foreign labour which has the effect of putting downward pressure on wages. Hence why wage inflation has stalled since COVID restrictions have been eased. And in terms of rental market, it has been widely reported. Westpac has forecast that Australian rents will continue to hyper inflate until mid-2024 because of soaring international migration. Westpac Business and St George senior economist Pat Bustamante warned the current rental inflation was likely to be longer and more severe than the prior cycles because demand via immigration was vastly outpacing supply. “Given the current supply and demand dynamics, and the lag in supply, the peak would likely take longer than people expect”, Bustamante told The AFR. “The return of migrants and international students… [is] putting a further strain on the rental market”. [1] People don't dare say reduce immigration because then you get called racist. [1] https://www.macrobusiness.com.au/2023/02/westpac-migration-surge-delivers-record-rent-increases/ https://www.macrobusiness.com.au/2023/02/westpac-migration-s...
    - landswipe 4y ago
      'Employers', but I agree. The thing is, rental inflation is going to cause the property market to go pop... You can see it a mile away.
      - brokenmachine 4y ago
        What will be the effects when that happens?
Atsuii 4y ago
I don't feel as though the conclusion is unspoken. The government specifically and clearly sets out to keep wages suppressed by the number of 'skilled' and 'unskilled' visas it approves. Meanwhile we have the lowest vacancy rates ever and the rate in which we are building homes is still out stripped by immigration. You raise a really good rate with the lack of workforce mobility. From outside Australia it is probably really hard to understand how immobile our workforce is considering how large the country is. The governments at both a federal and state level seem to be very keen on ensuring the professional working class who could be remote stay immobile putting greater pressure on cost of livings in centralised cities.
BLKNSLVR 4y ago
Only anecdotal, but a friend of mine in Adelaide is having his rent increased 30% as of April. Thirty percent! Understandably he's looking to move and buy because fuck being beholden to that kind of bullshit ever.

chrishare 4y ago

Indeed. Basic finance sure would be a great addition to the high-school curriculum.

chii 4y ago

> It's not straight forward for someone in Adelaide to take a job in Sydney that pays more why isn't it straight forward? There's nothing stopping someone from interviewing (let's say, remotely) and accept a job in sydney while in adelaide, and then move when they secured the offer. There's some moving costs - but i would imagine it's going to be in the order of about 1-2 months of rent at most. Of course, if you have kids, with school and such, then you'd have a harder time.

Khaine 4y ago

Immigration is keeping wages down, and continues to do so. It is also putting immense pressure on the rental market. Want to improve the lives of ordinary Australians? Reduce immigration levels.

tallytarik 4y ago
Can you explain how you arrived at that conclusion?
- Khaine 4y ago
  Common sense. Employees can import foreign labour which has the effect of putting downward pressure on wages. Hence why wage inflation has stalled since COVID restrictions have been eased. And in terms of rental market, it has been widely reported. Westpac has forecast that Australian rents will continue to hyper inflate until mid-2024 because of soaring international migration. Westpac Business and St George senior economist Pat Bustamante warned the current rental inflation was likely to be longer and more severe than the prior cycles because demand via immigration was vastly outpacing supply. “Given the current supply and demand dynamics, and the lag in supply, the peak would likely take longer than people expect”, Bustamante told The AFR. “The return of migrants and international students… [is] putting a further strain on the rental market”. [1] People don't dare say reduce immigration because then you get called racist. [1] https://www.macrobusiness.com.au/2023/02/westpac-migration-surge-delivers-record-rent-increases/ https://www.macrobusiness.com.au/2023/02/westpac-migration-s...
  - landswipe 4y ago
    'Employers', but I agree. The thing is, rental inflation is going to cause the property market to go pop... You can see it a mile away.
    - brokenmachine 4y ago
      What will be the effects when that happens?

Atsuii 4y ago

I don't feel as though the conclusion is unspoken. The government specifically and clearly sets out to keep wages suppressed by the number of 'skilled' and 'unskilled' visas it approves. Meanwhile we have the lowest vacancy rates ever and the rate in which we are building homes is still out stripped by immigration. You raise a really good rate with the lack of workforce mobility. From outside Australia it is probably really hard to understand how immobile our workforce is considering how large the country is. The governments at both a federal and state level seem to be very keen on ensuring the professional working class who could be remote stay immobile putting greater pressure on cost of livings in centralised cities.

BLKNSLVR 4y ago

Only anecdotal, but a friend of mine in Adelaide is having his rent increased 30% as of April. Thirty percent! Understandably he's looking to move and buy because fuck being beholden to that kind of bullshit ever.