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Two-Tier Wage System?

18 Sep

As you can see on this link, the US is looking to reinvigorate its depressed jobs market by allowing the Big 3 car makers to employ new workers for $14.00 per hour, whilst veteran workers earn twice that amount. Even at this rate, employers received 100,000 applications.

Australia has wage issues of its own. The mining boom (with all of its attached wage rise complications) has drawn some of the best talent to work in rural Australia, whilst sapping the balance of the economy of labour. Wages in many fields have risen, although manufacturing jobs have been steadily going by the wayside.

Instead of a rise in unemployment, all we are going to see is a shift in the patterns of employment. Mining is going to be the major beneficiary, yet wages will not shift at all, even after the influx of new miners.

The question still remains, of how someone earning $560.00 per week can afford to look after a family. I am not fully aware of the total cost of living in Michigan but I’m sure that making ends meet would be hard at that income level. Still, beggars can’t be choosers.

Matching Output With Demand

28 Aug

Significant Australian steel manufacturer (and All Torque Transmissions customer), Bluescope, has recently announced 1000 job losses across its Australian manufacturing operations. As usual, the strength of the Australian dollar has made the price of exported product prohibitive.

This news comes fresh on the heels of manufacturing job losses at Heinz, SPC and Ford, where reaching a shutdown decision was made easier by the lack of international demand. All three are also All Torque customers.

Economists the world over sing the praises of an economy that expolits what it is good at, whilst less efficient industries shrivel up and die. In this sense, comparative advantage is a relative term, as Australia enjoys a virtual resource monopoly on much of what it has.

Economists are also quick to point out that consumers value variety and are willing to pay for it. As each Australian manufacturer becomes a ‘former Australian manufacturer’, that variety is being continually and quickly eroded.

Luckily, Australia’s poor mining fraternity lobbied the Australian government for a lesser mining super profits tax, so the sharholders can sleep well at night.