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Last updated October 3rd, 2015
Over the last 30 years we have seen a massive transference of wealth from the working and middle classes to the top echelon of Society. An Australian on the average wage now earns 30% less in real terms than they did 30 years ago. In the USA this figure is worse, the bottom 45% of the population has gone backward by 45% in the last 30 years.
Where has this money gone? Our economy is larger than it was 30 years ago in real terms, we should be better off, not worse.
The answer to this riddle is in the share of wealth going into the top .1% of the population.
Here is a simple example to illustrate this.
In 1985 an adult Shop Assistant earned $14,500. The General Manager of Coles (Australia's largest supermarket chain) earned $850,000. Now lets fast forward 30 years. If the income of the boss at Coles simply kept pace with inflation his income would be $2.2 million. In 2013-14 his income was actually $5.5 million. So not only has his income kept pace with inflation, it has doubled over and above that. Now if Coles Management passed on the same wage increase to their staff as they gave themselves a Shop Assistant in 2015 would be earning $92,000 a year. They do not earn that. Those pay rises are reserved for the Aristocracy and their lapdogs, not the workers. In 2015 what would a Shop Assistant be earning if their wages just kept pace with inflation over the last 30 years? The answer - $42,500. Are they earning $42,500? No they are not. In 2015 the award for an adult Shop Assistant is just $24,500 per annum.
That is not even taking into account the fact that housing is 3 times more expensive, university degrees were free back then and now cost 2 years salary for a shop assistant, electricity is up well ahead of inflation and so it goes.
Over the last 25 years the median house price in Australia has gone from 2 years salary to 4 years salary - that is a doubling of housing costs. From the Reserve Bank:
It is significant to note that in the United States this figure has not changed in the same time frame. There is no reason for this increase other than a reduction in housing stock caused by the massive level of Immigration caused by the Labor Government, combined with the massive degradation in the value of the median wage of the people.
The situation is even worse when you look at the last 100 years:
2. Income Inequality
Partly this is housing going up, and partly this is incomes going down. From The Eureka Report:
And full time, breadwinner jobs are now in the minority in the Australian Economy:
Combined with record low interest rates on savings, it now takes 14 years on average to save a housing deposit:
When I was young full employment was considered to be 1%. I remember the McMahon Government was heavily criticised in the media in the leadup to the 1972 election campaign because unemployment hit 2%. It was a large factor in his loss. Now it is 6%, and that figure is itself nonsense. In Australia if you work for more than 1 hour a week you are considered to be employed. One hour. The Howard/Costello Government was responsible for that piece of stat rigging.
Most economists tend to talk about full employment now as being in the 4% - 5% range. That is not derived from what is fair to workers, it is derived from what is fair to employers. At the 5% mark there is competition between workers for jobs that suppresses demands for wages and conditions. 5% is that sweet spot between workers having any power at all and social unrest. The controlled media can sell 5%, but no more.
So the Aristocrats and their servants simply rig the stats. When someone who wants a job gives up looking they are no longer unemployed, so unemployment falls. Under this system you can have 0% of people in jobs but also 0% unemployment. Here is an article that explains it in more detail:
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