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Ultra low wage growth isnít accidental. It is the intended outcome of government policies

TJ Ryan Foundation Board member, John Quiggin, writes in The Conversation (18.3.19) about an inadvertent 'admission' by Finance Minister, Mathias Cormann, that the government has been deliberately trying to supress wages.

'The long debate over the causes of wage stagnation took an unexpected turn last week, when Finance Minister Matthias Cormann described (downward) flexibility in the rate of wage growth as "a deliberate design feature of our economic architecture".

'It was a position that was endorsed in a flurry of confusion 16 seconds after it had been rejected by Defence Industry Minister Linda Reynolds.

'Cormann had said policies aimed at pushing wages up could cause "massive spikes in unemployment".

'The ease with which Reynolds was trapped into at first rejecting and then accepting what her ministerial colleague had said flowed from the fact that Cormann had broken one of the standing conventions of politics in Australia, and for that matter, the English-speaking world.

'For more than forty years, both the architecture of labour market regulation and the discretionary choices of governments have been designed with the precise objective of holding wages down.

'These policies have been quite successful.'

 

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