In mid-1983, Michael Foot led the British Labour Party to a disastrous general election loss. The party, already in opposition, lost 60 seats in a 9.3% swing against it. Labour barely scraped into second place ahead of the SDP-Liberal alliance, with just 27.6% of the vote. Foot’s economically interventionist manifesto and socialist rhetoric were blamed for the scale of the loss.
Imagine that it’s grand final day, only rather than being the massive television spectacle we’re accustomed to, no cameras or journalists are allowed inside the MCG. No spectators are allowed to communicate the score with anyone outside the ground.
How would we know if we were having a wages breakout? Back in the 70s, there was a period in which wages rose faster than productivity, leaving a situation that some economists dubbed a “real wage overhang”. This, I believe, is what people are talking about when they warn of a “breakout” – an inflationary burst of wages growth well in excess of productivity growth.
I can understand why libertarians might favour a flat tax on superannuation contributions and on ordinary income. I disagree vehemently with that position, but it’s logically coherent to me. Personally, I favour a progressive tax on both of those things, and I think that position also makes sense.
Today, Barack Obama announced his intention to push for the US federal minimum wage to be lifted to $9 per hour by 2015, and then indexed to inflation.
In late 2010, we set an all-time record for the Australian economy: nearly 66% of people aged 15 and over were either employed, or were actively looking for work. To put that in perspective, the labour force participation rate has averaged 63.2% since 1980.
Imagine that there’s one source of carbohydrates – potatoes – and that everyone needs to eat carbs at least once a day. In this hypothetical scenario, there are three types of potato: kipfler, desiree, and regular. Kipflers are expensive and not that common, whereas regular potatoes are cheap and plentiful. Desirees are somewhere in the middle.
My last post consisted of the sort of Sisyphean snark about The Australian that I’d like to cut back on, but can’t resist writing. I was a little taken aback that the same paper that labelled a modest trim to family payments for high-income households as ‘class warfare’ would unashamedly lament that ”the old principle that welfare should exist only for those who genuinely need it appears no longer to hold.”
The Australian editorial, 11 January 2013:
You might remember that in late 2010, we were warned repeatedly that Australia was facing a ‘wages breakout’.