THE PRELIMINARY ESTIMATE of net migration in calendar 2022 hit a new record of 386,970. In the 12 months to March 2023, another new record was set at 454,400. Media commentary criticising the Albanese Government for allowing this level of net migration is currently focused on the impact on the housing crisis and on a per capita recession.
Centrist and right-wing economists continue to advocate for laying off workers and engineering a recession to address inflation. But why not set commodity price controls instead?
The Reserve Bank is blaming our soaring inflation on wage pressure, whereas economists argue the real reason is excess corporate profits. Dr Evan Jones reports.
When was the last time you got a pay increase? Was it anywhere near the rate of inflation?
If it feels as if your wage is shrinking and cost of living pressures are growing, you’re in good company. And it might just be harming productivity. Here’s why.
While debate rages as to whether a 5.75 per cent pay rise for workers on award wages will be inflationary, a new report reveals the nation’s big business leaders received an average 15 per cent base pay rise.
What the Reserve Bank in Australia ignores is a failure to recognize the facts
“Their goal is to put a chill on borrowing and spending,” it wrote of the bank, noting that the strategy “will throw people out of jobs and make workers insecure enough to stop asking for raises — even if it plunges the country into a recession.” It argued that the bank was focused on blaming workers. As indeed the bank was. So were pundits, bank economists, and right-wing politicians. According to the yarn they spun, because higher labor costs drive up prices, it is workers’ share of the economic pie that is the problem. And, of course, on this view, government spending was making things worse.
Part of the battle for a better world, then, is to shape the mainstream reality in such a way that recognizes basic facts that are inconvenient for the capitalist class. Those facts include, for instance, the empirically verifiable point that corporate profits and central bank interest rate hikes are sending housing costs up, crushing people and, you guessed it, driving inflation.
The Reserve Bank of Australia has raised interest rates again, ostensibly to keep inflation in check. But the reality is that the move will only enrich banks and rich property investors — at the expense of renters and struggling mortgage holders.
Because they are so low-paid, and mainly part-time, these people account for only about 11 per cent of the nation’s total wage bill. So, as the commission says, the pay rise ‘‘will make only a modest contribution to total wages growth in 2023-24 and will consequently not cause or contribute to any wage-spiral’’.
But that’s not the impression you’d get from all the wailing and gnashing of teeth by the main employer group, the Australian Chamber of Commerce and Industry. It claims ‘‘an arbitrary increase of this magnitude consigns Australia to high inflation, mounting interest rates and fewer jobs’’.
For the last year, media pundits have insisted that today’s inflation has nothing to do with corporate profiteering, much to the delight of the capitalist class. It is more than clear now that they were wrong.
Why aren’t priced falling they would if Corporations were socially responsible
Whether eggs, flour, or baby formula, the household goods that have seen some of the steepest price increases and majorly squeezed average Americans have also made their manufacturers incredible amounts of profit.
Despite the grilling he got in two separate parliamentary hearings last week, Reserve Bank governor Dr Philip Lowe’s explanation of why he was preparing mortgage borrowers for yet further interest rate increases didn’t quite add up. There seemed to be something he wasn’t telling us – and I think I know what it was.
The higher the world’s central banks lift interest rates, and the more they risk pushing us into recession, the more our smarter economists are thinking there has to be a better way to control inflation.
But there’s now evidence companies are raising their prices over and above the increase in those costs.
“There’s no doubt that corporations have taken advantage of the supply chain problems and the desperation of consumers to jack up prices far more than required to cover their own costs, and their record profits have made this inflation far worse,” economist Jim Stanford, from the Centre for Future Work, told The Drum.
Workers need a $7000 pay packet boost to keep up with the soaring cost of living.
Canstar analysis shows the average worker earning $92,030 would need a $7178 increase in annual income to keep pace with inflation, which rose 7.8 per cent annually in the December quarter.
Dan Andrews wants a State-run SEC to compete with private corporate gougers. Matthew Guy doesn’t his donors are the gougers and don’t want State control. Australians want an Australian ABC the LNP don’t their donors don’t want to be questioned, examined or held to account.
We can do this exercise with Health, Education, Jobs, Housing and welfare the LNP says privatisation is best for everyone. Well, we have had decades to see it doesn’t work. Decades to see that Dan Andrews made Victoria the best state in the country. Far better than when Matthew Guy was the Planning Minister for scandals
Key points:
One factor pushing inflation is companies making high profits
The rate of profit growth has vastly out-paced wage growth
Inflation reduces the purchasing power of wage earners
Soaring corporate profits are being blamed for fuelling inflation, as figures show companies in Australia are enjoying sky-rocketing profits despite the pandemic.
Most of us don’t have paychecks that automatically increase to cover the rapidly-increasing costs of just about everything. As a result, inflation is making most of us poorer.
The CEO of Iron Mountain Inc. told Wall Street analysts at a September 20 investor event that the high levels of inflation of the past several years had helped the company increase its margins — and that for that reason he had long been “doing my inflation dance praying for inflation.”
Because what he can’t admit is that inflation won’t fall back to the target range of 2 to 3 per cent until the nation’s businesses decide to moderate their price rises. And they’re not likely to do that until those rises reach the point where they’re driving away customers.
Inflation isn’t problem for all Australians the widening wealth and income gap is
The average income across the nation’s richest postcode soared beyond $300,000 for the first time as residents of Cottesloe and Peppermint Grove in Perth’s western suburbs enjoyed an 81 per cent increase in earnings – and during a recession.
As Australia looks down the barrel of an inflation rate close to eight per cent this year, borrowers and investors are wondering how much further official interest rates will rise.
The current state of inflation is not domestic. It’s not wages, It’s global and driven by energy pricing greed. It’s Capitalist profit taking advantage and it needs to be stopped in it’s tracks. If the fossil fuel companies had been taxed and profits shared via royalties and higher wages inflation wouldn’t seem such a problem. The Reserve Bank raising interest rates won’t stop it. It’s global and Multinational Global Corporations are causing the price tsunami for their benefit alone.
If you own a car, pay energy bills, or buy groceries, then you have probably noticed that prices are soaring. The cost of food is up 10% and the cost of a gallon of gas is up 50% from a year ago. And in May this year, median monthly rent hit a record high at $2,002. We’re experiencing the highest levels of inflation in 40 years, which is taking a particularly harsh toll on low-income households.
I’m no economist but neither am I a fool. When somebody tells me that inflation has taken off in Australia and that the cause is largely due to an escalation in the prices of goods and services driven by wage and salary increases and the costs of production I start to take interest.
For a start it can’t be spiralling wages as they have been stuck in the doldrums for years while corporate profits have surged and executive bonuses have ballooned. So we need to look elsewhere.
Rising profits levels among the Australian corporate sector have been identified as one of the key causes for increasing inflation levels across the country, a new report has shown.
Employment Minister Tony Burke does not believe wages growth is about to further fuel inflation, saying pay rates have suffered a decade of stagnation.
Roosevelt would have relished the fight and going big. But Biden and the Democrats now seem intent on going small — so “smol” and petite and inoffensive that no one notices or gets mad at them. One especially dispiriting example of this that Kuttner does not address in the book, but has elsewhere, is inflation. The Biden administration could have gone on the offensive and made the case that inflation is being driven by supply chain issues, corporate price-gouging, and Saudi Arabia’s crown prince — as opposed to rising wages and government spending — but instead has largely settled into a silent defensive crouch. Now Jerome Powell, the chair of the Federal Reserve reappointed by Biden, is saying that the Fed’s policy is to “get wages down,” something Americans will enjoy even less than inflation.
Federal Reserve chairman Jerome Powell plans to address sky-high inflation by hiking interest rates — acknowledging that doing so will suppress wages and worker power. It’s a response that will force workers to bear the brunt of the inflation crisis.
Inflation is now at a 40-year high after the consumer prices index rose to 9 per cent in April, according to the latest ONS figures. That’s the sharpest jump since 1982, which, as Torsten Bell of the Resolution Foundation pointed out, means much of the country has never experienced an inflationary shock of this ferocity “in their working lives”.
With inflation on the rise, Australian unions are calling for a modest pay increase for minimum-wage workers. The government, backed by bosses and bankers, says such a move will increase inflation, but the truth is they just don’t want to pay.
The war over wages has become central to public debate in the lead-up to the Federal Election, with Albanese advocating real wages could rise alongside productivity growth, writes Graham White.
In the final analysis the economy makes so much wealth; and the question is one of distribution, as well as higher productivity; and industry policy encouraging high wage industries. Increasing the size of the cake is good – but does not solve all problems. At some point we need to confront the question of who gets what share of the cake; and this will require redistribution. Sometimes it’s possible to have ‘win-win’ – but not always. We cannot become a US style economy where workers are disciplined by fear of destitution; and where the living standards of a so-called ‘middle-class’ depend on the exploitation of the working poor.
Inflation has risen to 5.1%, according to the latest figures from the ABS. The 5.1% annual consumer price index (CPI) figure for the last quarter was above market expectations of 4.6%. According to economist Richard Dennis, this is roughly twice the rate of real wage growth across the economy leading to the worst real pay cut for workers this century. According to Michele O’Neil the president of the ACTU this represents a pay cut of nearly $2000 in the first half of this year. Trimmed mean inflation used by the central bank to set rates, which ignores volatile changes, rose to 3.7% which is above the RBA’s target range.
When the history of this horror is written, NATO and Joe Biden will get enormous credit as well. Their steady hands and steadfast strategy appear to be working. Patience, tenacity, and careful use of every tool available to them — short of putting NATO or American troops into Ukraine — is turning the tide. We have no way of knowing how this will turn out (and I continue to fear what a cornered Putin may resort to), but the courage and intelligence of Ukraine, NATO, and Biden deserve our commendation and thanks.
More inflation buzz today. The U.S. consumer price index for January is expected to have risen 0.5% — culminating in an annual rise of 7.3%, which would be the largest such increase since 1982. Yes, prices are increasing. But would you prefer a recession? As a practical matter, that’s the choice the Fed gives us. When the Fed puts on the brakes, it often pushes the economy into a ditch. A recession will cause far more hardship for many more Americans than inflation is now causing.
Today’s inflation isn’t just caused by a post-pandemic rebound in fuel prices, but a long-term exhaustion of oil production. We need to end our dependency on fossil fuels without it becoming the pretext for another wave of austerity.
Scott Morrison’s latest scare campaign claims interest rates and inflation will be worse under Labor than the Coalition, but the historical data refutes that, writes Alan Austin.
You’re hearing a lot about inflation these days. Don’t buy it. Every time the economy gets a bit of wind in its sails and workers get a little wage increase, conservatives scream about inflation and price increases.
olddogthoughts 
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