Edited 10 Sep 2017 18:18, 4 years ago, edited by don_dunstan

Wages are probably going to remain quite stagnant for the foreseeable future due to the continuing influx of immigrants, which increases competition for available jobs, thereby putting downward pressure on the price of labour.

With a surplus of labour, it's an employer's market. Add to that weak, highly-regulated and restricted unions with low membership density, and it's a perfect environment for employers to minimize wages and conditions while maximizing profits. The only trouble is, many, and I'd say a growing number, of consumers - recipients of stagnant wages - are struggling to spend on anything non-essential, let alone save. All the more reason to keep bringing more immigrants in, because it increases the pool of consumers and cheap labour, offsetting their reduced spending capacity. Looks like a race to the bottom. Who cares if everyone else's standard of living falls slightly as a result? Not the business owners.

Stagnant or falling wages are a symptom of a very unhealthy economy - Morrison won't acknowledge this but in an economy geared towards borrowing exponential amounts of money for more housing and consumption any contraction in the capacity of the public to pay their bills is going to have a knock-on affect ultimately though to the banking system because even though your wages might be going down your mortgage or rent certainly won't. Things seem quite rosy so long as those interest rates stay stuck at "emergency" post-war lows but even then we have quite high mortgage arrears emerging in places like Mandurah/Clarkson WA and Ballarat/Craigieburn/Cranbourne VIC where the suburban growth has been highest in the last ten years. As you say the dominant school of thought since 2003 has been to simply keep immigration levels at historically unprecedented levels but ultimately if wages keep falling it will probably precipitate a credit squeeze in response to all the bad loans and at that point I think the whole thing will unravel.

We're at the end stage of over 30 years of war on the working class initiated by Hawke and Keating with their one-sided "Accord" - under a so-called Labor government corporate profits skyrocketed in the mid-eighties while workers were left behind. It's inevitable that with almost no unions left in the private sector (less than 10% coverage) and a mass-migration program bringing hundreds of thousands of new entrants every year that the labour market is going to continue to get harder and that wages will continue to free-fall.

Incidentally I don't think there's any way the government could possibly make good on their covered bond guarantee to the Big Four Banks unless they either raided the super funds or printed money like crazy leading to an inflationary spiral; there are over 1 trillion $AU in liabilities the banks hold in Aussie mortgage markets - the Commonwealth government simply doesn't have that much money. Even if only a third of mortgages went delinquent that's still around $300,000,000,000 they'd need.