500000 jobs gone ... Media useless

[octave]

No body sensible is suggesting it... More to the point are you convinced that you are twice as productive as your US counterpart doing the same job.... If not, then who do you suggest loses their job so that we can pay you twice as much?

ah I see, if we cut our wages to US standards then we could have a similar unemployment rate and per head debt as the US ...... great ..... oh wait

 

 

[Gnarly Gnu]

ah I see, if we cut our wages to US standards then we could have a similar unemployment rate and per head debt as the US ...... great ..... oh wait

Not so bad. US wages are worth almost double ours as their housing / cars / food costs are so much lower, our true unemployment rate is very similar to the US (see Roy Morgan) and govt debt per head is approaching the same when you add up in local / state / federal... not to mention private debt is so much higher here largely due to the cost of our housing bubble.

 

 

[M61A1]

The relationship between the unions and the quality of maintenance is simply that Australian maintainers need to be able to live in the cost-structure that exists here. If someone can come up with validated figures that Australian maintainers are paid a disproportionate salary to their level of competence, I'm happy to yield the field and retire. Your car mechanic is currently costing you something like $65/hour on average- what is a Qantas maintainer being paid? Do any of us on this forum actually have quantitative figures on the average cost/hour for an Australian Qantas maintenance staff position?

What I'm suggesting, particularly in relation to Qantas, is that they could probably do the same job with less staff, or do the same job in a shorter timeframe with the same staff, I know, as a maintainer that wages are not particularly high, but they're not very productive compared to other maintainers I've had to deal with. A few ex Qantas people have crept into our maintenance organisation, they are well known for doing bugger all and taking a long time to do it, and then threatening with "going to the union", should someone take them to task about their lack of productivity.

Unions have nothing to do with the high maintenance standard.

 

 

[octave]

Not so bad. US wages are worth almost double ours as their housing / cars / food costs are so much lower

Medical expenses? working poor etc? I am open minded on this subject but perhaps you could provide some facts and figures. my understanding is the the US economy has been struggling over the last few years. I have never been a member of a union and I have been self employed for the last 24 years, I don't begrudge workers receiving good wages because these workers are also my customers, cut wages cut my customers.

 

 

[Oscar]

ah I see, if we cut our wages to US standards then we could have a similar unemployment rate and per head debt as the US ...... great ..... oh wait

It gets better! (and with a set of steak knives). If we don't improve management skills but simply cut wages to Chinese standards - let alone US standards - we might be able to produce an LSA aircraft for about three times the current price of our home-grown bottom-line product. It won't be quite as good, but it WILL be made with cheap labour!

 

 

[DrZoos]

Medical expenses? working poor etc? I am open minded on this subject but perhaps you could provide some facts and figures. my understanding is the the US economy has been struggling over the last few years. I have never been a member of a union and I have been self employed for the last 24 years, I don't begrudge workers receiving good wages because these workers are also my customers, cut wages cut my customers.

Share the pain a little bit for all and make it shallow, or wait till it bites hard and deep.....take your pick....

 

Holden gone, ford gone, Toyota gone, Telstra slashed, forge group gone, qantas 5000 and prob another 5000 in 12 months, virgin huge loss actually bigger as a percent of revenue then qantas, Rex profit down 60 %, Rio has reduced capex investment by 65%, bhp by 70%, atlas at gladston shelved, even Shell is pulling out of australia. SPC about to shut. 22000 jobs last month alone...

 

Australia now has 722,000 people out of work - 45 per cent more than at the start of the global financial crisis.

 

The unemployment rate, which rose 0.1 percentage points to 5.8 per cent in December, only remained stable because thousands more Australians gave up the search for work last month. and many took less hours.

 

We just had the earnings season avalanche on the asx, and 54% of companies beat expectations, but most did so by slashing staff and investment, not by boosting sales or revenue. And they will continue to do so until wages are competitive. Likewise foreign investment is plummeting, because its not cost effective to do anything in Australia.

 

The dollar is down 14% in 12 months. Every leading indicator is saying Trouble.....

 

Yet the aussie mentality says im not taking a pay cut, it wont affect me.....sorry but it will....the point is lets be proactive and manage it better then the 50+ countries it just happened to before us

 

 

[pmccarthy]

So we need high minimum wages because we have high costs? Why do you think a house costs so much here? Or getting your car fixed? Or a meal in a restaurant? It the wages! Why is that so hard to understand?

 

 

[DrZoos]

Ok so lets give 10 million people $10 extra per week. Thats 100 million worth of costs per week just been added to everyones life. But then we pay 20% plus tax and the 10% gst on everything we spend. So our costs just went up by 100 million per week. But the employees nly get to keep around 70% of that because 30 % goes tot he govt who now distributes it how they wish...

 

So tell me how higher wages are good. They send jobs overseas, it kills foriegn investment and we actually end up with less spending power....

 

Economics 101 higher wages are bad for all except the tax collector.

 

 

[bexrbetter]

That either means.

Here's a reminder of how many of them are in the sky at any one time, around 5000 or so ......

 

 

It means what I said, no other, the planes are not falling out of the skies so you waste your time driving around in your car paranoid and I'll continue to fly.

 

 

[Dafydd Llewellyn]

So we need high minimum wages because we have high costs? Why do you think a house costs so much here? Or getting your car fixed? Or a meal in a restaurant? It the wages! Why is that so hard to understand?

Or maybe we need to get off the never-never and negative gearing bit, and generally abandon the borrowed-money merry-go-round. My wife and I purchased a default-of-rates 5 acre block in the western outskirts of Sydney, and looked at a project home after we were first married - and decided to build our own. It meant living in a Nissen Hut that we purchased from the Cabramatta migrant settlement for $ 200, for about five years. So we never got into the great debt cycle. We buy second-hand cars and overhaul them ourselves. We operate hand-to-mouth, pretty much, and avoid going into debt. Our life-style isn't flashy; but it suits us; it allowed us to get ahead, instead of paying interest to a lending institution. When I wanted a little sailing dingy, whilst we lived in Sydney, I built it.

As a result, we now live on a 40 acre block; took 40 years to do it. When the weather gets cold, I chop wood; we have no shortage of it. When we moved to QLD, we purchased a second-hand QLD high-set house - about 1930 vintage - and had it moved 25 miles onto our block - total cost $28,000 in 1978. We've done a lot of work on it since - all ourselves. We don't give a damn what the neighbours think; and we chose a location where the local council doesn't make it difficult for owner-builders. We mow the lawns to keep the fire risk down, not for any other reason (apart from the airstrip). I would not go back to a suburban quarter-acre at gunpoint.

 

To do those things more generally in the populace, local govt. restrictions on owner-builders need to be overhauled. Kids need to be taught how to do their own car maintenance, how to lay bricks, etc. Everybody did those things back in the '50's but most people nowadays prefer to earn money and pay somebody else to do it. If you're one of those, loss of earnings will hit you hard. I spent several weeks in Kuala Lumpur in the '90s, sorting out an engineering problem. Every house had a cottage industry in the backyard. Australian local government needs its collective heads banged together until it allows this in Oz. What Zoos sees coming is very much a consequence of the loss of self-sufficiency throughout our urban society. We have become inter-dependent, not self sufficient. SE Asia will swarm past us unless we wake up.

 

 

[Dafydd Llewellyn]

Here's a reminder of how many of them are in the sky at any one time, around 5000 or so ......

 

It means what I said, no other, the planes are not falling out of the skies so you waste your time driving around in your car paranoid and I'll continue to fly.

Suits me - that's one less on the road.

 

 

[bexrbetter]

Suits me - that's one less on the road.

Ironic, I choose to fly because I know you're on the road.

 

You made a statement indicating that it's dangerous to fly commercial, back it up with facts.

 

 

[Dafydd Llewellyn]

No, I made a statement that I prefer to either fly myself, or drive. Obviously, if I have to travel overseas, I'll fly. Fortunately, I've reached the stage in life where I do not have to be in a hurry to go places.

 

The statistics show that flying commercial is remarkably safe - at present. I just don't feel comfortable with the overall situation as I see it evolving, since the competition was deregulated. If you consider the aviation industry to be a machine, of which CASA and its bretheren, together with the issuing of airline licences by Government, are the regulators, there is a parallel between this and an engine-driven machine regulated by a mechanical governor (Watt governor). The most important adjustment on such a machine is the tension of the governor spring; too loose, and the machine will overspeed and destroy itself; too tight, and it will stall and refuse to run at all. Deregulation is akin to removing the governor spring altogether; and the levels of competition we are currently seeing are akin to an overspeed condition that will prove destructive.

 

There's a second analogy, which is what happens if the governor is sluggish or "sticky" in its action; then the system "hunts" or oscillates between boom and bust. If the phase lag is small, the oscillation will be small. If it's too far behind the action, the oscillation builds up so the thing destroys itself. Imagine what would happen if the cruise control in your car was ten seconds behind the action.

 

Anybody who has studied control-loop theory should understand this. In any "free-market regulation" scenario, there will be unscrupulous operators who cut costs by cutting safety standards. The others must follow suit to remain competetive. Prices go down; for a while, the consumers are very happy. Sound familiar? Then the accidents start, or airlines start going bankrupt, people become disenchanted, and the market collapses. The unscrupulous ones - at least, those of them who haven't yet suffered a catastrophe, walk away with a fortune; the scrupulous ones who maintained their standards will go bankrupt. So the whole scene collapses. We lose the skill base necessary to make it all happen What I see right now, is about half way or a bit more, along this pattern.

 

The problem with "free market regulation" is that its phase lag is too great; it tends to de-stabilise the industry. That's what I am seeing right now, with the whole global airline industry. We have gone away from the model of close control of airline licences, because it was manifestly unfair and being abused for nationalistic or other more unsavoury reasons, but in doing so, we have abandoned a form of regulation that acted before the event - and was therefore stabilising in its effect, without replacing it with anything that has a similar stabilising effect. I think we are going to discover that what control-loop theory tells us about a machine, also applies to the airline industry, and it will be a ghastly lesson.

 

So I don't want to be involved in it, thanks. Go pick a fight with somebody else.

 

 

[bexrbetter]

No, I made a statement that I prefer to either fly myself, or drive. So I don't want to be involved in it, thanks. Go pick a fight with somebody else.

Here is what you said,

 

Yairrsss - I'm an aeronautical engineer, supposedly with some understanding of the aviation industry. Which airline do I prefer when I travel interstate? I fly myself, or drive. Marginal profitability and union action and offshore maintenance make my oldish Subaru look quite attractive, actually.

You want to post controversial opinion and then what, no one's allowed to dare oppose it? It's not about fighting, it's about having your opinion challenged in a public forum, a place of debate.

 

 

[Dafydd Llewellyn]

Here is what you said,

 

You want to post controversial opinion and then what, no one's allowed to dare oppose it? It's not about fighting, it's about having your opinion challenged in a public forum, a place of debate.

No, it's a public debate; anybody can oppose it if they wish. I have just as much right to express my opinion as you do to yours.

 

 

[DrZoos]

Dafydd as good as your driving and flying may be, its statistically far far safer to take any commercial flight in Australia. Its like swimming in the town pool and worrying about sharks.

 

 

[Dafydd Llewellyn]

Dafydd as good as your driving and flying may be, its statistically far far safer to take any commercial flight in Australia. Its like swimming in the town pool and worrying about sharks.

Yes, of course - trouble is, it's a two-hour drive to & from Brisbane airport. And I usually need wheels at the other end, which is often Mittagong or Hervey Bay. Look at the complete journey, not just the bit of it between airport lounges.

 

 

[DrZoos]

Virgin Blue operates in the same environment. Do you hear Borghetti whingeing about the unions?

Virgin Australia just posted a loss that in percentage terms is far worse then Qantas...its just he knows he has deeper pockets through his 3 foreign govt backers, so can stay in the fight much longer.

 

Oscar its called Virgin Australia and has been since 2011.

 

 

[Bob Llewellyn]

There is no way i can change your conviction that you deserve enough money to pay your bills and there fore shall have..Without business and the economy making money you dont have a job or a wage .......to pay your expenses... And you dont have to be a rocket scientist to work out that a business must be able to make money to be able to then pay staff... No profit means radical change is necesary...

 

Right now businesses are doing what they do. Making sure they answer to their owners. They are culling staff, because staff are no longer profitable.....its no secret, but to some it seems inconceivable. How can i not be profitable?

 

You can bury your head all you want until you get the tap on the shoulder.then you might believe me... But if as a nation we want to fix it before we have very high unemployment and a long protracted correction of wages and housing prices. Then the only answer is to share the pain via wage freezes and minor wage reductions...or we must become 1.8 times as productive...

 

If for example we decide we want to compete with nations that pay $14 hr minimum wage, and ours is $20 we can wait 10 years with wage freezes for them to catch up and have 10 years of rising unemployment. Or we can reduce wages by say $1 per hour per year till we are equal at say $16 and have much lower unemployment and a much less prolonged downturn...

 

Japans population chose to pretend they didnt have a problem and it took them over a decade of severe economic pain and they still havent recovered. The irony is there wages have ended up much lower then the reductions that where originally proposed, because of the length and depth of the correction. Take your pick.

 

Personally i will happily take 5% less if it means my job is secure . Then once costs come down i will take another 5% less.

 

Do the maths on wage increases and you will find in our tax system wage increases make everyone worse off once the costs move through the economy. The only winner is the ato.

I posit that Australia has changed from "fair market value" to "what the market will bear" pricing, during (mostly) the late '80s and '90s. I agree that returning to "fair market value" will result in reductions in various costs and wages. Is this thread arguing about changing "what the market willbear', or considering a return to "fair market value"?

Note: "Fair market value" places the onus on the manufacturer / service provider to figure out the real costs; "what the market will bear" changes the onus from the manufacturer/provider (who really knows the costs) to the - dare I say gullible? - consumer, who knows what they can afford at that point in time. Whilst Adam Smith's dicta of wealth creation is satisfied in both cases, the "what the market will bear' is based upon mendacity or ignorance, whereas "fair market value" is based upon reality.

 

 

[cscotthendry]

I posit that Australia has changed from "fair market value" to "what the market will bear" pricing, during (mostly) the late '80s and '90s. I agree that returning to "fair market value" will result in reductions in various costs and wages. Is this thread arguing about changing "what the market willbear', or considering a return to "fair market value"?Note: "Fair market value" places the onus on the manufacturer / service provider to figure out the real costs; "what the market will bear" changes the onus from the manufacturer/provider (who really knows the costs) to the - dare I say gullible? - consumer, who knows what they can afford at that point in time. Whilst Adam Smith's dicta of wealth creation is satisfied in both cases, the "what the market will bear' is based upon mendacity or ignorance, whereas "fair market value" is based upon reality.

Bob: You're quite correct that the pricing model here is "what the market will bear" but in my experience it has always been that here. I grew up in the US and the pricing model there was always "cost plus" or as you put it "fair market value". I have been out of the US for some 40 years now and that may have changed, but here it has always been "what the market will bear". What I think happened though is that in the 70's, the unions twigged to this philosophy and started applying it to labour much to the chagrin of the Capitalists who considered it their sole privilege.

 

 

[Bob Llewellyn]

Bob: You're quite correct that the pricing model here is "what the market will bear" but in my experience it has always been that here. I grew up in the US and the pricing model there was always "cost plus" or as you put it "fair market value". I have been out of the US for some 40 years now and that may have changed, but here it has always been "what the market will bear". What I think happened though is that in the 70's, the unions twigged to this philosophy and started applying it to labour much to the chagrin of the Capitalists who considered it their sole privilege.

Could be... I was in high school in the early '80s, and the small business model then assumed a selling price of twice the direct costs as the first estimate of the retail price; in 2000 I did a New Enterprise Incentive Scheme small business course, which assumed a selling price of the average of the competition's price plus a small bit for uniqueness (of whatever you were selling...). I think petrol pricing is perhaps the supreme example of "what the market will bear" pricing, with crippling nock-on effects.