Maybe Federal Employment Minister Eric Abetz isn’t all wrong.
On Tuesday night, Abetz warned of a wages explosion if employers don’t get some backbone and stop caving in to union demands for higher wages.
It’s a fear that doesn’t seem backed up by any of the data, as Matt Cowgill tweeted yesterday.
But while Senator Abetz might have the wrong end of the wages stick on this one, he might have actually put his finger on a key longer term problem faced by the Australian economy in a globalised world.
That is, we just get paid too much relative to our competitors. This is a situation that is shown starkly by today’s chart from the ANZ:
That’s not to say we are advocating lower wages for Australian workers, but the reality might be that for some companies and some industries, the trade-off between employment and unemployment or retraining is lower wages.
It’s a stark choice. But one being faced right now by Toyota’s Australian manufacturing workers and potentially by many more workers in the years ahead.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.