This week the Reserve Bank of Australia sent a clear message that it does not intend to move interest rates upward until at least 2024. That is extremely bad news for self funded retirees who took their superannuation in a lump sum and expected to live off the interest earned.
It also sets in stone the incredibly low interest rate charged on home mortgages which is the root cause of inflated home prices. First home buyers are flooding into the market in desperation before it moves out of their reach and the median price of a Sydney home is fast approaching the million dollar mark.
At the same time as low interest rates are put on hold, the Reserve Bank is opposing any increase in the minimum wage. The reasoning seems to be that the small business community can not afford to pay its workers more as it emerges from the lockdowns caused by the coronvirus. Most are struggling to show a profit after being forced to close their doors for weeks at a time.
In contrast, the big end of town has been doing really well. Company profits are on the rise and manufacturers have had the protection of government wage subsidies to keep employment level. Any increase in the wage level will take place across the board and it is feared will deliver a hike in the unemployed numbers which are at present holding up well.
The business community rode out the lockdown by having employees work from home and this was assisted by the prevalence of home computers., Now there is resistance to moving people back to the office, but it seems that the working day has lengthened. There is a growing tendency for office related phone calls and emails to arrive out of office hours and over the weekend. It is quite apparent that the division between work and leisure time is shortening.
Now there is pressure for labour laws to be tightened to forbid contact outside of work hours to stop this growing practice. Questions that need an answer often have employees doing the necessary research in their own time and pressure is building to restore the old work/leisure cycle. This looks like culminating in employees being able to switch off phones and email receipt after office hours.
We are fast reaching the stage where employees are on call 24/7. That is acceptable in an emergency, but it is becoming normal practice in many forms of employment and it intrudes into the proper division of each twenty-four hour period. That called for eight hours sleep, eight hours work and weight hours of leisure.
The Reserve Bank is trying to juggle what is best for the national economy but in Australia the job market is segregated heavily into sectors. The big end of town is doing well and could afford a pay increase, but the small business sector which runs cafes and coffee shops is struggling to stay open and make a profit. Any wage increase will see working hours shorten and reliance on casuals replace permanent employees.
By end end of this year the majority of Australians will have been immunised against the coronavirus and the work situation will be clearer. We can not go on indefinitely increasing the sale price of homes and wage levels need to reflect the ever increasing cost of living.
The Reserve bank would be unwise to make long term predictions. We live in a changing world and our economy needs to adapt to change as it is happening !
No comments:
Post a Comment