House prices, not wages, is the bigger issue
Peter Pitt (“High wages force companies to consider offshore options”, AFR January 10) suggests that a lower minimum wage will improve employment retention in Australia. The lower wage countries he uses to support his point include the United States, United Kingdom, New Zealand and Japan.
Of these, only Japan actually has a lower official unemployment rate than Australia. However, Japan uses a narrower definition of unemployment, has a lower participation rate and has around one-sixth of its population living below the poverty line. Given that Australia has some of the most unaffordable housing in the world, fuelled by exorbitant land prices, lower minimum wages are a certain recipe for increasing homelessness and the numbers of working poor.
Australian wages are not too high. Rather, it is the exorbitant price of all types of land that is the real enemy of employment and progress. This problem is perpetuated by a taxation system that punishes effort and rewards unproductive speculation. Australia can increase employment and wages to their full and natural levels by freeing the labour market of land monopoly and other unjust privileges that block fair access to work opportunities. This can be achieved by removing taxes off the backs of wealth producers and returning the unimproved site value of land to the Australian people via the Treasury.
Ronald E Johnson Association for Good Government Canberra, ACT