By Kris Sayce – Port Phillip Insider (Australia) –
Ah, so foreigners coming into the country do push down wages. That’ll be a tough one for the progressives to grapple with. Regardless, of course an increase in labour pushes down wages. It’s supply and demand.
It’s another reason why governments try to push through minimum wage laws, in order to stop wages falling. The consequence, of course, is that minimum wage laws don’t actually help. Minimum wage laws just put a burden on businesses.
Furthermore, minimum wage laws bring forward key business decisions. Those business decisions may involve automation, or even offshoring of jobs — which is ironic. The immigrants come here; the jobs go there. Funny that.
The point is, since last year, when the ABS revealed that the Aussie economy had contracted in the third quarter, the message from the mainstream was that it was a one-off…that the economy will rebound when the fourth quarter number comes out this month.
For instance, in a survey conducted in January, economists predict the Aussie economy will have grown 2.4% in 2016, 2.5% this year, and 2.8% in 2018.
Up, up, up.
Even after 26 years of economic growth, it seems that no-one in the mainstream can believe the Aussie economy can possibly go backwards.
That’s why we believe the market will be taken completely by surprise when the ABS shows a contracting Aussie economy.
And it’s why we’re encouraging Aussie investors to spend some time familiarising themselves with the ‘Big Australian Short’. It’s the idea that investors and markets are blind to the real risks facing the Aussie economy.
If you haven’t checked it out yet, to get the details of the ‘Big Australian Short’, go here.