A decent living wage for all

TV3’s Campbell Live has just shown the most heart-rending story of a solo mother who is a cleaner without a car or a landline but who is in deficit to the tune of $120 a week. She simply doesn’t get paid enough. She takes two buses to work, she chooses to work rather than go on the DPB and she studies to be paramedic at night time. She is a good mother too who cares well for her kids but simply can’t pay all her bills.

So what would our policies do for this woman? Why under a New Economics Party led Government would we not have to have campaigns for a decent living wage?

Solo mother takes two buses to work

1. There would be enough currency in the system for her employers to pay her properly and she wouldn’t have to pay income tax. Jobs would be created naturally because there is enough money circulating fast enough to pay for everyone’s basics.

2. With a price put on the holding of land, and no profiting possible from capital gains on homes, the country’s money supply doesn’t have to keep rising. So the price of housing will drop. This will mean her landlord won’t have to charge so much rent to get a return.  I have just seen a study cited by Steve Keen after today’s Sydney Morning Herald. It was done by Credit Suisse and found 55% of the growth in owner occupied housing credit over 1995-2011 was caused by rising house prices. In other words every time house prices go up, the supply of money increases and this causes inflation. This is not measured in the CPI of course, and the real inflation figure is masked. So this solo mother has to pay higher prices for everything because of rising house prices. It puts up her rent and all her other expenditure.

3. Her income tax would drop to nothing under a New Economics Party government.

All in all she would have more purchasing power. Her money would go further.

An Australian graph is relevant here regarding what has happened to GDP as earned and unearned income over the period 1911-2007. More and more is coming from our labour:

"Land Rent Graph"