Friday
Society is undergoing a radical transformation that is more profound than the Industrial and Computer Revolutions. These created not only vast amounts of new wealth, but also vast amounts of new jobs.
Many of the benefits of those revolutions are still with us, but the jobs have gone; not just new jobs, but a lot of old jobs.
Governments in the western world have been relentlessly squeezing small business in a pincer movement. On the one hand, they have put enormous pressure on profits with myriad and onerous regulations, while on the other, they have enforced a burden of relentless wage rises.
Either businesses maintain their profit, or they are no longer a business. Regulations cannot be fought. Increases in labour costs can. And thus, they are.
My staffing level has shrunk by more than a third in the last ten years. Yes, business is down, but not by a third. The wage rates ensure that I only hire the brightest, fastest and youngest employees that I can find.
My staff are great. Why? Because I have become ruthless about weeding out those who are not great. Too slow, too old, not sharp enough? Don’t even bother applying. My natural inclination to be patient and give extra help in training when needed has vanished. I used to enjoy helping young people through the rite of passage into the workforce; I remember well my own difficult path.
Now? I cannot afford such niceties. The survival of my business does not allow it. Once they have passed the selection process, they have three shifts, at most, to show me that they are worth what I am forced to pay them. They’re great or they’re out. The tragedy is that most are not great. I usually fire them by text now as I cannot bear the look of disappointment on their face.
To beat a drum well thumped in this blog; government regulations, especially uniform wages, produce the very problem that they claim to be solving – the law of the jungle.
I retired from production fifteen years ago. Out of necessity, I have returned. That is another job gone.
Governments have done enormous damage to the Australian economy. It cannot be undone because the idea of ‘a fair day’s work for a fair day’s pay’ is now too deeply entrenched. A uniform wage rate dictated by a Central Committee can never be fair. Some will never be employable; others will lose a job. Who is it fair to?
A veneer of business activity still remains in Australia, but it is tough. Only the meanest and leanest operators will survive the next few years.
Our children are leaving schools and universities with the daftest ideas of how the world operates. They are meeting a job market that values their intellectual capital at almost zero, but is forced to pay them a ‘living wage’. Something has to give, and it has.
Other alternatives are being implemented – robots are replacing humans in more and more businesses.
There will be a major reset, but not before matters become far worse. It will not be done by democratic vote. People will not vote for lower wages until unemployment has passed 50{781366457d9c05ca9285c5eb3e04ac75968647e24436986cab65f74e6f4b3aad}. Which it will, but by then, democracy will have collapsed.
Governments declared a war of attrition on small business in the certainty that they would win – elections. They generally won the election battles, but they lost the war, and the country. The free market (reality) always wins in the end, but it will be a Pyrrhic victory.
What have they done to this once great people and country?
“Everything the government touches turns to shit.”
Ringo Starr – (best quote of the 20th century)