Gerry Harvey is the Australian billionaire retailer who runs the Harvey Norman computer and furniture stores. A few days ago he called for a two-tier wage system in Australia, one for locals and another for a new breed of low-paid foreign guest workers.
How did he justify such a measure? He couldn't argue that high wages were harming the economy, as the economy has been doing well. So he argued instead that prosperity itself was the problem, as it has led to labour shortages. According to Mr Harvey, there are countless people overseas who would happily move to Australia to work here at half-pay.
The logic of this position is less than impeccable. If there are people willing to move here to work at half-pay to fill labour shortages, they would presumably be even more willing to work here at full-pay. In other words, you don't need a two-tier wage system to overcome labour shortages.
Nor, as Mr Harvey has already admitted, do you need low pay to keep the economy going. The economy is doing well with current wage rates.
So there's no necessity for a two-tier wage system. It's probable that Mr Harvey is pushing the idea simply because he likes the prospect of a mass of low-paid foreign workers; perhaps he thinks he can use them as cheap labour in his stores.
It's interesting that Mr Harvey endorses the situation in the US, in which illegal arrivals from Mexico make up a cheap labour force. I've been reading a series of posts from Face Right, which cover some of the social fallout from exactly this policy:
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