[Australian] politics flipped two weeks ago. The average Labor voter now earns more than their Coalition counterpart. …
Under the Morrison government, households in Liberal electorates averaged $126,940 in income last year, Roy Morgan Research calculates. This was about 4 per cent higher than the $121,020 earned by households in Labor seats.
Labor and the Liberals changed places at the 2022 election. At $118,880 a year, households in Liberal seats now earn 2.6 per cent, or $3,140 a year, less than Labor-seat dwellers. The gap between the Coalition and wealthier Labor seats is 7 per cent, or $8,580. And residents of Greens and independent-held seats are even wealthier. Their average household income last year was $145,690.
The income data may help explain why both main parties are behaving in ways contrary to their historical allegiances. The Labor Party has promised to subsidise childcare for families earning $500,000, and new Liberal leader Peter Dutton has acknowledged his party’s relationship with big business is breaking down. …
“The Liberal Party is becoming Labor and Labor is becoming the Liberal Party,” an investment banker who lives in the Sydney seat of Wentworth said this week. “I’ve voted Liberal most of my life. Now I find myself reconsidering.” …
Almost by default, the Coalition is becoming the voice of the working and lower middle-classes — and a perceived bulwark against inner-city values and priorities.
This news will hardly come as a surprise to readers here. But it’s nice to see the official statistics backing up the trends we described. The article makes some unconvincing attempts to ascribe the changes to vague cultural factors, but the answer as usual is simply to follow the money.
The trend will intensify. The government’s share of the economy continues to creep up. But more worryingly, the amount of regulation continues to grow rapidly, putting ever more money-making activity beholden to the whim of bureaucrats (who need to be compensated, one way or another).
The bifurcation into two economics continues. On the one hand is the traditional private economy, where compensation is constrained by competition and the discipline of the market. This is generally agreed upon as the best way to run as much of the economy as possible, at least for consumers.
The growth area is the other area, where government fiat replaces market discipline — and the participants are paid what they or some bureaucrat reckons they ought to be paid. Much more comfortable for the participants, but not so good for consumers. This is the territory of government action or government contacts. If you infringe the narrative in even the slightest way then this lucrative part of the economy is out of bounds to you, because participation relies on the pleasure of bureaucrats.
So the Liberals will become the party of the market slaves, the peons working in competition with each other. Expect their wage growth to be smaller. But these people have much less economic incentive to toe the political narrative, so will often adopt realistic positions and will dispute the narrative.
Labor and their supporters will be the party of the bureaucrats and those who agree with them in order to be in receipt of government contracts. Nearly the entire professional and corporate world is now lining up with the Labor Party, the party of the bureaucracy. These people will enforce the narrative, zealously. This is where the larger wage growth will be. (I wonder how long they can keep up the “worker’s party” nonsense?)