A recent proposal suggests that by reducing executive working hours, Australia could preserve thousands of average-income jobs. With mortgage stress at an all-time high for many Australians, some believe that making the wealthy feel the pinch could offer a fairer solution to the country’s economic troubles.
Mortgage stress in Australia has reached critical levels, with 1.3 million Australians struggling to meet their mortgage repayments. As interest rates remain high, many are calling for a rate cut to ease the financial burden. However, the Reserve Bank of Australia (RBA) has made it clear that it views unemployment as a key factor in its decision-making process.
According to the RBA, the unemployment rate must rise to 4.5% to allow for a potential rate reduction, but this means that tens of thousands of Australians may lose their jobs.
The Dilemma of Unemployment and Mortgage Relief
The current unemployment rate in Australia stands at 4.3%, and economists suggest that a further 30,000 job losses would be necessary to reach the target rate of 4.5%. While this might help reduce inflation and potentially bring down mortgage rates, it comes at a high cost—thousands of workers are left without income. This paradox highlights a pressing dilemma: how to provide financial relief for mortgage holders without causing further economic pain for ordinary Australians.
In a recent statement, RBA Governor Michele Bullock expressed her preference for gradual easing in employment rather than sudden job losses, noting that reduced working hours could be a preferable alternative. However, the idea of cutting executive hours to reduce inflation and unemployment is a controversial one. By adjusting the working hours of Australia’s highest-paid executives, it could theoretically free up job positions without causing widespread unemployment.
For instance, reducing the workweek of top executives such as the CEO of Macquarie Bank, who earns an annual salary of $24 million, could generate enough savings to preserve numerous lower-paying jobs.
How the Wealthy Could Lessen the Burden on Average Australians
This proposal takes aim at the high earners in Australia’s financial sector, suggesting that if executives were to sacrifice a fraction of their salaries, it could help cushion the impact of rate hikes on the broader population. According to data from the Australian Tax Office, there are nearly 15,000 individuals earning over $1 million annually in Australia.
If these individuals switched to a four-day workweek, the theory goes, the economy would see a reduction in spending by the wealthy, which could, in turn, alleviate inflationary pressure without triggering mass unemployment.
While this idea might seem unconventional, it highlights the widening gap between the financial difficulties faced by ordinary Australians and the wealth enjoyed by the country’s top earners. It also raises important questions about how Australia’s economic policies can be adjusted to ensure that the burden of inflation control is distributed more fairly.
