Peg minimum wages to local living costs. Areas with high unemployment usually have cheaper housing and therefore cheaper living costs but there is no incentive for business to go where unemployment is high because there is no cost benefit.

Business is very heavily concentrated in our capital cities. This leads to ever higher housing and living costs, greater traffic congestion and much loss of productivity. It also tends to leave the country areas by contrast with high rates of unemployment. What is needed is a way to decentralise business activity by creating incentives for business to move outside the capital cities. High wage costs in our cities also makes Australia much less competitive with other countries and has seen more and more work going offshore.

By pegging minimum award wages to local living costs (something that would be the responsibility of local councils) you can create an incentive for business to go places where there are higher levels of unemployment. This should create more jobs as wage costs are lowered. Further it can be achieved without hurting workers given that their overall living costs are also lower due to much cheaper housing costs in such areas.

The cities benefit by taking the heat out of some the unrelenting pressure on infrastructure due to rapid population growth. This is turn should help keep housing prices more affordable in these cities than they would otherwise be and business that must remain more efficient.

To avoid councils setting wages at unreasonably low levels one could simply mandate that the minimum local wage would need to be say at least 10% higher than estimated living costs based on house prices, rents, petrol, groceries, electricity, water, rates, health and education costs.

To deal with the problem of high youth unemployment, the minimum wage could also be lowered further for people who are single or living at home given that their living costs are also considerably less. This makes it easier for those with no experience to get a foot in the door and start to work their way up. It will also make apprenticeships more viable and help increase our skilled workforce.

It's also important that local minimum wages be allowed not only to rise as living costs rise but also to fall when living costs fall as this will help keep businesses competitive and unemployment down.

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