
Originally Posted by
The Dunster
The case of penalty rates is one of General Equilibrium as it not only impacts upon the workers wages but also on their spending as well. The answer in the past has been through financial engineering, namely easy credit to fill the spending gap. But with household balance sheets in such a terrible state that's not as simple as it once was. People just might lower their consumption spending - and in an economy that's essentially fueled by consumption things can get ugly really fast.