Is productiveness actually a magical repair?

These two factors display that productiveness is not any magic bullet for the opposite challenges going through Australia’s labour market. 

Neither is it credible in charge lack of productiveness for one more huge subject on the summit agenda: the traditionally weak progress in wages over the previous decade.

Enterprise leaders prefer to insist wage will increase aren’t doable with out productiveness progress. However the precise drawback for the previous decade has been the other: productiveness grew whereas actual wages stagnated – and at the moment are falling quickly because of the surge in inflation.

In truth, the connection between the 2 (which many economists assume to be automated) has been damaged for for much longer.

For the reason that mid-Seventies, financial and labour market coverage in Australia intentionally undermined wage progress via measures resembling weakening collective bargaining, downgrading the award system to a security web, vilifying and policing unions, and (for a lot of public sector staff) merely dictating minimal wage positive factors. 

Not surprisingly, all this stored wage progress properly behind productiveness. In consequence, the share of labour compensation in GDP has fallen by 13 proportion factors for the reason that mid-Seventies, reaching an all-time low of 45% this 12 months. 

The share of company earnings in GDP, not coincidentally, elevated by the same margin, and is now at file highs.

These tectonic shifts in nationwide revenue distribution refute the frequent assumption that staff are robotically paid based on their productiveness. 

Staff might be rightly sceptical {that a} generic dedication to revitalising productiveness progress will robotically clear up the issues they face – falling actual wages, endemic insecurity and the erosion of collective illustration.

To construct a real consensus on productiveness, subsequently, the roles summit should additionally advance a convincing imaginative and prescient for the way the positive factors from productiveness progress can be extra pretty shared.