Over the past few weeks, I’ve pointed out how often we have to try to challenge rhetorical nonsense about the economy that spills from the mouths of The Coalition and their business allies. Blinding rhetoric, too often, substitutes for truths about the economy. And one of the particular myths we hear, time and again, is the idea that workers are not productive “enough”. It’s not true.
Ian Verrender had a terrific column over the weekend that should not be missed. Titled “Lies, damned lines and productivity”, Verrender leads right off with a quote about the power of propaganda from Joseph Goebbels and, then, hits the issue:
For the past few years, we’ve been bombarded by a constant theme from the business lobby groups: Australian productivity is slipping and unless we have a more flexible labour market and governments reduce regulation, we’ll all be ruined.
There’s a sliver of truth to the argument. Productivity indeed has plunged. And labour productivity has slipped in recent years. But the real culprit in the great Australian productivity decline is capital, not labour. It is our managers who have let us down, rather than our workforce. And in any case, all the statistics have been thrown completely out of whack by the massive investment boom in our resources sector. [emphasis added]
What is often ignored in this heated debate is that, outside of work hours, labour usually is referred to as consumers. Your workers are also your customers.
Reduce their income and eliminate their job security and you may well end up selling less product. On the other side of the ledger, productivity is also likely to suffer. Let’s face it, cutting wages and conditions is hardly an incentive to work harder.
Capital productivity on the other hand, has turned negative, wiping $43 billion from national income. Why? Well, a couple of reasons. One is that much of the enormous recent investment in new machines and building new mines has yet to generate an income. And so as that new plant and equipment starts churning out exports, a great deal of our productivity ”problem” – both for labour and capital – will be solved.But the report also highlights what must be an uncomfortable truth for Australian managers, particularly in our resources sector. It reckons a large portion of the cost increases in our mining sector is down to poor management. With a resources boom of unprecedented proportions, the scale and magnitude of the projects under construction has stretched management capabilities, many of whom have little experience with these mega projects. [emphasis added]
The workers are not to blame? Huh. Fancy that.Which of course leads to the obvious conclusion:
Our productivity ”problem” will best be solved through investment – in new and more efficient machines and in education to produce more skilled workers and better managers – not with a slash-and-burn approach to wages and conditions. That’s something you’re unlikely to hear in the coming propaganda war. [emphasis added]
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