The advocates of microeconomic reform have had no new ideas for decades. Rather talk of a new reform agenda inevitably ends up scraping the barrel for items of unfinished business left over from the agenda of the 1980s.
The biggest item of unfinished business is industrial relations. Although unions have been greatly weakened, and security of employment greatly eroded, the failure and repeal of the Howard government’s WorkChoices policies has left Australian workers in a stronger position than their counterparts in most English-speaking countries.
Ordinary Australians understand this. As then BCA chairman Graham Bradley lamented in 2012, Australians assume that “when business leaders talk about productivity growth what they really want is for employees to work harder, for longer hours and lower wages”. A striking illustration of this took place in 2011, when treasury secretary Martin Parkinson gave a speech on productivity. Although Parkinson did not mention work intensity, his speech was reported by two different news organisations under the headline “Australians must work harder”.
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Throughout this, the advocates of the productivity agenda rejected the idea that productivity growth was simply code for working harder. But finally, they have begun to admit this. In evidence before the Senate standing committee on economics in 2012, the Commission conceded that work intensity (also described as “cutting the fat of organisations”) is an unmeasured source of productivity growth, and stated that the debate “was settled in the mid-2000s”.
The problem is, as the experience of the last 20 years has shown, that productivity gains achieved by driving workers harder are not sustainable, except in recession conditions like those of the 1990s. As soon as the labor market recovers, overworked employees will either quit to look for new jobs, or find unofficial and unsanctioned ways of restoring work-life balance.
Genuine long-term improvements in the productivity of the economy can be gained only through educating the workforce to take account of improvements in technology (only a small proportion of which are generated domestically) and through macroeconomic and labour market policies that avoid wasting human potential through unemployment and other forms of social exclusion. It’s time to focus on these issues and bury the zombie agenda of the 1980s once and for all.
John Quiggin, Like a zombie, the productivity doctrine is back – we need to fight it
Quiggin points out that when the Australian Productivity Commission states that “productivity needs to pick up” that’s just code for driving employees to work harder for no extra pay. But that’s the subtext of nearly all mealy-mouthed discussions of increased productivity in the workplace.
It reminds me of the scene in Ben Hur when the Roman Consul, Quintus Arrius, played by Jack Hawkins, says to the galley slaves chained to the oars on his trireme,
Now listen to me, all of you. You are all condemned men. We keep you alive to serve this ship. So row well, and live.
(via stoweboyd)