Aug 14, 2014

In ‘high-wage, high-cost’ Australia, workers are going backwards

Australians' real wages are falling -- which is bad news for domestic demand but great news for business when coupled with productivity growth.

You may recall the “productivity debate” we had a couple of years ago when business and the Coalition, from Tony Abbott down, insisted Australia had a productivity problem, and it was because of Labor’s Fair Work Act. Inconveniently, however, labour productivity then proceeded to increase significantly. It’s still rising, in fact. It took a long while, but eventually the repeated hammer blows every three months in the national accounts numbers muted the incessant drone about labour productivity. True, some business leaders still can’t help themselves and reflexively lament our poor productivity, but after two years of constant numbers showing rising productivity, the message got through.


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8 thoughts on “In ‘high-wage, high-cost’ Australia, workers are going backwards

  1. bushby jane

    Shane Oliver, business confidence is higher than consumer confidence because ‘the adults’ are in charge, consumers live in the real world.

  2. MJPC

    So the question is, how long until business and some in the government stop whingeing about wages?
    The answer: never whilst workers get paid money. The capitalist’s (supported by this excuse for a government) long for the days of subsistence wages for 18+ hour days; maybe we will all go onto an Intern agreement and work for nothing, they would love that.
    By the way, in the Federal government PS’s are being offered 1% together with a loss of conditions…any society is only 3 meals away from a revolution.

  3. Liamj

    Who needs facts when you’ve got scores of amoral ‘communications professionals’ churning out acres of newsprint & hours of soundbites. The ACCI, IPA, BCA, CEDA, CIS, all will deserve a share of the credit for stalling the economy by underpaying the peasants.

  4. klewso

    All Right :-
    “Job’s done. You’ve all maximised profits (and, thus, your remuneration to management) by minimising wages to the working poor – what do the working classes have to spend, on your products, after they’ve scraped enough together to pay for necessities, such as shelter and nourishment”?

  5. drsmithy

    “High wage, high cost” Australia also entirely comes back to the property bubble. Until that’s fixed, nothing will improve.

  6. The Pav

    One of the other things about wages not keeping up with inflation is that it means going to work isn’t worth it.

    Part of the reason I ceased is becuase the economic rewrads ( salary) didn’t match the hassle or recognise my skills so I quit and took to travelling

  7. Luke Hellboy

    I would be curious to see how upper management and board level incomes increased (or decreased, lol) over the same period.

  8. TomM

    Recently released analysis by BCG here ( on global manufacturing costs. Labour costs is adjusted for productivity. While the headline number supports the BCA etc. on labour being too expensive in Aus, it also shows Germany & Japan are #2 and #4 largest exporters, yet are more expensive than China and US at #1 and #3…well yes of course. But what it shows is just because your costs may be high (Germany & Japan) doesn’t mean you can’t have a big manufacturing industry.

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