Companies

Nov 3, 2017

Goyder’s productivity fairytale refuted by basic data

Business claims that wages growth will only happen when there's productivity growth. Except ... productivity is still growing, and stronger than under WorkChoices.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

Outgoing Westfarmers CEO Richard Goyder

Remember the productivity crisis? Back when economists, the Productivity Commission, employers and the Coalition agonised over why Australia's productivity growth was so low and what industrial relations changes could be made to fix it? That was the crisis that vanished as quarter after quarter of labour productivity growth kept appearing in the national accounts after the Fair Work Act replaced WorkChoices.

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7 comments

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7 thoughts on “Goyder’s productivity fairytale refuted by basic data

  1. klewso

    What about these executives and their own productivity – BS aside?

  2. ajm

    Posted this on Twitter 4 years ago and will keep saying it whenever this gets raked over:
    ajm
    @a1m7
    To most Libs, “Productivity” = (small) business profits. Nothing to do with the economic concept of the same name

  3. 124C4U

    Free market Economics!
    Is it not strange that that only applies to the top end of Town.
    Down the lower end where I reside there is a different set of rules apparently. I can remember when the Businesses decided training people was too expensive, and anyway someone else should do it. Move on a few years, mining boom and construction boom, shortage of skilled workers.
    Freemarket usually dictates shortage requires things to get more expensive, that is to get a skilled worker you need to pay more to get people who have left their trade or retired, to come back. Also train more people attracted by the higher wage. Hell no! in our “freemarket” we bring in foreigners at lower pay. They can’t meet the skills or qualification requirements? Get the Government to dumb down the requirements. Also get the Government to remove all their regulation compliance inspectors. Allow “self regulation”.
    Free Market my posterior.

  4. Dog's Breakfast

    Yeah, neoclassical rubbish. Productivity is just one of a number of ways to get higher profits. You could pay your Executive suite half what they currently get, that would go straight to the bottom line, no productivity improvement required.

    Higher profits are what is actually required to pay higher wages. Not even essential, but over time it would be for the best. Companies could pay higher wages and take a small hit on their profits, or even a large one. As long as the profitability is still there, there is nothing holding the companies back.

    They are getting higher company profits and they are not passing those on to their workers. That’s the reality. QED!

    Productivity improvements are nice, but not the whole story by a long shot, and as the only ways to measure productivity on a national level are either extremely dubious and clumsy, or downright bullshit, then holding back wages based on spurious data is even less ethical.

    The big boys game is a continuing line of bull justifying why their pay has to go to extreme levels, because they are so worth it, while the average Joe has to keep taking a hit for the team. We’ve heard it all before, from the beginning of time.

  5. AR

    My blood pressure rose when I thought that this was an attempt to impugn the Goyder Line is South Australia. He has been proved right for over a century.
    I hope this creep is no relation – it would be as painful as acknowledging Nick Whitlam as a scion of the Great Gough.

    1. AR

      … as well as “..the Goyder Line in South Australia

  6. Itsarort

    When it comes to empirical evidence, it would seem that business philosophy belongs more to the discipline of theology rather than mathematics.

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