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Like a zombie, the productivity doctrine is back – we need to fight it

Productivity gains achieved by driving Australian workers harder are not sustainable. Productivity-based reform is a zombie that needs to be killed once and for all

John Quiggin
theguardian.com, Thursday 3 October 2013 09.16 AEST

It is, perhaps, unsurprising that the Australian Productivity Commission has released yet another report arguing that productivity growth needs to pick up, or that its incoming chairman, Peter Harris, has spoken of the need for a "shared commitment to a reform agenda". One would scarcely expect the Productivity Commission to be opposed to productivity, after all. As for reform, we all support it, to the point where it is necessary to put scare quotes around any "reform" measure we want to criticise.

In reality, however, the idea of a productivity-based microeconomic reform agenda is a zombie that needs to be killed once and for all if we are to achieve sustained improvements in living standards for all Australians. The heyday of microeconomic reform was in the 1980s and 1990s when the Hawke, Keating and Howard governments, pushed through a range of reforms including financial deregulation, the removal of tariff protection, National Competition Policy, privatisation of Telstra and the introduction of the GST. Some of these policies were successes and others were failures, but for good or ill, they are mostly in place for the foreseeable future.

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".

As with everything to do with productivity, this association dates back to the late 20th century. The central theme in talk about a productivity reform agenda is the "productivity surge" that supposedly occurred in the mid-1990s. At the time, this was hailed as proof that microeconomic reform would put Australia on a new growth path. Critics argued that the "surge" was at best a temporary blip and at worst a statistical illusion caused by the increase in work intensity that Howard later described as a "barbecue stopper". They claimed vindication when measured productivity growth slowed in the late 1990s, and then stopped altogether. It’s now clear that, far from surging, the rate of productivity growth has actually been lower since 1990 than in the bad old days before microeconomic reform.

None of this is surprising for those who argued that the supposed surge was an illusion in the first place. But the Productivity Commission has been consistently wrong on the issue. In a 1999 report for example, the Commission acknowledged the possibility of a slowdown, but stated "it is unlikely that the long-term rate of productivity growth would slow as far as the average recorded over the 1970s and 1980s".

As the decline in productivity became more obvious, the denial continued. In 2002, chairman Gary Banks stated "this downturn in productivity is more likely to be short-lived than indicative of a marked slowing in underlying trend". And in 2005, assistant commissioner Dean Parham concluded that "it is premature to declare Australia’s experience of stronger productivity growth to be over." Many more examples could be cited.

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.

http://www.theguardian.com/commentisfree/2013/oct/03/productivity-zombie-economy

"Bias" in a "left wing" article: Quoting sources and demonstrating a cohesive thought process.
"Bias" in a "right wing" article: Dressing Kevin Rudd up as a nazi.

Ok.

I can only conclude that rusty is actually devoid of any semblances of a thought process.

So you interpreting that the ABC is implicitly choosing Labor is equivalent to Murdoch telling people to vote for Liberal?

Now try and find me someone on the ABC that is racist sexist and denies climate change.

Thats the same Hyperbole people repeat after they read the daily tele. Do you have any actual evidence why these particular politicians are bigger lairs than the rest?

ABC presents left-wing oriented facts which encourage critical thinking - bias.

Daily Telegraph instructs people on the front page not to vote for Kevin Rudd - Not bias.

OK.

Bias in a left wing article - ridiculing any evidence or source that doesn't support the writers agenda, cherry picking data and choosing to accept only evidence that is congruent with the authors point of view as valid.

The ABC doesn't encourage critical thinking, it encourages emotional thinking on "soft" issues like refugees and disability care. If you want hard straightforward factual analysis you won't get it at the ABC.

So when you do it, it's ok. When an editorial does it, that's "blatant bias".

OK.

And what ? Does newscorp allow rational thinking? The past few days everyone right winger at the hun have attacked the ABC for a supposed right wing bashing .If I wanted American style conservative slants I can watch bill o Reilly

No of course not, FOX news fills that void best, doesn't it.

But I will get straightforward impartial factual analysis in Murdochs papers right? RIGHT!?

Well the greater crime is the ABC who is taxpayer funded and supposed to be completely independent and void of any political bias. The ABC is supposed to inform and educate and not persuade to one side of politics or the other, news corp is completely private and therefore can publish what it wants.

Everyone does it, that's my point. The idea here that the telegraph is this great evil while the ABC is sinless and undefiled is pure hypocrisy.

Lose this argument, better just raise another issue. That'll show him :lol:

Crime ? The ABC are a voice of reason trapped between a cesspool of right and extreme right , people only complain about the ABC because people tell them that its bad to be different . Give me self thought rather than mindless drivel .

I don't think anyone has said the ABC is completely impartial. People have just said that you point out implicit language in an article to be "left-wing bias" while you ignore newscorp explicitly telling you who to vote for. That is pure hypocrisy.

State funded media is a leftist ideal...and you're outraged that they're willing to side with the left side of politics?

News Corp can't publish 'what it wants' if it's trying to pass off opinion as 'news'. News is meant to be unbiased, that's clearly not the case when you're publishing images of the prime minister mocked up as a Nazi.

Anyone who thinks that Newscorp is right in publishing such things is a fucking spastic. End of.

The ABC aren't telling people who to vote for. Or portraying politicians as Nazi's. To pretend that they're on the same plane as the Telegraph is pure stupidity.

Straw man

Dude you're the one refusing to prove your allegation.

Don't you know, Joffa, that it's the opponent's responsibility to provide evidence when a right-winger makes an accusation?

Soft issues :lol:

That takes the cake for me :lol:

Now confirmed that rusty is a troll.

-PB

Just because I often make valid points that you lack the capacity to rebut for whatever reason and thus resort to personal insults, nitpicking and misdirection doesn't mean I'm a "tacky uneducated uninformed malicious troll"

SBS is the best news by a country mile

To be perfectly honest it amazes me that no one in this forum mentions anything about the ALP still have not settled on a new leader?????