Productivity Commission report blames weak productivity, greedy bosses for weak wages growth

Why Australians aren’t getting decent pay rises after seven years of waiting – and government says workers are partly to blame

  • Productivity Commission suggested falling productivity behind stagnant wages
  • It blamed lacklustre output growth for ‘about half of the slowdown in wages’
  • Decline in enterprising bargaining agreements, powerful bosses also to blame 

Australian workers are largely to blame for their lousy pay increases because of their lack of productivity, a government report says.

Private sector employees and public servants alike have had little growth in their wages for the past seven years.

The Productivity Commission, an independent arm of the Treasury, suggested slackers were to blame for the overall lack of pay increases, arguing weaker labour productivity growth was ‘accounting for about half of the slowdown in wages’.  

Australian workers are largely to blame for their lousy pay increases, a government report says. The Productivity Commission, an independent arm of the Treasury, suggested slackers had weighed down pay increases, arguing weaker labour productivity growth was ‘accounting for about half of the slowdown in wages’

The decline in unionism was also a factor, with the Commission’s ‘Productivity Insights’ report, released this month, noting there was ‘falling usage of collective bargaining beginning about the same time as falling wage growth.’

Between 2012 and 2018, the number of enterprise bargaining agreements dived by 54 per cent.

The 85 percent of workers, however, who do not belong a union were also missing out on decent pay rises.

‘The union wage growth premium — an indication of union bargaining power — has not declined,’ the Productivity Commission said.

‘That finding would not rule out weaker bargaining power by workers generally — whether represented by unions or not.’

For the past two decades, the workers’ share of company earnings has also been falling.

The Productivity Commission said this was ‘accounting for about a fifth of the slowdown in wages’.

Then there are more powerful bosses. Between 2012 and 2018, the number of enterprise bargaining agreements dived by 54 per cent with the Productivity Commission noting there was a link with stagnant wages

Then there are more powerful bosses. Between 2012 and 2018, the number of enterprise bargaining agreements dived by 54 per cent with the Productivity Commission noting there was a link with stagnant wages

The past seven years has also seen a sharp decline in the Australian dollar.

The currency was at parity with the US dollar at the start of 2013 but since then, it has declined to just 66 US cents, making imports more expensive for workers.

‘As the commodity price boom has dissipated and the exchange rate has fallen, much of the effect has similarly passed through to consumers as slower growth in the purchasing power of their wages,’ the report said.

As a result, wages have at times failed to keep pace with inflation. 

The official Wage Price Index last year grew by just 2.2 per cent and has not risen above the three per cent level since early 2013, Australian Bureau of Statistics data showed.

The annual growth in public sector pay, also 2.2 per cent, was the lowest on record since the ABS series began in late 1997. 

The wage stagnation began in the late stages of the previous Labor government following the end of the mining construction boom. 

Read more at DailyMail.co.uk