Dave Oliver: Bashing workers is no solution

A male manufacturing worker.
For too long, business has treated debate about productivity as a baseball bat to be applied generously to Australian workers.

Business groups have tirelessly argued that boosting productivity rests on reforming the Fair Work laws. In other words, to boost productivity we need to cut workers’ pay, cut penalty rates and other entitlements, cut job security, cut rights.

At its core, the message from business is this: when it comes to Australia’s flagging rate of productivity growth, workers are the problem.

Well it’s time to put the baseball bat down and rethink productivity.

There is ample expert opinion pointing out that industrial relations laws are a negligible piece of the productivity puzzle. Rates of productivity growth have risen and fallen in Australia against diverse industrial relations backdrops – from the highly centralised model of the 1970s to the WorkChoices free-for-all of the early-2000s – with no particular correlation.

The productivity slow-down is a long-term problem one that has been underway for at least a decade. WorkChoices didn’t fix it, and the Fair Work Act hasn’t made it worse. In fact, productivity growth is on the upturn after years of decline. Labour laws are not the cause of our productivity problems, and they’re not the solution.

We’d be better off pointing fingers at the mining boom, which sees large amounts of capital and labour tied up in projects before they produce their first tonne, putting a drag on national productivity figures. After last year’s healthy numbers on productivity it’s likely to continue to pick as more major resource projects start producing.

Productivity growth matters. Increasing productivity is the main driver of real economic growth over the long term. It’s how we keep improving the standard of living for working people.

That’s why unions have always been committed to genuine productivity growth; productivity growth that’s about working smarter, not just paying people less to do the same amount of work.

The drivers of productivity are many. Beyond the shop floor, where many of the best ideas for working smarter come from, we know that real productivity improvements come from long-term planning and investment in infrastructure like roads, ports and broadband technology and in educating and skilling up our people.

But management needs to lift its game too. It appears that after years of rising company profits – the profits share of national income has risen significantly throughout the 2000s – many of our corporate leaders have taken their eye off the ball when it comes to genuine commitment to lifting productivity.

A recent survey of manufacturing workers by their union reveals many employers don’t bother talking to employees about solutions to business problems or take a systematic approach to employees’ skills and capability. The findings confirm what unions have known for a long time – management often doesn’t bother to take a serious look at productivity, instead taking the lazy approach of trying to cut wages and conditions.

Unions welcome the opportunity offered by a new national productivity agenda to sit down with business and government and develop a new approach.

This is a chance to move from the narrow and misleading focus on industrial relations laws and focus on working together to make the big shifts we’ll need to reboot productivity growth in Australia.

Among the measures we advocate are: improving management understanding of genuine productivity growth and how to achieve it; true collaboration on productivity through industry councils bringing together unions, government and employers; a real commitment to skilling up Australians with a push to increase participation and completion rates in vocational education and training; a structured approach to driving innovation by increasing engagement between industry and the research sector to generate new processes and products; and a national infrastructure plan to target investment projects critical to improving productivity.

And we’ll also be making the case that as we work to boost productivity; we must also keep fighting for fairness. There are disturbing sjgns we are becoming a less fair society with pockets of entrenched disadvantage.

To have a truly productive and prosperous society, we need workers with satisfying and secure jobs, good wages, training and a stake in the success of their workplace. We also need to make sure all Australians have the opportunity to access the good jobs rising productivity can deliver.

Let’s stop using productivity as a baseball bat to beat up on workers, and start playing ball instead.

A version of this article was published in The Australian on 25 July 2013.