Very Good Pay for Low Productivity

A topic I’ve been thinking about involves wages, labour and productivity.

Particularly in Australia.

Bureau of Statistics data suggests that wage inflation is benign.

https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/latest-release

I am seeing the contrary. A range of people from hospitality workers, truckers to tradies being paid above award rates for their labour.

Sorry folks, but house cleaners are making $55 per hour. That’s the same as a registered nurse.

On the subject of labour, it is anecdotally evident that we have a shortage of labour. Whether that is spliced and framed between those willing and not willing to work (either subsidised or otherwise), available labour is scarce.

I’d like to be corrected with this next statement but productivity (any type that you wish to look at) is significantly lower than it was 20 or 30 years ago.

Certainly software has helped increase one type of productivity but generally in Australia, I think the drop in productivity commenced from the moment Bill Kelty became the Secretary of the ACTU in 1983.

The costs associated with hiring and keeping employees coupled with the difficulty in firing staff has manifested it into a growing gravy train of complacency and lack of productivity.

Now, it has spread into a common work vernacular.

Why does it take 18 months to build 5km of highway ??

Australia is a one-speed economy.

Slow !

September 1, 2021

by Rob Zdravevski

rob@karriasset.com.au

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