Workplace flexibility needs to work both ways
OF THE many divisive issues raised during the Australia Day week, perhaps the most inevitable was that of the nation's productivity even though many of us have no idea what it means.
OF THE many divisive issues raised during the Australia Day week, perhaps the most inevitable was that of the nation's productivity even though many of us have no idea what it means.In simple terms, productivity is the economists' measure of how much bang businesses and governments get from the bucks invested in employing people and assets to produce something how efficiently and effectively you use the resources at your disposal to produce goods that are consumed in some form.If you are not enjoying a four-day weekend, you probably know someone who is whether by a "sickie" or a legitimate day off. If lucky enough to still have the sort of job where you get paid for holidays and sick days, you should know that many purists regard the absences as black holes into which they have to pour cash, but get nothing at the other end.Thus it is almost a certainty every year that various employer groups wring their hands over the lost productivity of not just a public holiday, but the inclination of many to either get hammered and not work, or be very limited in what they can do, the next day.This weekend effectively marks the end of the summer break, after which children start a new school year, mum-and-dad taxi services resume, and we all try to cram ourselves onto road and public transport systems for the commute. Yet the lobby groups and politicians are spending considerable time talking about whether we produce enough to justify the incomes we receive.Those who in recent decades have had their patterns of work and family life permanently altered by adapting to lengthened trading hours (or who find themselves doing work at home, on the way home and on the way to work) might well scratch their heads when told how badly Australia lags its competitors in productivity and "workplace flexibility".That last term, workplace flexibility, seems almost always to refer to an employer wanting the flexibility to modify the conditions under which an employee works, rather than what it should mean both parties discussing an outcome that benefits both.The big debate at the moment is whether the Labor Party's Fair Work Act stops employers getting sensible outcomes for example, when the law was interpreted as dictating minimum three-hour shifts, which in turn prevented kids getting after-school work in retail and hospitality.There seemed to be less concern about flexibility in negotiation when the technology was developed that allowed the introduction of self-service checkouts in shops, so store owners get their customers doing work that was once done by cheap, teenage labourers.It seems unarguable that the rate of growth in productivity in Australia has slowed significantly in recent years (although many seem to have trouble distinguishing between productivity and the rate of its growth). The debate at the moment is over why that growth rate has slowed. Employer groups are mostly lined up behind the phrase "barriers to productivity improvement need to be addressed" shorthand for not liking the Fair Work laws that were designed to remove perceived iniquities introduced during the Coalition government's time.Those who have to pay employees reckon that comparative labour rates in Australia are much higher than in the US or Britain, and that having to pay weekend and public holiday penalty rates is adding insult to injury.That, they would argue, results in the cost of getting a latte to your table, or a flat-screen TV into your living room, being higher than elsewhere and making Australia globally unattractive as a place to invest with the loss of jobs for 350 Toyota employees this week as an ugly example.You could always see those higher wages (and the superannuation guarantee) as our way of ensuring that most people are paid "liveable" incomes, rather than having to top up with tips or extra jobs. Advocates of the US system say treating them mean keeps them keen that workers do more, and give better service, under such conditions. The big problems with that argument are revealed in the results of an OECD study on social inequality, published early last month, that reckons the gap in Australia between the top and bottom wage earners has been widening since 2000, and is now above the OECD average.Statistical limitations meant that the study effectively ended with 2008 numbers or before the Fair Work Act was in place.According to the OECD numbers, in the mid-1990s the average income of those in the top 10 per cent was about eight times that of those in the bottom 10 per cent. By 2008 the top end's $131,300 average had blown out to close to 10 times the bottom decile's $13,700. Blame that on "labour market changes", said the OECD.It was also interesting to see the US and Britain were further up the scale even than Australia on the measures of unequal allocations of income. The OECD did not answer the question of whether the higher incomes enjoyed by those at the top represented good value in other words, were they more productive?It also noted that Australia, like most OECD countries, had seen those earning the least have their average hours worked each year since the mid-1980s reduced from 1300 to 1100. The top-paid's hours were steady. That would seem to be "workplace flexibility" in practice.In a week in which much was said about the egalitarian nature of Australia's character, maybe both sides need to have a more productive debate about what they can give up to get a better firstname.lastname@example.org
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free