Sorry, but the more the great and good bang on about the urgent need for more “productivity”, the more doubts I have. Have you noticed it’s always the businesspeople, economists and politicians who tell us what we need more of, never us telling them what we’d like?
How do we know whether what they say we need would be better for them but not better for us? Short answer: we don’t. We’re supposed to take their word for it.
The urgers rarely take the time to explain what this “productivity” is, let alone why we need much more of it. I’ve no doubt that, following the coming three-day economic roundtable, the Albanese government will make some changes to taxes and regulation that, it assures us, will increase this productivity thing, whatever it is.
We’ve seen such exercises many times before. “We’ll do this and it’ll all be much better.” Trouble is, they never come back to check whether it really is better – or who did better and who didn’t.
We were assured that cutting some rich people’s taxes would, say, create more jobs. The tax cuts go through, but we never hear any more about the jobs. Makes you wonder whether it was just a story we were told.
So, what’s the story with this fabulously desirable thing called productivity?
What we do in the economy is take a bunch of resources – labour, capital, equipment and raw materials – and transform them into a host of the goods and services we use to live our lives. When the output of goods and services grows faster than our input of resources grows – when our production processes become more efficient – economists say our “productivity” has improved.
Which means we’re better off. More prosperous. Believe it or not, our productivity has improved a bit almost every year since the Industrial Revolution. How? Mainly by us inventing better machines, finding better ways to do things and having a better-educated workforce.
It’s this huge improvement in our productiveness that’s given us a standard of living many times better than it was 200 years ago. Our homes, our health, our food, our entertainments and our possessions are far better than they were.
What’s worrying the great and the good is that this process of small annual improvement in our living standards seems to have stalled about a decade ago. They don’t actually know why it’s stalled, or whether the stoppage is temporary or permanent.
But the people at the top of our economy are worried by the thought that, unless we do something, our standard of living may never go any higher. This thought appals them, and they assume it appals us just as much. We’ve got used to ever-rising living standards, and for this to stop would be disastrous.
Well, maybe, maybe not. What no one seems to have observed is that this is a completely materialist view of how our lives could be better. Better goods, better services and a lot more of both.
My guess is that, for the managerial class, more money to buy bigger and better stuff is what they most want. But I’m not sure if that’s what the rest of us want – especially after we’d given some thought to the alternatives.
If an ever-higher material living standard came free of charge, of course we’d all want it. But if it came at a cost – as it’s likely to – we’d have to think harder about the price and what we’d have to give up to pay it.
When the big business lobby groups argue that our productivity has stopped improving because their taxes are too high and the Labor government has introduced too many regulations controlling how they pay and treat their workers, sometimes I think what they’re saying is: we could make you so much richer if only you’d let us make your working lives a misery.
In a recent article for Project Syndicate, Dani Rodrik, a Harvard economist, argues that most working people probably want a good job more than higher pay. “When people are asked about wellbeing and life satisfaction, the work they do ranks at the top, along with contributions to their community and family bonds,” he says.
This is something economists keep forgetting. In their simple theory, work is a pain. And the only reason you do it is to get money to buy the stuff you want. The bad bit is work; the good bit is consumption.
In truth, most of us get much of our identity, self-worth and satisfaction from our jobs. Some people hate their jobs, of course, but that’s the point: they would be a lot happier if they could find a job they enjoyed.
Rodrik adds that jobs can be a source of pride, dignity and social recognition. It’s clear that Australians hugely value having a secure job. One where they don’t have to worry about where their next meal’s coming from. Where they know they’ll be able to keep up their mortgage payments. Where their job classification is permanent, not temporary.
Good pay is nice, but work is about a lot more than pay. Psychologists tell us that job satisfaction is helped by having a degree of autonomy in the way you do your job. A more obvious need is a boss who treats you fairly and with respect. No one wants to work for an idiot who thinks they should treat ’em mean to keep ’em keen.
I have no doubt that all workers want the pleasure of being loyal to their boss and their company. But they have to be receiving loyalty to give it back.
So here’s my radical thought: what if, instead of pursuing an ever-higher material living standard, governments focused on improving Australian workers’ job satisfaction? Would that be better or worse? A good way to lose votes? I doubt it.
It could even be that a more satisfied workforce was more productive.
