Labour productivity is “soaring” in a period of IR/OHS variability

Mental health, happiness, well being, safety, red tape …. each of these have been linked to productivity recently in Australian discourses but, as has been mentioned previously, productivity has a flexible definition depending on one’s politics and political agenda. There is multi-factor productivity and labour productivity.  Each measure provides different results.  So where does OHS sit?

An article in The Weekend Australian on 27 July 2013 illustrates the flexible definitions and includes a rare acknowledgement on labour productivity.

“On the measure of labour productivity, which captures the output of each worker, productivity growth is in fact soaring, hitting 3.4 per cent in 2011-12. [emphasis added]

But on the broader measure, which includes the use business makes of capital equipment, growth is still a negligible 0.1 per cent and has declined on average 0.7 per cent a year ever since Labor was elected.”

The labour productivity figure is important to remember when one hears about excessive workloads, excessive hours of work and other potential causes for psychosocial hazards.  Of course, such statements can always be tempered by considering the changes to the labour market such as the decline in manufacturing jobs, increase in resources jobs and the increase in part-time work, amongst other factors, but these changes seem to make the 3.4% growth figure even more significant.

As well as the labour market changes mentioned above, labour productivity is “soaring” at a time of declining, or flattening, trade union membership, during a period of substantial change and tweaking to the industrial relations laws, whilst rates of workplace fatalities are declining and claims for stress, bullying and other mental health issues seem to be increasing.

That “the output of each  worker” is increasing during this period or economic and social variability should encourage greater analysis of the factors involved in labour productivity but the business lobby and conservative politicians seem to be addressing business concerns rather than causal factors.  This is illustrated further into The Weekend Australian article under the sub-heading if Industrial Relations.  There is no acknowledgement of the growth figure for labour productivity or options for increasing this productivity further.

The article quotes the common mantra of Australian business groups that

“Smaller businesses complain about the difficulty of managing redundancies, which restricts their ability to adjust to changing market conditions.”

Smaller businesses can complain as much as they want.  But instead of “managing redundancies” industry groups should be helping small businesses to eliminate psychosocial hazards as there is evidence that a happy and safe workforce is also a productive workforce, and a productive workforce increases the profitability of a business by increasing output and production efficiency.  Good safety management will minimise any disruptions to

It is unlikely that the productivity benefits of OHS will be picked up by the political opposition as Australia moves towards an election later this year.  The Weekend Australian in a separate article reported:

“The Coalition is expected to release its productivity agenda during the election campaign, but is refusing to release detail of the findings of a working group tasked with thrashing out how an Abbott government would boost Australia’s flatlining productivity.”

But not all productivity is flatlining and unless all political parties and lobbyists acknowledge this, the opportunities provided by the growth in labour productivity will be missed, and so will the chances for increasing the workplace conditions of Australian workers.

Kevin Jones