TJ Ryan Foundation Research Associate, David Peetz, writes in The Conversation (25.8.22) about the Albanese government’s coming jobs summit, stressing that today’s economic conditions are very different from those that informed Bob Hawke’s 1983 economic summit.
‘To those old enough, Prime Minister Anthony Albanese’s Jobs and Skills Summit brings back memories of Bob Hawke’s National Economic Summit conference, held the month after his 1983 election victory. But they are very different animals in very different contexts.
‘In the 1983 summit, the context was high inflation and unemployment, fed by high wages growth. Profits were squeezed. The unions had to be persuaded to restrain wages demands, and the Prices and Income Accord of February 1983 had achieved that. The summit reinforced that consensus.
‘In 2022, the context is high inflation and low unemployment. Unions are much less powerful than they were in 1983. Rising prices are feeding into rapidly growing profits, and corporations benefit from shortages and market concentration by pushing up prices in numerous areas. That’s how markets work in times of shortages.
‘… So the task for Albanese would be much harder than that facing Hawke, if the jobs summit were aimed at inflation. It is not. Its agenda is about full employment, productivity, job security, wages, labour force participation, skills and the labour force aspects of industrial change.’
Many jobs summit ideas for wages don’t make sense – upskilling does
Michael Keating writes in The Conversation (25.8.22) about the upcoming national jobs summit, arguing that – of the many job-boosting ideas being floated by pundits – the best way to increase wages is to invest in education and skills.
‘Treasury’s issues paper for the jobs summit says fair pay and job security “strengthen communities, promote attractive careers and contribute to broad-based prosperity”. But it notes “many Australians have not experienced real wage gains”.
‘It says real (inflation-adjusted) wages have grown by only 0.1% per year over the past decade and have declined substantially over the past year. It is important to note Australia is not unique.
‘In Canada, France, Britain and the United States as well as in Australia, real wage growth has been much lower in the 12 years preceding COVID than it was in the decade before that. The critical question is why. Good policy depends on the answers.
‘… It is entirely possible that if we were able to successfully address the structural causes of low wage growth, we could accelerate wages growth and thus consumer demand, which would accelerate productivity growth, giving us wages growth without a wage-price spiral.’