In a comment to my post on the intergenerational report/, Butters wrote
you regularly claim the labour market is re-regulated but produce no evidence.
It would be nice to see some.Labour productivity figures are not the ones to look at.
Perhaps you should read Ross Gittins before commenting again.
I replied
Butters – the use of labour productivity growth is pretty standard and used in Treasury, the OECD and elsewhere. Sure, multi-factor productivity (or total-factor productivity as some term it) would encompass other sources of productivity growth (and decline). But there are problems with the measurement of MFP. That said, the use of labour productivity is entirely consistent with measuring the impact of labour market regulation. As to the effect of re-regulating the labour market (and you’d have to be hiding your head in the sand to not realise that Fair Work Australia and “simplified awards” are not re-regulating the labour market), this is a standard result and well accepted in the economics profession. That is, increasing employment protection legislation is likely to reduce labour productivity growth (other things equal). You can check numerous OECD studies on this, and take the word of Ken Henry. Check out his speech here here among others.
Well look at this example of labour market re-regulation. Fair Work Australia looks like it is out of control.
Taking up the example of re-regulation, which happens to be in the aged care industry, the main finding of the late Warren Hogan’s major inquiry into aged care was the pervasive impact of regulations on the ability of care providers to innovate and make the best use of their capital investments. Someone tell Mr Rudd about this the next time he talks about the need for greater productivity to handle the ageing population.
Rafe
4 Feb 10 at 8:03 am
What bothers me most is that it will be more difficult to negotiate changes in work practices.
Many of them are – and have been for many years – large impediments to productivity improvements. Many of the agreements made under Work Choices as well as previous deregulatory regimes going back to Keating were aimed at increasing flexibilty in work practices in exchange for more money.
ken nielsen
4 Feb 10 at 9:32 am
no Samuel those parties would have had to go to a tribunal under the previous Government. It was merely called a different name.
One also couldn’t change things if it involved workers being worse off.
a very poor example.
All productivity figures are residuals. They are merely figures plucked out of National accounts once everything else is produced and are only to be examined over the long term.
A person called Robert Gordon in the USA is a god guide.
you should read Gittins again as labour producity is poor. Perhaps even read the Productivity commission’s report.
on the other hand you perhaps shouldn’t. it found Mining ,yes Mining went backwards. Wow all those AWAs and it went backwards.
gosh you suport re-regualtion that meant an Industry went backwards on labour producivity.
Well done old son.
in the 80s there were numerous articles written about the productivity paradox. you might read some of them.
Oh did you realise that Unions CANNOT sign an EBA. They can negotiate one but cannot sign one whilst they could under the previous regime.
Butterfield, Bloomfield & Bishop
4 Feb 10 at 12:24 pm
A person called Robert Gordon in the USA is a god guide
Do you go to him for theological advice, Homes?
jtfsoon
4 Feb 10 at 12:25 pm
if you had heard of him Statman then you would give Samuel some good advice.
Like most crackpots here evidence is as scarce as hens teeth and then he kicks an own goal.
Economists know very little about productivity.
The Management journals have much better articles on labour productivity than any economics journal
Butterfield, Bloomfield & Bishop
4 Feb 10 at 12:29 pm
‘management’ literature is by and large written by wankers for wankers.
jtfsoon
4 Feb 10 at 1:18 pm
“‘management’ literature is by and large written by wankers for wankers.”
You left out “… to make more work for wankers”
FDB
4 Feb 10 at 1:19 pm
Persuasive and thoroughly argued case, FDB.
Thanks again.
C.L.
4 Feb 10 at 1:28 pm
Statman again providing a thoughtful piece.
Typical of catallaxy actually.
Oh yeah it was the academics at business schools who found out why the cuts in costs never increased productivity in the US. Most economists did not have a clue.
Butterfield, Bloomfield & Bishop
4 Feb 10 at 2:12 pm
wow Homer, low skilled labour done by lots of Mexixan illegals will depress productivity figures relative to increased automation.
who knew? of course we needed ‘management professors’ to tell us that.
jtfsoon
4 Feb 10 at 2:15 pm
Another suggested reading from BBB. I think we can safely assume that unlike P.P. McGuinness, upon your passing there won’t be a book sale, but rather a trailer going to the tip.
Infidel Tiger
4 Feb 10 at 2:21 pm
err no it was for a completely different reason ( hint think customers) but thanks for showing us how an ignorant wanker explains a topic
Butterfield, Bloomfield & Bishop
4 Feb 10 at 2:22 pm
Homer
there may be a hundred different reasons why wage increases can improve productivity. They are all within the realm of economics to explain.
Stop yanking that chain,
jtfsoon
4 Feb 10 at 2:25 pm
how the fuck can you expect to guess what’s in that feeble head of yours when you say ‘was the academics at business schools who found out why the cuts in costs never increased productivity in the US’?
which cuts in what costs in what industry?
none of this is outisde the realm of economics – efficiency wages, implicit contracts, simple capital labour substitution effects, etc
jtfsoon
4 Feb 10 at 2:27 pm
who is talking about wage increases Statman.
the early 90s was known in the US of the producitivty paradox. Companies ( note the plural and it was across the board)were cutting costs , as they were told to do, however productivity fell it didn’t rise.
Butterfield, Bloomfield & Bishop
4 Feb 10 at 2:31 pm
golly gee Homer
the productivity paradox was discussed by economists such as Robert Solow and referred to the lag in productivity improvements from the adoption of ICT
http://www.csls.ca/journals/sisspp/v32n2_04.pdf
I guess you didn’t do your reading again
http://en.wikipedia.org/wiki/Productivity_paradox
jtfsoon
4 Feb 10 at 2:35 pm
who forced the companies to cut their costs Homer?
are you now saying companies shouldn’t cut their costs.
also no mention of ‘customers’ in the debate on wiki. it’s all about slower productivity than expected from using IT.
golly gee fancy that !!!!
jtfsoon
4 Feb 10 at 2:39 pm
“The Management journals have much better articles on labour productivity than any economics journal”
This should be a caption to a photo of a donkey riding a man, being pulled by an upturned haycart.
Semi Regular Libertarian
4 Feb 10 at 2:57 pm
Homer:
Last year you were sending people to management journals for articles on economics.
Is this for you some sort equivalent to reading playboy for its articles on politics?
JC
4 Feb 10 at 3:04 pm
Fabulous news from the link.
“We think Commissioner Smith was right,” she said. “You cannot reduce the national employment standards even by agreement.”
It’s ;ittle things like this that make labor market re-regulation so attractive.
Homer of course thinks it’s a productivity booster.
JC
4 Feb 10 at 3:08 pm
The reason that mining productivity slowed has been analysed by the Productivity Commission – it was capital deepening and the PC expects that mining labour productivity growth to increase as the new capital comes on line.
Samuel J
4 Feb 10 at 11:13 pm
http://www.theaustralian.com.au/news/nation/julia-gillard-calls-time-on-young-matthew-spencers-job/story-e6frg6nf-1225826908331
http://www.theaustralian.com.au/business/mining-energy/rio-tinto-warns-of-pilbara-industrial-relations-war/story-e6frg9df-1225826908285
Butters – it is tiresome that you continue to sprout the Union line but it absolutely clear that the new IR legislation has reduced workplace flexibility and led to a dramatic rise in days lost to disputation. There is no doubt that the labor market has been re-regulated and there is little doubt that this will (other things being equal) increase the sustainable unemployment rate (NAIRU or natural rate of unemployment). Ultimately the laws reduce the growth of our standards of living.
Samuel J
5 Feb 10 at 6:54 am
Statman no wrong again. Golly using wikipedia to find out something. That shows great research skills.
By the way Gordon poop oohs that argument and that IS in economic journals even ones read by wankers.
oh by the way there is/was a quite vigorous debate about this in the economic profession however that won’t be in Wiki
Fellas a wee bit of reading would have found the previous regime also had a no-disadvantage rule in it.
It ain’t re-regulation at all it is exactly the same.
Go on Samuel capital deepening golly you mean all those ‘flexible’ new deals meant that productivity went backwards. wow.
What is tiresome is that you cannot produce any evidence to back up your tiresome ideology.
err if you actually read most of my arguments are not supported by any Unions but that would require some reading.
Butterfield, Bloomfield & Bishop
5 Feb 10 at 9:06 am