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Are Australians Unproductive or is the Mining Boom Distorting the True Picture?

As per a PricewaterhouseCoopers report the national labor productivity growth in 2010 slowed down to it’s lowest since 2005 for Australia.

Some economists even say that the Australian will not be able to maintain their standard of living if this productivity growth continues its downward trend. So what’s the deal? Are Australians really unproductive or is the mining boom distorting the true picture?

Jeremy Thorpe a PwC economist said that labor productivity in mining was only going to increase further, as mining investments move to full capacity. However the decline in productivity, which is the amount of output per unit of input, was concerning.

As per Thorpe the concern was further magnified because, when the resources boom eventually runs its course, if we have not seen sustained productivity growth in non -resource industries, then we will be relying on smaller and less productive industries to implausibly sustain our national standard of living.

The PwC report noted that Australia had ranked 11th of 25 OECD countries for labor productivity growth in the 1990s, but had now slipped to 17th of 34 by the 2000s. Nationally, across the 16 sectors in each state and territory, a total of 128 sectors, just over half 69, to be precise, have improved labor productivity in the June quarter.

Glen Stevens the Governor of the Reserve Bank of Australia said that an overhaul of industrial relations laws was required to restore growth in labor productivity. He said that in the current political environment, it's the raw productivity of labor - output per hour worked - that's the focus of attention. He added that while the standard measure of labour productivity, gross domestic product (GDP) per hour worked, is useful, they have to be handled with care.

Joel Scanlon

Written by

Joel Scanlon

Joel, originally from the UK, emigrated to Australia in 1995 and spent 5 years working in the mining industry as an exploration Geo-technician where he developed skills in GIS Mapping and CAD. Joel also spent a year working underground in a gold/copper mine. Upon moving to the North Coast of NSW, Australia Joel worked as a graphic designer for a leading consultancy firm before starting a successful business providing graphic and web design services to local businesses on the eastern seaboard of Australia. Joel is skilled in project management, web programming, design, animation, database and networking, software and editing. Joel has been with AZoNetwork since its inception in 2000.

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