Extract from The Guardian
Exclusive: increasing structural inequality and gender pay gap put a drag on economic growth, says Chifley Research Centre
A new paper produced by the inclusive prosperity commission
attached to Labor’s official thinktank, the Chifley Research Centre,
says inequality in Australia is on the rise, and structural inequality
puts a drag on economic growth.
Middle Australia is facing an income squeeze, and the gender pay gap has widened significantly since the mid-2000s, according to the research which aims to recalibrate the policy conversation around economic growth in the lead-up to the ALP’s national conference this weekend.
The research says for the past 25 years, Australia has bucked an international trend of runaway inequality and wealth concentration that has shrunk the middle class in the US and Europe – but there are signs of a shift in this country.
The paper will be launched in Sydney on Monday evening and presages the economic policy debate at the national conference on Friday – a debate that has thus far been overshadowed by looming conference flash points including asylum boat turnbacks, rule changes and whether there will be a binding vote on same-sex marriage.
“The threat of rising inequality is critical policy context for major debates at Labor’s conference on fiscal policy, tax policy, industrial relations and trade – a pro-equality platform will be a pro-growth platform,” said the Chifley Research Centre’s executive director, Michael Cooney.
The new paper is the first work produced by the inclusive prosperity commission, which is led by Cooney and the former Labor treasurer Wayne Swan.
The commission project is underway in partnership with the Clinton-linked US progressive thinktank, the Center for American Progress, and is headed by an advisory group of seven commissioners, which includes the former group chief executive officer of National Australia Bank, Cameron Clyne, trade union boss Dave Oliver, social researcher Rebecca Huntley and the executive director of the Brotherhood of St Laurence in Melbourne, Tony Nicholson.
The report is produced in the context of a global policy conversation about the link between rising inequality and sluggish economic growth which has been sparked by work from the World Bank and the International Monetary Fund and by French economist Thomas Piketty’s influential and best selling book Capital in the Twenty-First Century.
The foreword notes the IMF managing director, Christine Lagarde, has recently noted the world’s 85 richest people control more wealth than the world’s 3.5bn poorest people, and this degree of inequality is casting a “dark shadow” over the global economy.
The inclusive prosperity commission notes income inequality has been rising in Australia, and growth in wages since 2000 has failed to keep pace with productivity improvements. “Since 2000, there has been a significant ‘decoupling’ where wages have failed to keep pace with productivity improvements,” the report says.
“Decoupling does not necessarily imply declining living standards for workers – average real wages grew solidly in Australia up until 2012 – but it does imply rising inequality with middle Australia missing out on a growing share of income growth, and it does pose risks to future productivity improvements.”
Swan argues in the foreword to the report that the trend means workers are benefitting less from improvements in productivity and the labour share of income is declining. “This appears as a direct consequence of weakening labour market institutions and a decline in union representation and employee voice in the workplace.”
The report also references the widening gender pay gap evidenced since the mid 2000s. “Of concern for Australia is that since mid-2000, the gender pay gap has increased significantly.”
The report says this trend is multifactorial. “Several factors contributing to this gap include: female dominated industries and jobs tending to attract lower wages; relatively fewer women in senior positions; workforce absences due to caring responsibilities; and discrimination.”
“Other factors include: low wages and job security in the government-funded services sector impacting social and community work mainly performed by women; and the tendency for more women to be employed in part-time and casual positions reliant on a safety net which has diminished over time,” it says.
Swan says the evidence both in Australia and globally suggests tackling inequality is an important part of achieving wealth creation and growth when technological disruption is causing dislocation in the globalised economy.
The paper contains no concrete recommendations, but Swan says trends leading to the concentration of wealth and inequality “can’t be countered simply through market competition, incentives for workforce participation and education and training”.
“Rather, a much more muscular mix of healthy labour market institutions, prudential design of financial markets and corporate governance, and job-biased growth across all the sectors of the economy is required,” he says.
“This demands very new government policies, but also very different capital and financial market incentives for the leaders of public and private firms.”
Middle Australia is facing an income squeeze, and the gender pay gap has widened significantly since the mid-2000s, according to the research which aims to recalibrate the policy conversation around economic growth in the lead-up to the ALP’s national conference this weekend.
The research says for the past 25 years, Australia has bucked an international trend of runaway inequality and wealth concentration that has shrunk the middle class in the US and Europe – but there are signs of a shift in this country.
The paper will be launched in Sydney on Monday evening and presages the economic policy debate at the national conference on Friday – a debate that has thus far been overshadowed by looming conference flash points including asylum boat turnbacks, rule changes and whether there will be a binding vote on same-sex marriage.
“The threat of rising inequality is critical policy context for major debates at Labor’s conference on fiscal policy, tax policy, industrial relations and trade – a pro-equality platform will be a pro-growth platform,” said the Chifley Research Centre’s executive director, Michael Cooney.
The new paper is the first work produced by the inclusive prosperity commission, which is led by Cooney and the former Labor treasurer Wayne Swan.
The commission project is underway in partnership with the Clinton-linked US progressive thinktank, the Center for American Progress, and is headed by an advisory group of seven commissioners, which includes the former group chief executive officer of National Australia Bank, Cameron Clyne, trade union boss Dave Oliver, social researcher Rebecca Huntley and the executive director of the Brotherhood of St Laurence in Melbourne, Tony Nicholson.
The report is produced in the context of a global policy conversation about the link between rising inequality and sluggish economic growth which has been sparked by work from the World Bank and the International Monetary Fund and by French economist Thomas Piketty’s influential and best selling book Capital in the Twenty-First Century.
The foreword notes the IMF managing director, Christine Lagarde, has recently noted the world’s 85 richest people control more wealth than the world’s 3.5bn poorest people, and this degree of inequality is casting a “dark shadow” over the global economy.
The inclusive prosperity commission notes income inequality has been rising in Australia, and growth in wages since 2000 has failed to keep pace with productivity improvements. “Since 2000, there has been a significant ‘decoupling’ where wages have failed to keep pace with productivity improvements,” the report says.
“Decoupling does not necessarily imply declining living standards for workers – average real wages grew solidly in Australia up until 2012 – but it does imply rising inequality with middle Australia missing out on a growing share of income growth, and it does pose risks to future productivity improvements.”
Swan argues in the foreword to the report that the trend means workers are benefitting less from improvements in productivity and the labour share of income is declining. “This appears as a direct consequence of weakening labour market institutions and a decline in union representation and employee voice in the workplace.”
The report also references the widening gender pay gap evidenced since the mid 2000s. “Of concern for Australia is that since mid-2000, the gender pay gap has increased significantly.”
The report says this trend is multifactorial. “Several factors contributing to this gap include: female dominated industries and jobs tending to attract lower wages; relatively fewer women in senior positions; workforce absences due to caring responsibilities; and discrimination.”
“Other factors include: low wages and job security in the government-funded services sector impacting social and community work mainly performed by women; and the tendency for more women to be employed in part-time and casual positions reliant on a safety net which has diminished over time,” it says.
Swan says the evidence both in Australia and globally suggests tackling inequality is an important part of achieving wealth creation and growth when technological disruption is causing dislocation in the globalised economy.
The paper contains no concrete recommendations, but Swan says trends leading to the concentration of wealth and inequality “can’t be countered simply through market competition, incentives for workforce participation and education and training”.
“Rather, a much more muscular mix of healthy labour market institutions, prudential design of financial markets and corporate governance, and job-biased growth across all the sectors of the economy is required,” he says.
“This demands very new government policies, but also very different capital and financial market incentives for the leaders of public and private firms.”
No comments:
Post a Comment