Productivity. Wage Growth. Effective Bargaining. Members need to get involved!
The term ‘cost-of-living crisis’ is a term we are all familiar with in these challenging economic times.
Depending on who is using the term—political parties, the media, employers, employees, unions, aid/charitable agencies—there may be variable accusations of who is at fault and what should be done.
No matter who or what, for employees, wage growth can not only assist with their cost of living— if the wage rise is significantly valued—it may boost their productivity through feeling better valued in their role.
In a recent article by Ian Verrender, ABC News Online, he discussed a television debate where the question of ‘flagging productivity’ was raised and what could be done to fix the problem.
One key concern was the misconception that ‘profitablity’ is confused with ‘productivity’; therefore, solutions offered “will make the “problem” even worse”.
The misconception that higher wages reduce profitability
Not offering a suitable wage increase may affect overall company morale, which in turn may see experienced, vital staff leave the business and go elsewhere to be appreciated and better paid.
Job and Skills Australia note: “Higher rates of job mobility can be detrimental to businesses in several ways, including reduced productivity, increased time spent on recruitment and training, as well as a loss of experience in the business.”
This could lead to productivity and profitability loss.
And as Verrender notes “… oddly, the [lower] wages logic doesn’t apply in mahogany row where bonuses, short and long-term, are required to enhance performance.”
Could ‘mahogany row’ also be interpreted as costly, elaborate, new open-plan school buildings with ‘space and visual appeal’; that could instead be lower cost, more traditional school buildings, which may suit the teaching (and learning) of students that need quieter, less distracted space; and, where reduced capital expenditure now funds real wage increases to reward employees?
Effective Bargaining can support wages and productivity
In “Working Future: The Australian Government’s White Paper on Jobs and Opportunities” they note:
“Bargaining at the workplace level can provide higher wages and conditions, and more productive workplaces. By allowing workers to seek wages and conditions above the safety net [or department level] and facilitating agreements that enhance work and management practices, bargaining can support more productive businesses. Collective bargaining can also promote more cooperative employee and employer relations. This in turn can facilitate innovation, greater acceptance of new technology and fostering of skills growth for employees – all of which enhance productivity.”
Paying staff at a level that is comparable to another business may seem an equitable solution, but the reality is that many comparable businesses are not always equal on terms, conditions or benefits to the employee. Therefore, wage levels may not be reflecting the ‘extra’ workloads being undertaken.
Education is not a typical manufacturing productivity measurement
Verrender points out that “around 80 per cent of Australian workers are employed in some kind of service industry such as tourism, education or aged care” which are very difficult industries to measure productivity.
“Is a teacher more productive with 60 students than with 30? Is an emergency unit specialist more productive because she treated 50 patients instead of 10 in three hours? In both instances, arguably no.”
From our experience, and member feedback, more students per class does not increase productivity; it is more likely to do the opposite. Given that each student is an individual and may require specific resources or assistance to learn (and subsequent administration reporting), adding more students with varied needs seems more likely to reduce productivity.
It is reasonable to argue that productivity is not a measure that should be used in schools; learning outcomes and employee satisfaction may be the better measures.
Members need to get involved!
If members want better wages, conditions and change at their workplace, it is important that they ask more colleagues to join the IEU, so that you have the collective voice at the bargaining table.
Want to know more about getting involved? Speak to your IEU(SA) Sub-Branch Representative (Rep) at your school. Your Rep and IEU Organiser (from our office – 84100122 or enquiries@ieusa.org.au) are ready to assist.
Sources:
https://www.abc.net.au/news/2025-05-27/productivity-wages-growth-australia-mining-boom/105338488
https://treasury.gov.au/sites/default/files/2023-10/p2023-447996-05-ch3.pdf
