In the face of the latest post-budget concern by the commentariat that there will be a wages break out under Labor’s Industrial Relations regime, the Government is at pains to assure us that wages will only increase by improvements in productivity.

Productivity increases for wage increases have been a feature of Australian IR since the days of Hawke’s Wages Accord. While productivity is certainly an important factor in wage remuneration, it cannot logically be the only determinant. For example, a worker employed in the public sector would have to be twice as productive to earn the same relative amount once the cost of living has doubled. Read more »