One of AFRs resident business accomplices, Ronald Mizen, argue the record profits made by mining companies in recent years have skewed the debate about wages versus profits.
Mizen claims that when mining is removed from total profits, non-mining profits have fallen from around 22% of total factor income in the early 2000s to around 18% in 2022, which contradicts union suggestions according to where wages do not follow benefits:
Gianni La Cava, director of research at the e61 Institute and a 20-year veteran of Reserve Bank research, suggested that simplistic wage-to-benefit comparisons were of no use for serious debate.
“The rise in the share of corporate capital in recent years is due to two sectors: mining and finance. When you eliminate these sectors, the capital share has been stable for a while”…
[Business Council CEO, Jenniffer Westacott] accused unions of crafting an ‘us versus them’ narrative by focusing on a ‘simplistic’ view of declining workers’ income shares.
Everyone knows that the mining sector is making record profits. Heck, MB writes about this every day. So why didn’t Ronald Mizen or the Business Council call for super profits taxes or export levies?
Furthermore, while total profits have certainly been skewed by the mining sector, the fact is that workers’ share of national income has collapsed to historic lows.
More damning is Australia’s Real Unit Labor Cost (ULC), which according to the Australian Bureau of Statistics “are an indicator of the average cost of labor per unit of output produced in the economy” and “are a measure of the costs associated with the employment of labor, adjusted for labor productivity”crashed 6.3% below its pre-pandemic level in the March 2022 quarter. True CSU has also crashed over the past 35 years:
Therefore, Australian wages have actually been disinflationary for the Australian economy as the cost of employing workers has become cheaper over time.
In turn, workers fell back while productivity rose and profits soared. Yet the business comrades in FRANCE continue to demand “wage moderation” from workers, while ignoring profits.
Juking the stats to answer a narrative doesn’t change those facts.