When Australia’s latest GDP figures were released this week, media outlets around the country, including Guardian Australia, almost unanimously ran with the line celebrating that Australia had gone 26 years without a recession.
It is a worthy historical marker to applaud, but for workers at the moment, the records being broken are unlikely to bring much applause.
Twenty-six years without two consecutive quarters of negative growth is certainly a long time — even if you think that is a daft definition of a recession.
Over that period, Australia’s economy has grown almost as well as any other country in the Organisation for Economic Co-operation and Development (OECD).
Of the 26 OECD countries that existed in 1991, only Ireland, South Korea, Turkey and Luxembourg have grown faster than Australia.
Avoiding recessions is no small thing — they wreck lives. It took a decade for the percentage of Australian adults in employment to return to pre-1990s recession levels.
The 1990s recession led to people in their 50s losing their jobs and not working again.
If Australia had the level of unemployment that was reached in 1992 rather than the current number of 744,000 people unemployed, we would be talking about 1.4 million people — that is a lot of families struggling to survive.
For years it seemed the country was destined to have recessions at least once a decade — it had one in the early 1960s, early 1970s, early 1980s, early 1990s and a couple of others in between.
Then from 1991 onward, it appeared Australia had discovered the secret recipe for avoiding them.
It had the central bank target low inflation and on the government side it saw “the end of big government,” privatization of public assets, greater industrial flexibility, fewer labor disputes, lower income and company tax, higher consumption tax, greater competition and lower tariffs.
For 15 years the recipe seemed to work. Then the global financial crisis happened and the world got food poisoning.
While Australia might have avoided a recession in technical terms, it certainly has not returned to any sense of solid economic growth since then.
The government do not seek GDP growth for its own sake; it seeks it because it is supposed to lead to improved standards of living for people.
If you want to take credit for the good times of those 15 years from 1991 to the global financial crisis, you need to also accept that the recipe has not worked in the decade since then.
The talk of 26 years of uninterrupted growth is also a good time to remind people of how much the recipe has changed Australia.
In 1991, about 40 percent of workers were in a union, now it is about 15 percent, and not unrelated is the fact that in 1991, 55.7 percent of national income went to employees; in March it was just 51.5 percent — the lowest share since 1964.
Australia might have not experienced a recession since a time when Daryl Braithwaite was topping the charts, but the share of national income going to employees is now at the same point it was when The Beatles toured the country.
That difference in the share of income going to employees is equivalent to about US$17 billion in the March quarter.
While it might be all well and good to say Australia has avoided a recession, for nearly five years now it has also avoided any rises in real wages.
The GDP figures on Wednesday revealed the biggest annual fall ever recorded in real labor costs.
They also showed that nominal unit labor costs — ie the amount paid to labor to produce a unit of output — have not grown since 2012, but in that time real labor costs, which take into account inflation, have fallen nearly 6 percent.
Such a fall should have business groups singing the praises of the system — that Australia is becoming “more competitive,” that labor costs are falling, but no.
This week the only talk about labor costs from them was the decrying of the 3.3 percent rise in the minimum wage by the Fair Work Commission.
Such a response was not unexpected — there is never praise for labor costs falling, only complaints that they ever rise at all; no consideration that real wages have not grown for nearly five years, only a greater drive to cut actual wages through the removal of penalty rates.
The Liberal Party went to the last election preaching the mantra of “jobs and growth,” and pledged to deliver that by using the same recipe.
Since then growth has slowed from 2.6 percent to 1.7 percent and while the unemployment rate has remained steady at 5.7 percent, wages growth has fallen from a then record low of 2.1 percent to an even lower mark of 1.9 percent.
Is this the bounty Australians receive from 26 years of uninterrupted growth?
For the party, the moves to alter the recipe have been slow, but steady.
Any proposals counter to the recipe — such as keeping the top income tax rate at 47 percent, talking up the importance of equality over growth, or the need for greater union power — are met with conservative critics turning up their noses and crying socialism.
However, as the UK election showed this week, the people seem more than ready to give such a meal a go.
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