Australian Workers Are Overpaid & Hard To Fire, Says US Economist

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Image: heraldsun.com.au

An American economist has blamed Australian workers for a struggling economy because they “get too much pay, too much annual leave, and are too hard to fire”.

Bob Baur, chief global economist at Principal Global Investors, said the local labour market was in need of reform if the economy was going to shift from its dependence on mining for growth.

Dr Baur said Australia needs to start making things again, and exporting its services, like education.

But, with the Australian dollar still too high and the labour market too restrictive, it’s hard to do business here, he said.

“The best thing for Australia would be some significant economic reform in terms of maybe loosening up the labour market and making it easier for businesses to take on workers or let workers go in difficult times,” Dr Baur said.

“You’ve got tonnes of wonderful natural resources here but don’t export the resources — export them as a car, or a computer or a television set, or furniture.

“You need to put some labour into it and make something of it here, rather than let somebody make something of it across the world.”

Dr Baur said that Australia needs to start looking to the US, where the manufacturing industry is thriving again after having lost six million jobs to the cheaper labour markets of China and India.

While rising wages in developing countries and increased transportation costs had made the US much more competitive, manufacturing continues to deteriorate in Australia.

“Wages are too high,” Dr Baur said.

“Either it’s the actual level of wages or it’s the fact that it’s very difficult for businesses to let somebody go for whatever reason — some combination of that.

“In the US, we get two weeks’ vacation, so three or four weeks at one time (as in Australia) is not something that’s natural, at least in the US — it is in Europe, but then, Europe is not growing terribly fast either.”

Meanwhile, Australian Unionists have slammed these statements, with The Australian Council of Trade Unions saying that Dr Baur’s suggestions are ludicrous.

“It’s outrageous to suggest that Australian workers should take a pay cut,” said ACTU secretary Dave Oliver.

“Wages growth is at a record low, productivity growth is high and yet workers’ share of the pie keeps diminishing.”

Rather than excessive workers’ rights, Mr Oliver blamed the Abbott government for killing the local car manufacturing industry and driving jobs offshore.

“Australian workers are already doing their bit,” he said.

Source: AAP

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