A new report indicates that while worker productivity is way up, wage growth for the majority of Australians is stagnant. What’s behind this negative trend? And what are the repercussions for workplaces?
Some good news first: Australian labour productivity is outstripping comparable developed nations. As of June 2016, the economy grew 3.3 per cent, and has bucked the global trend by weathering 25 years without suffering a recession. Before getting too carried away with national pride, brace yourself for the bad news. All this success has come on the back of an increasingly impoverished middle-class. Australians are experiencing a three-year decline in wage growth and significant projected declines in their disposable income, according to new research from the McKell Institute, a progressive think-tank.
This isn’t part of a global trend. In the US and Canada, middle-class incomes have risen since the GFC and are continuing to rise, whereas incomes in Australia are in reverse gear. The McKell report says the average Australian annual income has seen a 2.7 per cent reduction since 2012, and concludes that wage growth will stall in the coming years.
“Currently, the average weekly wage for an Australian is $1,145.70. However, this is expected to only grow in real terms to $1,243 per week by 2020. This growth is incredibly slow by Australian and international standards alike, and highlights the threat to the continuation of Australia’s middle-class standard of living,” says the report.
Labor leader Bill Shorten, commenting on the figures at the McKell Institute on Thursday, says: “We must begin by recognising existing insecurities and frustrations are not imagined, or insignificant. Millions of Australians are working harder and longer than they did a decade ago – but have less to go around each week.”
Rising levels of financial stress due to stagnant wage growth manifest most visibly in personal debt default, negotiated compromises with creditors and bankruptcy.
Financial issues are the chief cause of stress and anxiety among Australians. The Stress and Wellbeing in Australia survey and the Australian Psychological Society both report increasing levels of stress and distress since 2011. It’s particularly evident among younger people who have been locked out of the property market and who are saddled with high levels of debt after completing a university degree.
These tensions and anxieties around financial insecurity naturally spill over into workplaces. While it’s helpful to be aware of the bigger context, what can human resources usefully do to alleviate workplace stress?
First of all, this is a health and safety issue and comes under the OHS Act. As such, employers are required to address workplace stress using a risk management framework.
Employee-focussed approaches such as counselling, relaxation training, time management skills and stress management training can help staff to develop greater resilience to deal with personal and professional anxiety.
Stress management programs usually teach people about the nature of stress and its effect on health while equipping them with skills to reduce symptoms such as sleep disturbances. They are also relatively inexpensive to implement. Mindfulness or meditation courses have also been shown – repeatedly – to have a positive effect on mood and anxiety.
There is still a great deal more that workplaces can do. A recent survey by MinterEllison shows that 56 per cent of respondents reported an increase in the number of mental health cases year-on-year, with the two most common issues being depression and anxiety. Despite this, a majority of participants said they don’t measure the impact of staff mental health issues in their organisation and 74 per cent lack formal and specific mental health policies or procedures.
Given that the Australian workforce is pulling its weight and driving economic prosperity, the demand for employers to start investing much more in the health and wellbeing of their employees grows ever louder.