Australia has a productivity challenge. For two decades, productivity in most of the economy has stagnated, which means that the amount of goods being produced for every labour hour spent in the economy has flatlined. Economists note that this trend limits an increase in living standards, arguing that productivity gains naturally flow through to increases in living standards.
This conventional wisdom, however, is challenged by cases in the economy where measurable increases in productivity haven’t flowed through to workers’ wages.
This report considers the productivity challenge within Australia’s retail sector, which employs over 1.2 million Australians, and has seen greater productivity increases over the past two decades than in other sectors, but not a proportionate improvement in living standards for its workforce.