Monday, December 3, 2012

Working Harder, Longer or Smarter?

With the Working Population Data from the 2011 Census released on November 20th, Urban Economics has delved into the working hours of Australian’s with comparison to other OECD nations. Surprisingly (or maybe not), Australians aren’t the hardest sloggers out there….

We begin our whirlwind working tour in Mexico which most of us might associate with the ‘siesta’ under a sombrero and not a whole bunch of productivity. On the contrary, Mexico tops the list of annual hours worked at 2,250 per annum. Even as I write this article I can’t help but think that maybe the Mexicans are on to something until I recall that they also have the world’s highest homicide rate at 19 per 100,000 persons.

From the longest working year to the shortest working year in the OECD more surprises ensue. Germany despite often being recalled as a manufacturing powerhouse has an average working year of just 1,406 hours. Perhaps the machines have taken over or perhaps the German theory of ‘Kurzabeit’ (‘short-work’) is at play. Kurzabeit refers to the culture within Germany to reduce the hours of an employee worked as opposed to sending them to the unemployment line in slower economic conditions.
If machines taking over car manufacturing is put forward as the reason for a relaxed working year, Japan and Korea throw water on the welder. The Koreans also undertake a long working year; 2,090 hours as reported by the OECD through 2011. Again however, the working hours appear to be a cultural phenomenon as they have adopted an ‘industrious’ philosophy. In Japan working longer is thought to be the best way to get en-route to becoming the head ‘shacho’. Interestingly, this mindset starts from schooling age whereby Japanese students attend classes on Saturdays and often follow this up with private classes. Japan however has had a steady decline in working hours, much of which has been attributed to organised labour unions and the Ministry of Trade and has had a drop in average annual hours from 2,031 in 1990 to 1,728 in 2011. Another country whereby government policy has impacted the working profile of the population is Chile, which has a compulsory 45-hour working week for full time employees. Chileans work on average 2,047 hours per year.

With all of the fiscal troubles in the Eurozone, it may be surprising to learn that Greece currently ranks 4th amongst OECD nations for the average number of hours worked at 2,032 per annum. Surely such an industrious population should not be so overwhelmed in debt? Comparisons however must be drawn to Greece’s labour market which includes higher proportions of self-employed persons and agricultural workers and has not as readily adopted the technological changes that countries such as Germany and the Netherlands have used to increase productivity. The saying ‘work smarter, not harder’ likely applies here.

How then does Australia compare and what has the Census Working Profile Data revealed about our productivity, industriousness and employment? As reported by the OECD, Australia’s workers undertake 1,687 hours of work per year on average. Our analysis of the Working profile data reflects a similar 1,713 hours which equates to around 33 hours per week. A further breakdown notes that Queenslanders are working slightly longer at 34.24 hours per week on average. 

Consistently, Australians are working less and less per year on average which coincides with increases in casual employment, job sharing and workers seeking flexibility. Proportionately, those working 40+ hours decreased between 2011 and 2006 from 47.9% to 45.3% and those working less than 40 hours increased.  Under Fairwork Australia, employers must not request or require employees to work more than 38 hours per week unless ‘reasonable’.

Other shifts in our working profile between the intercensal periods of 2006 and 2011 include:
·        A slight increase in the proportion of women in managerial positions from 34% to 35%
·     Reductions in the proportions of persons working in the manufacturing, agricultural and retail industries
·        Increases in the levels of persons employed in healthcare, social assistance and mining.
·        The private motor vehicle remained the primary method of travel to work but there was a modest increase in the number of those utilising public transport
·       Despite advances in technology, the proportion of those working from home dropped from 4.8% to 4.4%

With Gina Rinehart’s recent comments on Australia’s productivity and ‘African labourers willing to work for $2 per day’, some may wonder in that case how we remain competitive at all. Parallel Greece and Germany and one can see the impact that technology and innovation can make. In mining terms, the pick and shovel wielded by an African labourer is no more a substitute for a Caterpillar D-9 bulldozer, than the hundreds of thousands of Brazilian workers that enter the cane fields of Brazil are for a Case cane harvester. 

As Australia continues to innovate and adopt technology as well as embrace our enviable laid back lifestyle, we can expect that working hours will continue to decrease as we work smarter, not harder or longer.

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