The Productivity Commission (PC) has declared that if Australia is to experience continuing wage and productivity growth, it will have to come largely from service industries.
In a new report, Things You Can’t Drop on Your Feet: An Overview of Australia’s Services Sector Productivity, the Commission noted that services accounted for 90 per cent of Australian employment and 80 per cent of output.
In a statement, the PC said that slowing productivity and wage growth was a source of concern across the developed world, which had only been amplified by the economic challenges imposed by the COVID-19 pandemic.
“Services are very diverse,” it said.
“From cleaning to medicine, the skills service workers require vary tremendously, as have the sub-sectors’ productivity changes.
“Some perceive service sector work as being poorly paid, yet services employees are paid more on average per hour than manufacturing workers.”
It said services sector jobs overall were no more likely to be casual than other jobs in the economy.
The PC report found that the characteristics of some services could limit scope for their productivity growth.
“Many services are delivered face-to-face, improved business practices can be harder to implement and the quality of a service can be difficult to establish before purchase,” the PC said.
“Technology is enabling services to be provided remotely, accelerated by forced changes during the COVID-19 pandemic.”
As examples of this, the report cited doctors providing telehealth consulting, restaurants joining online delivery platforms and office workers using flexible work arrangements.
The Productivity Commission said this report was the first of a new series looking at individual service industries, their unique features and factors affecting their productivity performance with bespoke analysis.
The 48-page report can be accessed at this PS News link.
