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The Forum > Article Comments > The Human Capital Agenda > Comments

The Human Capital Agenda : Comments

By Andrew Leigh, published 30/9/2010

Productivity growth needs to be kick-started again.

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A piece of propaganda to get more taxpayer funding to go to education. Over time, more taxpayer funding has gone to education, and the trade deficit has risen, and anyone can walk through any school or university and try and find a “Made in Australia” sticker. (If they did find such a sticker they should immediately run out and buy a Gold Lotto ticket.)

The author mentions accountability in education. A tick for this, and the ultimate would be to attach the money going to education to a national productivity figure.

If that productivity figure goes up, more money goes to education and teachers salaries. If the figure goes down, the amount of money going to schools, universities and teacher’s salaries stays the same until the figure does go up.

Then we will find out the number of people in education who are actually interested in the country, and not just interested in their own bank accounts.
Posted by vanna, Thursday, 30 September 2010 9:11:43 AM
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Andrew

Usually I’d agree that productivity is key to raising living standards, but economics teaches one important exception to this rule – when the terms of trade are rising. When the prices of our export rise faster than import prices, it means we can get more mobile phones or t-shirts in exchange for each tonne of coal or wheat we export. In short, our consumption possibilities increase by more than the volume of our output.

This is precisely what has happened in Australia in recent years. While real GDP per hour worked (the usual measure of labour productivity) rose by a modest 1.3%pa in the 10 years to 2008-09, real gross domestic income per hour worked (which allows for these terms of trade effects) rose a much more respectable 2.4%pa.

The effect is most obvious in the mining sector, where export prices have rocketed. Labour productivity (measured as the volume of GVA per hour worked) in the mining sector DECREASED by a total of 42% (7.5% a year) between 2000-01 and 2008-09. But the VALUE of output per hour worked rose by 22% over the same period.

Of course, resource prices won’t keep rising for ever, and productivity growth will again be the main driver of improvements in living standards in the long term. But the apparently weak productivity growth in the noughties is less disappointing than you might think.
Posted by Rhian, Thursday, 30 September 2010 3:21:00 PM
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The Australian Institute for Teaching and School Leadership is completely unelected and has not one classroom teacher on its board, which is stacked with delegates from employers in education. Contrast this farce with the Victorian Institute of Teaching, which as a truly professional body connected with classroom reality has half of its governing council elected by and from the teachers and principals of the state, similar in ratio to other state-based professional registration bodies.

It is certain that AITSL will have no trouble in coming up with long-winded, passive voice, Latinate descriptions of professional standards. It is equally certain that classroom practitioners will regard this body with the contempt that it deserves.

A real profession would boycott performance pay, just as a real profession would boycott the pretend teachers of Teach for Australia, which has abandoned the old-fashioned requirement that teachers actually be qualified in education and which places its student teachers (who are given the upmarket name of “associates”) in sole, unsupervised charge of classes after only six weeks of training. The concept is to be expanded to the pretend teachers of Teach Next soon.

Forty years ago, progressive teachers through their unions campaigned successfully to establish the principle that only qualified teachers would be placed in charge of classes. Surely they are not silent today because only disadvantaged students have to put up with these pretend teachers: middle class children are still entitled to fully qualified teachers. I cannot imagine doctors or the AMA taking the same attitude if a “progressive” think tank decided that the requirement to have a medical degree was a barrier to entry to the medical profession.
Posted by Chris C, Friday, 1 October 2010 3:10:17 PM
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What delusional drivel! The author even acknowledges that life in the future amounts to survival of the fittest: "having the skills to do the jobs of the future is essential to staying out of poverty". Gee, what about social welfare; there's always the dole, isn't there? So you don't recommend an arts degree, then?
Great thinking within that paradigm, duh, but what if the world changes? And what about those who want to do what they love, regardless of how ell it pays?
Posted by Squeers, Saturday, 2 October 2010 6:43:54 PM
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