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Australians aren\u2019t moving between jobs as often as they used to and research suggests the drop-off is hurting productivity and making the entire country worse off.<\/p>\n
The non-partisan think tank e61, in a paper to be published on Monday, found that impediments to job switching such as non-compete clauses and interstate differences between occupational licences were making it harder for businesses to become more efficient and productive.<\/p>\n
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Workers aged 25 to 34 are more likely to move and be more productive than older workers.<\/span>Credit: <\/span>Alamy<\/cite><\/p>\n The federal government has launched a two-year competition review, headed by public infrastructure and finance expert Kerry Schott, to examine possible impediments to competition across the economy.<\/p>\n There are growing concerns globally that the domination of certain sectors, from technology to supermarkets, by a handful of businesses is reducing competition, which in turn is curbing productivity improvements.<\/p>\n e61 analyst Jack Buckley said there was traditionally a large productivity gap between the company a worker left and the one they joined. On average, the new firm was 13.1 per cent more productive than the old one.<\/p>\n Workers aged 25 to 34 were more likely to move and be more productive than older workers.<\/p>\n But Buckley said there had been a slowdown in the movement of people to different jobs, which was contributing to Australia\u2019s drop in productivity.<\/p>\n The productivity gap between firms people left and then joined has halved since the mid-2000s in a sign that the gains from workers moving between businesses were being lost.<\/p>\n \u201cDeclining labour mobility could have contributed to Australia\u2019s aggregate productivity slowdown. Our work shows that workers tend to move to firms that are [on average] more productive. But this tendency appears to have weakened,\u201d he said.<\/p>\n \u201cMaking it easier for workers to switch jobs could help boost productivity. Australian workers currently face a number of barriers when looking to move to a more productive firm.\u201d<\/p>\n Last week, the International Monetary Fund used its review of the Australian economy to urge governments to develop new structural policies to boost productivity.<\/p>\n It said the competition policy review, the review of skilled migration settings and the development of a migration strategy would all help to boost dynamism across the economy.<\/p>\n \u201cEfforts to jump-start productivity growth should be a priority. Like in many advanced economies, Australia has experienced a sustained decline in productivity growth in recent decades,\u201d it said.<\/p>\n \u201cThis has contributed to higher unit labour costs, reducing Australia\u2019s competitiveness.\u201d<\/p>\n Treasury secretary Steven Kennedy recently revealed to a Senate committee that a lack of competition in some parts of the economy and the use of non-compete clauses might be contributing to the slowdown in productivity growth.<\/p>\n Treasury secretary Steven Kennedy says a lack of competition in parts of the economy may be holding back productivity growth.<\/span>Credit: <\/span>Alex Ellinghausen<\/cite><\/p>\n \u201cWe do take seriously what appears to be declining dynamism over time in the Australian economy. There\u2019s some evidence of concentration in markets,\u201d he said.<\/p>\n Buckley said the growth of non-compete clauses, which prohibit a person from moving from one company to another in the same field, had accelerated over the past 15 years and were now a default option in many employment contracts.<\/p>\n He said such clauses hindered employees moving to firms that might be better managed or use capital more efficiently.<\/p>\n \u201cRemoving or limiting the use of non-compete clauses would help remove one source of friction behind the decline in job mobility,\u201d he said.<\/p>\n Buckley said other impediments to job movement included different job licences between states as well as property stamp duties.<\/p>\n Cut through the noise of federal politics with news, views and expert analysis. <\/b>Subscribers can sign up to our weekly Inside Politics newsletter.<\/b><\/p>\n<\/p>\n
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