Australia’s workers reaping greater share of national income than before pandemic
Workers are now receiving more of the “economic pie” than before the pandemic, with the increase in labour’s share of national income delivering an extra $28bn into the pockets of Australians over the past year alone.Pat Bustamante, a senior economist at Westpac, said his analysis suggested that the tighter post-Covid labour market was behind the greater share going to workers, from an average of 53.8% through the 2010s, to more than 55% now.While the movement in the division of national income appears small, even fractional changes translate to tens of billions of dollars in an economy of about $2.8tn.
The ABS splits total national income between labour and capital,The labour (or wage) share is the portion of total domestic income paid to workers in wages, salaries and other benefits,The capital share is the portion going to the owners of capital and land, including company profits,Unions decried a surge in the profit share of national income in 2022, before Labor’s jobs and skills summit in September of that year, which the government used as a platform to push through reforms to workplace laws,As surging inflation undermined workers’ real wages and mining companies’ revenues surged amid a spike in commodity prices into 2023, there were also accusations of companies’ profiteering from the cost of living crisis.
Bustamente said companies were now finding it harder to pass on higher wage costs to their customers, which was leaving more in the pockets of workers and also easing pressures on inflation,Meaningful increases to the minimum wage over recent years had also played a role,After a decade of stagnant wages through the 2010s, Bustamante said there was evidence in the national accounts figures released last week that a high labour share could prove to be a new “equilibrium”, mimicking earlier periods of low unemployment,It was also a positive starting point as workplaces prepare for the potentially disruptive impact of artificial intelligence,“If AI generates productivity improvements – which the IMF has estimated at an extra 1.
5 percentage points of productivity a year – then if you can keep the labour market tight, there’s no reason the wages share needs to go down,” Bustamante said,Sign up: AU Breaking News emailGianni La Cava, research director at e61 Institute, said the profits versus labour share was often used as a proxy for whether “the capitalists are winners or the workers are winners”,While these arguments were “mostly politics”, La Cava said, movements in the wages share of national income was still a “pretty good indicator of worker bargaining power”,“If it is a sustained increase since Covid, say over a few years, that would be a meaningful thing and it would suggest sustained cost pressures for firms,”La Cava agreed that “the post-Covid strength in the labour share is related to the hot and inclusive labour market”.
“But I think the slightly longer-run trend is probably linked to the slowdown in productivity growth in the market sector.”When real wages are growing faster than productivity growth, then employers are internalising the extra cost and so take a smaller share of the total income.Saul Eslake, an independent economist, said “the distribution of national income is a political, social and economic issue”.“The wages share of national income has been declining for quite some time,” Eslake said.“One of the points the ACTU made at the [economic reform] roundtable is that in order to get agreement on what needed to be done to reverse the slide in productivity growth, it’s reasonable to do that on the basis that the fruits of any improvement would be fairly shared.
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AI content needs to be labelled to protect us | Letters
Marcus Beard’s article on artificial intelligence slopaganda (No, that wasn’t Angela Rayner dancing and rapping: you’ll need to understand AI slopaganda, 9 September) highlights a growing problem – what happens when we no longer know what is true? What will the erosion of trust do to our society?The rise of deepfakes is increasing at an ever faster rate due to the ease at which anyone can create realistic images, audio and even video. Generative AI models have now become so sophisticated that a recent survey showed that less than 1% of respondents could correctly identify the best deepfake images and videos.This content is being used to manipulate, defraud, abuse and mislead people. Fraud using AI cost the US $12.3bn in 2023 and Deloitte predicts that could reach $40bn by 2027
ChatGPT may start alerting authorities about youngsters considering suicide, says CEO
The company behind ChatGPT could start calling the authorities when young users talk seriously about suicide, its co-founder has said.Sam Altman raised fears that as many as 1,500 people a week could be discussing taking their own lives with the chatbot before doing so.The chief executive of San Francisco-based OpenAI, which operates the chatbot with an estimated 700 million global users, said the decision to train the system so the authorities were alerted in such emergencies was not yet final. But he said it was “very reasonable for us to say in cases of, young people talking about suicide, seriously, where we cannot get in touch with the parents, we do call authorities”.Altman highlighted the possible change in an interview with the podcaster Tucker Carlson on Wednesday, which came after OpenAI and Altman were sued by the family of Adam Raine, a 16-year-old from California who killed himself after what his family’s lawyer called “months of encouragement from ChatGPT”
Larry Ellison briefly overtakes Elon Musk as world’s richest person
US tech billionaire Larry Ellison is neck-and-neck with Elon Musk in the contest to be the world’s richest person after briefly overtaking the Tesla chief executive on WednesdayEllison’s wealth surged after Oracle, the business software company in which he owns a stake of 41%, reported better than expected financial results.Oracle shares rose by more than 40% in early trading, at one point valuing the business software company at approximately $960bn (£707bn) and Ellison’s stake at $393bn, just ahead of Musk’s fortune of $384bn, according to Bloomberg’s billionaires index. However, Ellison’s lead was short-lived as the stock closed at $328, a rise of 36% valuing Ellison’s shareholding at $378bn and putting Musk back ahead.The pair sit comfortably ahead of Facebook founder Mark Zuckerberg and Amazon’s Jeff Bezos.Ellison, 81, also has other sources of wealth, including a stake in electric carmaker Tesla, where Musk is chief executive, a sailing team, the Indian Wells Open tennis tournament, and an island in Hawaii, according to Bloomberg
Snapchat allows drug dealers to operate openly on platform, finds Danish study
Snapchat has been accused by a Danish research organisation of leaving an “overwhelming number” of drug dealers to openly operate on Snapchat, making it easy for children to buy substances including cocaine, opioids and MDMA.The social media platform has said it proactively uses technology to filter out profiles selling drugs. However, research by Digitalt Ansvar (Digital Accountability), a Danish research organisation that promotes responsible digital development, has found evidence of a failure to moderate drug-related language in usernames. It also accused Snapchat of failing to respond adequately to reports of profiles openly selling drugs.Researchers used profiles of 13-year-olds and found a multitude of people selling drugs on Snapchat under usernames featuring keywords such as “coke”, “weed” and “molly”
Skip Apple’s new iPhone – five tips to make your old phone feel new again
On Tuesday, Apple announced the iPhone 17 series with the usual spate of new features, including a thinner design, improved displays and a camera with 4x optical zoom. If you’ve been getting frustrated with your old phone, or just tired of it, the lithe new model may look exactly like the device you need to launch your budding photographic career, reconnect with long-lost friends and maybe even save your life in an emergency.The Guardian’s journalism is independent. We will earn a commission if you buy something through an affiliate link. Learn more
How to Save the Internet by Nick Clegg review – spinning Silicon Valley
Nick Clegg chooses difficult jobs. He was the UK’s deputy prime minister from 2010 to 2015, a position from which he was surely pulled in multiple directions as he attempted to bridge the divide between David Cameron’s Conservatives and his own Liberal Democrats. A few years later he chose another challenging role, serving as Meta’s vice-president and then president of global affairs from 2018 until January 2025, where he was responsible for bridging the very different worlds of Silicon Valley and Washington DC (as well as other governments). How to Save the Internet is Clegg’s report on how he handled that Herculean task, along with his ideas for how to make the relationships between tech companies and regulators more cooperative and effective in the future.The main threat that Clegg addresses in the book is not one caused by the internet; it is the threat to the internet from those who would regulate it
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