Talk about ingratitude. It’s enough to make a grown economist cry. The nation’s dismal scientists labour mightily to produce almost three decades of continuous economic growth, and few people care.
In April this year a venerable crowd called CEDA – the Committee for Economic Development of Australia, the gentlepersonly end of big business – conducted an online survey of almost 3000 people from all states, asking for their thoughts on the economy.
Asked whether they’d gained from 26 years of uninterrupted economic growth – actually, it’s now ticked up to 27 years – only 5 per cent said they’d gained a lot, with 40 per cent admitting they’d gained “a little”.
That left 40 per cent saying they’d gained nothing and 11 per cent who didn’t know. This is deeply shocking for most economists, who hold as their highest article of faith the belief that the public is crying out for unceasing and rapid growth in the size of the economy – by which they mean an ever-rising material living standard.
But if you and I gained little from all the economic growth, who do we think gained a lot? Well, 74 per cent thought large corporations had, but only 8 per cent thought small and medium-sized businesses had.
Just over half of us thought foreign shareholders gained a lot, whereas only 31 per cent thought Australian shareholders did.
Almost three-quarters of us thought senior executives had gained a lot, a third thought white-collar workers did well, and only 12 per cent thought blue-collar workers did.
These answers don’t add up. They reveal that the public’s understanding of how the economy fits together is confused.
While it’s probably true that big businesses are, on average, more profitable than smaller businesses, it’s a mistake to think big business has been coining it over the past three decades, with most of small business struggling. Were that true we’d have heard a lot more howls of complaint.
It’s true that our mining companies did exceptionally well from the resources boom, and that those companies are about 80 per cent foreign owned, but mining accounts for only 6 per cent of the economy. Looking overall, foreign owners would account for more like a third of businesses. And it’s wrong to think foreign shareholders get a better deal than local shareholders.
People often forget that, when you trace it through, the shares in Australia’s big listed companies are owned mainly by Australians with superannuation and other savings for retirement. So, if big companies have done well over recent decades, that means yours and my super balances are a lot higher than they were. This not a gain?
It’s true that the incomes of senior executives have grown a lot faster than the rest of us over recent decades. But with a workforce of 12.6 million, that’s just a relative handful. Say there are 400 big companies. If each of those has 10 people on million-plus salaries, that’s just 4000 of them.
Make it 40,000 and you’re still not talking about many people. Enough to be envious of but, arithmetically, not enough to make a big difference. Were we to take their millions off them, there wouldn’t be enough to give the remaining 12.6 million of us much more than a small pay rise.
In other polling, many people – even many West Australians – say they have nothing to show for the much-trumpeted resources boom. Do you remember the four or five years before 2015 when the dollar was worth a bit less or a bit more than $US1? It was up there because of the resources boom. And, whether or not they realise it or remember it, the many people who took the opportunity to go on an overseas holiday or three were getting their cut from the boom.
What’s the bet all those people with seniors cards, paying only nominal amounts to use public transport, think they’ve gained little over the decades? The aged have done a lot better, mainly because of changes made by the Howard government. And that’s before you count the rising value of their homes and investment properties.
It’s the young who are much more justified in lacking gratitude.
Speaking of which, most people don’t get the point when reminded of our 27 years of uninterrupted economic growth. It doesn’t mean we’ve had twice the growth other countries have had, and so should all be rolling in it. We’ve had more, but not a huge amount more.
No, what it really means is that the others have had three or so severe recessions in that time – including the Great Recession – and we haven’t.
The one great drawback of going for so long without a recession is that so many people have no experience of how much harm and hurt they cause – how depressing they are – while others have forgotten it.
Still, voters have precious little gratitude to give politicians and bureaucrats, and absolutely none for what amounts to the absence of something that would have been terrible. And anything good that happens to us, we soon take for granted.