A growing number of Chinese firms motivate their employees through employee stock ownership plans (ESOPs). Using a sample of listed firms in China, this paper examines the impact of ESOPs on firms’ total factor productivity (TFP), as well as the mechanisms of ESOPs. The empirical results show that ESOPs have a positive impact on firm TFP. The mechanism tests convey that ESOPs increase firm TFP by promoting research and development (R&D) investment and mitigating agency costs. These results are robust after accounting for endogeneity and using alternative metrics of TFP. In addition, we find that the positive effect of ESOPs on firm TFP is more pronounced in non-state-owned firms and firms with a less severe free-riding problem. Furthermore, the effect on firm TFP is positively associated with the subscription proportion of non-executive employees in ESOPs. Overall, the results of this study underscore the important role of employee ownership in firms’ productivity improvement.

The Australian Industrial Relations Commission (AIRC) brought down the first stage of the ‘Living Wage’ Case decisions on 22 April 1997. For the first time in nearly 30 years the decision was split. This article analyses the economic rationale for both majority and minority decisions and argues that the majority decision was overly cautious and conservative in its assessment of the economic constraints on the Commission’s capacity to award a pay increase to low paid workers.

‘Breaching’, or the imposition of financial penalties for infringing income support rules and obligations, has been highly controversial in recent years. This is mainly because of a large increase in the number of breaches imposed between 1999 and 2002 in the context of an intensified ‘mutual obligation’ regime. Welfare advocacy groups have argued that these penalties are unnecessarily harsh and tend to fall most heavily on the more vulnerable income support recipients. However, there has been little systematic examination of the impact of breaching, either in terms of hardship or in terms of its effect on future compliance with obligations. This article discusses the results of the first large-scale study of these impacts, commissioned by the Department of Family and Community Services and carried out by the Social Policy Research Centre in 2002/03. The research involved a review of existing literature, a national telephone survey of breached income support recipients, together with in-depth interviews with a small number of survey respondents, and a national postal survey of welfare agencies.

This historical case study demonstrates the importance of education to the diffusion of management ideas and strategies. The article explains how management and education came to be united in the pursuit of efficiency and how they came to use similar assessment techniques to ensure the achievement of this goal. Documenting F.W. Taylor’s interest in education, it reveals how scientific management, as promoted by management ‘gurus’, consultants, managers, educational administrators and related professionals, came to influence the early twentieth century reform of education and training in both the USA and Australia. It shows how Taylor’s methods, principles and philosophy were transformed into a scholastic program, and how this program was infused into the administration and content of teaching and learning offered in NSW schools, technical colleges, universities and adult education, with long-term implications for the training of managers, students and workers.

The argument that there exist a causal link between national savings and current account deficits is often simplistically formulated in terms of national income accounting identities. However the validity of formulating national saving-argmenting policies to target current account deficits is open to much debate when the possible theoretical linkages between these aggregates are investigated more closely. In particular; if the adjustment mechanism to external balance is expenditure driven rather than relying on exchange rate induced relative price changes, the alternative case of interventionist policy to promote net exports is strengthened. Theoretical arguments opposing the use of interventionist trade policies are often derived form inappropriately constructed, or simplistically interpreted, economic models.

Since 1993 and the removal of the separate award system for the Australian State of Victoria, many Victorian workers have been on five minimum conditions and on pay levels well below that of employees in other States. Despite attempts to rectify the situation (with Victorian common rule awards), issues of coverage and employer compliance remained. The implementation of WorkChoices legislation in 2006 posed a further challenge to Victorian low-paid workers. Our research found that the impact of WorkChoices on the Victorian low-paid has been largely insidious, surfacing primarily as an increased wage-effort ratio, with people working more unpaid hours and at an increased pace. The implications of this are that these hidden effects are more likely to linger, even with the replacement of WorkChoices with the Fair Work Act, 2009. Furthermore, it appears that employer compliance with minimum conditions requires more adequate enforcement by the Federal Government.

We introduce a themed collection of articles on approaches to configuring a Green New Deal as a response to the current capitalist crisis marked by ecological breakdown, economic stagnation and growing inequality. The Green New Deal is a contested political project, with pro-market, right-wing nationalist, Keynesian, democratic socialist and ecosocialist variants. Critiques of the Green New Deal include pragmatic queries as the feasibility of implementation, and theoretical challenges from the right regarding reliance on state forms and from the left regarding efforts to ameliorate capitalism. They also include concerns about technocratic bias and complaints about lack of meaningful consultation with Indigenous peoples on proposals for large-scale shifts in land use. Debates over the ideological orientation, political strategy and implementation of the Green New Deal must now account for the economic and employment impacts of COVID.

The purpose of this paper is to suggest ways in which core labour standards can be incorporated into the WTO. Though regarded by some as simply a vehicle for protectionism, the campaign for core labour standards is based on sound economics that extends the logic of trade regulation to the international dimension of labour. Getting agreement on core labour standards and enforcing them will be a difficult task, but one best conducted through the WTO using a joint ILO/WTO enforcement mechanism. It is argued that such a task will bring much-needed legitimacy to the WTO, and increase the chances that it can deliver a world of prosperous, open and fair trade.

The driver of the current crisis is the collapse in domestic aggregate demand, originating from international factors. It is important, therefore, to consider potential areas where aggregate demand can be expected to increase in order to understand the possibility of recovery. The current crisis was preceded by an unprecedented increase in the level of household debt, which will hinder the recovery of consumer expenditure. Consumption is also being affected by uncertainty with respect to both income and employment. Similarly, the outlooks for investment and net exports suggest that they are unlikely to contribute to the initial phase of recovery. This leaves the important area of government expenditure. It is argued that government expenditure, particularly in infrastructure and capital, is particularly important as in the short run it contributes directly to demand, while, in the longer run it boosts growth and productivity. Finally, approaches to financing the implications of increased government expenditure are examined.

This article examines the productivity performance of the Australian construction industry and identifies some of the key factors affecting productivity growth. It also critically assesses the recent Productivity Commission (1999) report on the construction industry. In particular, the article challenges the argument of the Productivity Commission that a high level of unionisation within the industry is adverse for productivity growth. Moreover, the recommendations of the Commission directed at increasing productivity within the industry are argued to exacerbate those structural features of the construction industry which impose a constraint on productivity growth. The primary data sources are national and international official economic data on the industry and a number of case studies of major city building projects undertaken by the authors. The study finds that the Australian construction industry is within the top three OECD countries in terms of construction output per person employed.

The emergence of an understanding of labour as the basis of value is traced from ancient Greek authors to classical political economy and Karl Marx, and the subsequent eclipse of the theory in neoclassical economics is then charted. While the ancient Greeks did not have a concept of labour as a measure of value, in Scholastic authors the notion was fixed that labour and cost of production determine value. Labour assumed a central role in Adam Smith, but it was with David Ricardo that a fully blown labour theory of value was achieved. Marx gave the concept its philosophical dimension, tying it to a critique of classical political economy. The labour theory of value came under attack in neoclassical formulations which in the end effected the analytical disappearance of labour in several ways. Labour became just another factor of production, with marginal productivity regulating its price. Then factors of production and final goods became analytically equivalent as sources of subjective utility, especially in the context of general equilibrium theory. In disutility models of labour supply, labour was substituted by its absence, ‘leisure’. Finally, attempts were made to explain the employment relationship as an application of agency theory, moving away from the pure commodity model of labour. Nevertheless, all these theories failed to account for what became the Achilles' heel of neoclassicism — namely the indeterminacy of the labour contract.

The plenary papers provide rich reflections on Australian industrial relations. Drawing on a wealth of experience, Gardner, Hancock, McCallum and Niland comprehensively cover the field of traditional industrial relations by examining those aspects that have engaged considerable scholarly attention since the 1950s: labour law; Commonwealth-State jurisdictions; wage policy; the role of tribunals; unions and industrial action. In so doing, the plenary authors recognise that industrial relations regimes generally aim to balance employeremployee power, provide conditions that enable workers to support themselves and their families, and set a reasonable safety net to protect the weakest.

The 1989 Green Paper Transforming Industrial Relations in New South Wales, advanced 99 recommendations across a range of concerns. Some were quite prosaic, such as the scope for legal representation in tribunal proceedings and redrafting the regulations to the enabling legislation. Other measures, such as those to do with union amalgamations, OH&S in small business, and pay equity addressed problems specific to a system that was, at that time, the least reviewed in Australia. A third group of recommendations, which are more interesting in the current Australian policy climate, addressed the key design features of how an industrial relations system could be best made fit for purpose in a competitive world.

Most of the proposed changes were implemented, either through ministerial actions or through two pieces of legislation: the Industrial Arbitration (Enterprise Agreements) Act 1990 and the Industrial Relations Act 1991. By applying a green paper process, these changes followed periods of submission taking and considerable consultation, with extensive debate.

The privatisation of economic infrastructure in Australia that began in the 1980s has continued to be actively pursued by state and federal governments. Evaluations of the effects of the change of policy, ownership, control and regulatory arrangements that have accompanied privatisation and their impact on the longer-term stock of infrastructure and the growth of the economy have received less attention than the immediate privatisation decisions. This article reviews some of the studies that have been carried out to evaluate the impact of privatisation, focusing on long-term impacts on infrastructure provision. In particular, it discusses the myopia created by the emphasis on commercial transactions and managing markets that continues to shape the debate about the provision of infrastructure to meet Australia's economic, environmental and other objectives. Objectives have become even more difficult to achieve as an increasingly extensive and complex regulatory framework is required to manage privatised activities. This adds to costs and limits the potential for the introduction of new initiatives to address pressing problems. The issue is increasingly relevant, given the current perceived shortage of infrastructure and the flow-on effects of the current international financial crisis on Australia. The slow-down in economic growth accompanying the financial crisis is putting pressure on government budgets and threatening to perpetuate the existing policy bias towards short-term solutions, exacerbating the longer run problem of ensuring an adequate supply of public economic infrastructure.

Chinese employers practise extensive personal screening of applicants during the recruitment process. This study identifies four motives for these practices – statistical, customer taste, employer taste and regulatory. It discusses their distinctive roles in the Chinese labour market and in regard to labour-market regulations. Using a convenience sample of large Chinese employers, the study evaluates the economic and institutional determinants of screening approaches and implications for firms’ performance. Statistical screening, based on the assumption that social group membership is an indicator of productivity or loyalty, is found to be related positively to employers’ capitalisation, labour-market power and private ownership, and negatively to skill supply in provincial markets. Customer-taste screening is prevalent in the services and sales sectors, and interestingly in wealthy first-tier cities. Employer-taste screening endures in privately owned firms, and in skill-intensive industries and first-tier cities, and appears linked to customer-taste screening. Some forms of screening breach anti-discrimination laws and persist because of lax enforcement of such laws, but requests for personal data on job applications forms may also reflect compliance with equity indicators. Regulatory compliance-based screening is related positively to firms’ market power, capitalisation and state ownership. The implications of the different screening practices for public policy and corporate strategy are examined.

The recent National Wage Decision has the capacity to continue the structural efficiency thrust of recent National Wage Cases. It also has the potential to mark a major discontinuity in wage determination. The paper examines the major post-war discontinuities, the substance of the Accord Mark VI, the National Wage submissions, and the Commission’s attempts to harmonise macro-economic outcomes with enterprise bargaining.

One of the characteristics of the WorkChoices legislation introduced by the Howard government was the anti-union bias that permeated it. Some argue that this is appropriate because unions increase minimum wages, and economic theory shows that this will decrease employment and hence output. The Rudd government has signalled that it intends changing this anti-union bias, while at the same time restoring the role and coverage of minimum wages. This paper examines the arguments around these issues and concludes that neither side of the economic theory debate has delivered a knockout blow. The theoretical analysis is followed by a section looking at empirical evidence on the effects of deregulating labour markets. Again there is not complete consensus among the economics profession. However, both sides of the debate on the effects of labour market deregulation agree that strong minimum wage legislation does significantly reduce earnings inequality by increasing earnings at the bottom end of the distribution. The paper concludes that the increase in inequality consequent on labour market deregulation has adverse effects on the economy in the short run and disturbing longer run effects on society.

Rewards for Australian executives continue to stir debate. A recent Australian government response to pay concerns was to call on the Productivity Commission (PC) to investigate the oversight, accountability and transparency of remuneration practices. At least two PC-related outcomes were controversial: the ‘two strikes’ and ‘clawback’ proposals. This article considers the reactions of two key stakeholders, namely the Australian Institute of Company Directors and the Business Council of Australia. The views of these two organisations reflect an ongoing evaluation of rules- and principles-based governance structures. Asserting the need to consider alternate analytical models when studying executive pay, the present article concludes with several questions about the intent(s) driving remuneration reforms and their possible consequences.