If the economy is ‘booming’ why are We all becoming poorer?

If Tasmania is meant to be doing so well economically, why are the actual people who live here seeing their real wages decline year on year? Asks

THE legendary economist John Maynard Keynes once predicted that by the year 2030, most of us would be working cushy 15-hour weeks.

His reasoning was simple: as technology advances, it takes less time to produce the same amount of goods and services, freeing humanity to spend time on the things that truly matter.

Since he made that bold declaration in 1930, technology has indeed advanced beyond his wildest imaginations, and yet most of us are working longer hours than ever.

Three Tasmanian Liberal MPs have tapped out this year, claiming to have been burnt out from the demands of the job.

On Wednesday, Hobart nurses went on strike, fed up with the constant demands to do more and more with less and less.

Robbie Moore from the Health and Community Services Union told me that many aged-care workers were now in the habit of turning up to work an hour early, such is the enormity of their workload.

These aged-care workers are wiping bums and mopping floors for free, otherwise many of these tasks would be left undone and the elderly people in their care would suffer.

How did it come to this? If we’re working harder, longer, and more efficiently than ever before, what’s happening to the fruits of our labour?

We might see some clues in the CommSec State of the State report, which was released earlier this week.

It’s a document that’s triumphantly bandied about by the Tasmanian government to prove just how wealthy and prosperous the state of Tasmania is.

But if we look at the metrics by which the State of the State report judges prosperity, it raises a few eyebrows.

For starters, their main metric is Gross State Product: the amount of money spent in a year, seasonally adjusted to their quarterly reporting period.

If we look at GSP we see only good news: a number that only ever seems to go up and up and up as the dollars go hurtling around the state at an ever increasing pace.

We’re revving our engines harder, our wheels are turning

Kenji Sato

faster, and yet Tasmania continues to fall ever behind in terms of real wages which, surely, is the point of all of this.

What is the point of jobs, growth, and an economy, if not to make the people who live in it better off?

What does it mean for an economy to be “booming” if the actual people who live in it are seeing their real wages decline year on year?

The economy, we must remember, is something we made up. It exists in our heads, much as the value of dollars and cents only exists in our collective noggins.

At some point we forgot that, and instead of the economy serving us we started serving the economy.

In economics they call this “medium maximisation”: when people invent a metric in order to measure some variable, and then obsess over the metric instead of the variable they were meant to be keeping tabs on in the first place.

We see this a lot in life: students obsess over TEC and ATAR results instead of real education, social media users focus on likes and followers over real friendship, and governments obsess over GSP instead of real wellbeing.

In our nerdy pursuit of making numbers go up, we lose sight of what makes life meaningful.

What’s the point of being rich if we’re overworked, miserable, and too busy to spend time with the ones we love?

The word “economics” in its original Greek meant “management of the home” caring and providing for one’s family and loved ones.

Our striving and our ambition are what make us great, but perhaps we should all take some time to rest and reflect on what matters most to us.