It’s time to stop talking about productivity

Interesting suggestion on how to reframe the productivity discussions and debates. But the government focus on immigration as a major driver of economic growth (total not per capita GDP) highlights the lack of focus on productivity and increased incomes:

Should Canada take steps to boost its long-term productivity growth, including measures to accelerate the substitution of capital for labour and to increase the pace of upskilling?

Translated from policy-ese: would you like a $13,500 raise?

A lot of the debate over increasing productivity and competitiveness resembles that first sentence, and sounds like a note from the boss telling you to stop lollygagging. Canadians could be forgiven for tuning out of a debate that seems to centre on why they should work harder to plump up corporate profits.

But what if the productivity debate were framed around individual prosperity — the question being whether you want a low-wage or a high-wage economy?

A speech by former federal finance minister Bill Morneau last week hinted at that approach. After some familiar bemoaning of the lack of urgency about fixing our lack of competitiveness, Mr. Morneau pivoted to a frame of individual prosperity. “Let me put it another way,” he said in a speech Wednesday evening to the C.D. Howe Institute. “If we had maintained our rate of productivity growth from 2000 on, the average annual income for a Canadian worker would have been about $13,500 higher in 2019.”

To be sure, there’s nothing to guarantee that the benefits of higher productivity flow to workers. Some of that extra income will take the form of higher profits — and rightly so, if businesses are to expected to invest heavily in robots and other forms of automation.

But Mr. Morneau’s words brought to mind a recent tour I had of a printing plant in southern Manitoba owned by Friesens Corp. Like many companies in Manitoba and elsewhere in Canada, Friesens has had to contend with an ongoing labour shortage. Unlike many, the company is automating parts of its production lines. One result: the back-breaking job of lifting and stacking is now performed by robots, not humans. It’s safer, cheaper — and has freed up those humans for more technically demanding work. And their wages are higher, too.

So, a suggestion for Mr. Morneau, or anyone else looking to pontificate on the need for a focus on higher productivity: Don’t. Instead, talk about the choice between low-paid grunt work, and better paid, more interesting jobs.

Source: It’s time to stop talking about productivity

About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

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