Productivity and the need for political actionSunday, May 06, 2018
As we gear up for yet another observance of Labour Day and the celebration of National Workers Week, it is expected that the spotlight will once again turn on the issue of the virtues of productivity improvement in the country; in particular, the need for improvement in the productivity of the Jamaican labouring class of working poor struggling daily to make ends meet in a country with the second-highest level of income inequality this side of the Western Hemisphere.
For half a century, if not more, we have not, as a society, been successful in shifting the productivity needle in a positive direction. So, year after year, throughout this period, we witness various 'productivity experts', government officials, and public commentators using the print and electronic media to extol the need for the working age population to work harder, if not smarter, to guarantee a better quality of life. But the message keeps falling on deaf ears.
The problem we keep facing over many decades is the stubborn unresponsiveness of management (private sector operatives), labour (including the trade unions), and Government (encompassing our policy determiners and governors) to the exhortation for productivity improvement.
One former minister of labour even attempted to launch a national 'Productivity Revolution' in the country under the auspices of the Jamaica Productivity Centre (JPC) only to fail in their gallant effort to garner the necessary political support — much less the 'revolutionary productivity forces' — to guarantee a successful strike at the problem.
Over time, we have come to view the persistent failure to move the productivity needle in a positive direction, on the basis of the prevailing productivity discourse, as a flaccid intellectual exercise devoid of any serious 'grounding' with private or public sector entities, even though the prospect in Jamaica for human material development (growth, prosperity and equity) is doomed without a radical improvement in our productivity levels.
This conundrum is quite perplexing to me. For the hard, cold fact is that in our small, fragile, open, and developing economy, our competitive advantage vis-à-vis our Caricom neighbours, and larger global community of nations, is intricately connected to our ability to improve overall productivity involving labour, technology, energy, and raw material.
Higher levels of productivity are attainable only when a higher level of output is produced with the same or fewer resources, thus determining the calibre of our standard of living. The late journalist, talk-show host and public intellectual, Wilmot “Motty” Perkins expressed the challenge succinctly in 1990 thus: “There is no way out of debt, no way to prosperity, except sustained, hard, intelligent, productive work. All else is illusion — and damned dangerous illusion at that.”
The sentiment conveyed by Motty's argument — which I totally endorse — was that the need for increasing productivity is greater now than ever before, since our rate of growth as an economy have been in free fall for more than half a century.
As the table demonstrates, our highest period of growth was in the decade of the 1950s to be proceeded by the lowest periods in the decades of the 1970s, 1980s, through to 2000s. Why, then, have we failed to improve productivity in Jamaica decade after decade since the 1950s?
Note that in the decade of the 1950s, average labour productivity growth in Jamaica was some 8.4 per cent when compared to the United States of America (2.0 per cent), Canada (2.3 per cent), Trinidad and Tobago (7.0 per cent), and the Dominican Republic (3.8 per cent). But, come the 1960s, our average annual labour productivity slipped dramatically to 4.0 per cent, only to be followed in the decade of the 1970s by a further and dramatic decline of 0.4 per cent. And, by the time the decades of the 1980s and 1990s came around, the numbers shifted to 0.7 per cent respectively — with countries we once outperformed, like Singapore, Trinidad and Tobago, Barbados, Canada, the Dominican Republic, and the United States of America all recording positive increases over the same period.
To be sure, there is nothing fatal when a country experiences a lack of productivity growth in the short term. But now that Jamaica is gripped with a long-term productivity stagnation crisis amidst the Administration's “5-in-4” growth path and 'economic independence' aspiration, we should all be worried because we are treading on very dangerous grounds.
The problem of productivity will be with us for the foreseeable future. As Claude Clarke, the former People's National Party Member of Parliament and minister of government observed in the media on February 22, 2015: “Lifting worker productivity to internationally competitive levels is central to the economy's ability to grow…and the task of reversing the (negative downward productivity) trend is now not only urgent, but colossal.”
For his part, the CEO of the JPC, Charles Douglas, has identified among the factors influencing productivity in Jamaica the “lack of trust and the existence of adversarial industrial relations, which are somewhat related to the social class divide in Jamaica, and inadequate incentives for workers and poor work habits and lack of motivation”.
But, despite the pressures of having a marginally growing economy against the backdrop of sluggish growth in productivity, all is not lost. The strategies, actions and initiatives employed in the past to boost productivity — professional workshops, seminars, and round-table discussions — will not work today. New strategies and stratagems will have to be employed to break the back of our productivity crisis and forge greater levels of competitiveness in the economy.
Regrettably, successive government response to the crisis has largely been insufficient and tantamount to ignoring the issue. Yet, ironically, it is at the political level that real redemption of the productivity crisis in Jamaica resides. In retrospect, productivity has never been treated as a big political issue as unemployment, minimum wage, crime and violence, corruption, housing, squatting, electoral malpractice, health, homosexuality, states of emergencies, etc. This puzzles me, since none of these issues, by themselves, can guarantee greater levels of efficiency, higher output, and a more rapid rate of innovation — all of which can amount to greater freedom for a greater number of citizens to make small-scale decisions, thus facilitating a greater degree of patriotism and support for the ideals of capitalism.
The sooner we learn that productivity decline is a very significant economic and political factor chipping away at growth and which could well boil over and cause serious damage, the better off we will be. Part of the problem, perhaps, is that there is no sure way to fix our sluggish productivity, hence it is not given the mega political and media attention it needs. That being said, however, I propose that it is high time that the political focus on this issue be much higher than it is, particularly in the case of the Opposition, whether People's National Party or Jamaica Labour Party; not only because it links to some key election issues, but also because, in our two-party parliamentary Westminster democratic system, Opposition parties have a duty to challenge the ruling Government's own assertions about the economy.
Out of this ferment can come improved productivity; a state which is unlikely to occur entirely of its own volition. In any event, bipartisan political action in the service of fixing our productivity crisis cannot only raise the political profile of productivity in Jamaica, but more importantly, would provide the opportunity for our legislators to talk long-term in economic terms about the jump-start in an upward direction which our productivity crisis proves we desperately need.
I hear the voice of columnist Martin Henry ringing in my ears. He said this in November 2015: “It is going to take a lot to 'save' Jamaica, part of which has to be cross-party collaboration on the big salvation issues.” Ditto!