Tue | Jun 6, 2023

We must raise the level of productivity

Published:Wednesday | March 22, 2023 | 5:45 AM


The economy has to be more productive, the experts like Dennis Chung are saying. Otherwise, the so welcomed wage increases, especially the minimum ones, will prove hollow in just a few months.

Inflation will nyam them out.

The just over one per cent annual growth in GDP forecast by Finance Minister Dr Nigel Clarke for the next four years will not keep the wage increases meaningful. We must raise the level of productivity.

You might think to increase productivity by getting to work on time, taking the breaks that keep your mind fresh, ensuring efficiency and better cooperation and so on. And that’s true enough. But more critical and basic than those operational steps are the improved inputs in capital, both human and physical.

Improved physical capital derives from more and better technology. The need for this in Jamaica is enormous, as Professor Don Robotham’s article earlier this week ( Gleaner 19/03/2023) pointed out. Only to add that small business is especially suffering in this regard and deserves specific State attention.

Improvement in human capital means more and better education and training. In fact, however, at the formal level, the real amount (=nominal minus inflation) provided in the Budget this year is less than it was four years ago.

On-the-job training, carried out in every business, is also crucial. It is the responsibility of business sector associations, whether in manufacture, agriculture or agro-industry, to see to it that this goes forward systematically.

Regrettably, neither the minister of finance nor the prime minister tackled the productivity issue. Yet it is so fundamental. By now we do not expect it from Nigel Clarke. His perspective is that of an accountant. He juggles and arranges the numbers to meet the demands coming at him from the ministries and other agencies. Though, shouldn’t he take into account the impact of the various ministry/agency demands on one another and on the overall economy and allot accordingly?

Andrew Holness did no better, however, and as the one where ‘the buck stops’, has no excuse. He must, therefore, be asked whether his proclaimed 10-year plan to slay the crime and murder monster will include any human and technology capital increases.

Increased productivity must apply not only to business sectors but also to local communities. From my perspective then, it was a near miracle to hear Andrew actually referring to violence interrupters (VIs) and to the PMI, the Peace Management Initiative, whose approach was so significant.

Or was this just talk, as so often just PR? Howsoever that may be, time will tell. One thing in any case is very clear: if the community youth being drawn into crime are themselves unable through trained VIs to access training and employment in technologically advanced industries, the cultural change desired will be a mirage.