Friday 30 March 2012

The Global Mail on productivity

Over at The Global Mail Mike Seccombe has written an interesting article on productivity in An Unproductive Obsession. In it he notes the decline in productivity in Australia and some of the counter-intuitive aspects of it (e.g. declining labour productivity in the mining sector, increasing productivity in the manufacturing sector). He also notes how hard it is to measure productivity.

He concludes his report with:
But the summary message of both, under all the McKinseyite management-speak, was that progress lay not in the "labour market flexibility" as usually defined (i.e., driving pay and working conditions down) but in attracting a well-educated workforce and managing them better. Which might seem a bit obvious, but it is at least an advance on the usual cries of business. Instead of "Work harder, you lot" the new cry is "Work smarter, you lot".

Still, the central problem remains: measures of productivity are imprecise, and the prescriptions for improving it are contradictory, often self-serving, and vague.

In the words of Denniss: "Productivity is an important concept, about which much bullshit is spoken."

And those headline figures, which everyone keeps citing as evidence of a crisis, we ask him, do they tell us anything meaningful at all?

"No."

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