So tired …
Of productivity talk. On dicussing the NZIER report (which we discussed here) Kiwiblog mentions:
Productivity growth is all important.
Productivity is a ratio – I could increase it right now by shooting half the population. It is the output that matters here, and how much we have to sacrifice to get it. Increasing output (which we value) while sacrificing things we don’t value as much as the output is key – not productivity growth persee.
This distinction is important because “productivity growth” is going to fly up over the next couple of years – as unemployment will rise. This isn’t necessarily a good thing, and it is not because of any parties polices.
When Labour was in power I was annoyed that output, and productivity, were ignored – as they ignored that in order to gain these “other things” like equality we were sacrificing some output. Now everywhere I turn ALL I HEAR is productivity.
Why don’t we just learn to look at the trade-offs associated with policies and then do what is in societies interest – instead of targeting arbitrary ratios.
I’ve already talked about this here and in the Dom BTW. I need a drink.
It is neither productivity nor output. It is balance. All we can do is to move toward a better balance, or smoothness among elasticities; but we can never reach it.
Equally frustrated. The number of times the PM has uttered “we need productivity growth” without ANY mention of how he’s going to do that astounds me.
I remember him specifically stating that productivity growth was going to come from the tax cuts during the election campaign. BIG believer in the Laffer curve it seems, even though it’s been shown as overly simplistic and seems to have little to do with the productivity issues we face (we don’t need incentives to work longer hours).
I’m always skeptical when a metric becomes the goal. It seems to always end badly with the law of unintended consequences to the fore.
What bothers me about the productivity mantra these days is no one who invokes seems to ever offer a plausible way of achieving it. It comes across as more of a fervent hope or a really big wish….or maybe a mantra in support of some article of faith.
I suspect this is why nothing ever changes. The ticket-clipping, slef-styled ‘entrepreneurs’ wouldn’t know a winning strategy if they fell over it.
Rince and repeat with respect to “innovation”…the thing that is supposed to deliver higher productivity…and also almost never defined.
Whenever I now hear someone talking about innovation to enable higher productivity, I generally save time and effort by noting “empty waffle” as my summary of what was said.