A Guy’s View: Productivity and growth

One of the factors that has been blamed for this country’s lack of economic growth is low productivity. The last I heard was that productivity in Barbados has not increased for twenty years. Statistics like this are often raised when consideration is being given to salary or wage increases for workers. 

In the pure world of economic theorists, one would struggle to justify granting salary increases in the absence of increased productivity. One could expect to hear employers make the link between productivity and wages in the near future, for they will seek to moderate expectations for increases in the wake of the public workers remuneration increase that is imminent. 

Often, at the base of the low productivity complaints is the hint of our people’s laziness. Of course, political correctness does not now allow decent discussants to voice that label outside of their private circles. But one only needs to listen to what is not said to understand what is meant. 

There are several other reasons for unproductive workers. A close look at our society might reveal a number of them. One that is never discussed is poor management. This vital activity in the production process is fairly well understood in the private business sector, at least in theory, but in this context, its application is relevant to both the private and public sectors. Productivity is no less important to a public entity than it is to a private company.

Well run private companies set targets for their workers. It is understood that low productivity has consequences for the enterprise, and hence the worker and manager. At the macro level, persons manage the affairs of state. If there is low national productivity, the state managers cannot escape scrutiny.

Barbados has an aging population and a falling birth rate. Smartly, we have increased the retirement age, thus requiring workers who would have retired at age 55 or 60 to work till almost 67. This was designed to protect the National Insurance Scheme. Maybe it did, but it had consequences that were probably not foreseen.

Older people are usually wiser, but not physically stronger. It is wholly unrealistic to expect the level of production from a 65 year old worker that would come from a 30 year old person. An older workforce will naturally be less productive.

And then there is the psychology of work. The North American Indians said that you should not judge a man until you have walked a mile in his moccasins. When we discuss productivity we should put ourselves in the position of those who were planning to retire at 60 years and are now forced to work until the age of 67. Having been in the workforce for so many years, some of those that are tired now master the art of being on the job without contributing to the job.

Absenteeism has long been an issue in Barbados. Occasionally we hear about the number of sick leave certificates issued to workers by doctors. I find it interesting when I hear none-doctors pronouncing on the convalescence leave given to patients by their doctors. That is a journey I am not willing to take. I pride myself on learning something about many things, but I have no training in medicine.

An absent worker cannot be productive, and if there is a high level of absenteeism, this would have a negative impact on productivity. But, like many other things, this issue has been looked at in isolation. A closer look needs to be taken at why our level of absenteeism is as high as it is.

People ail as they age. Younger people fall and get up and keep moving. It is not so easy for the older person. The saying that life begins at 40 really means that old age begins at 40. That seems to be the age that the aches and pains start to surface. Many of the incidents that had no lasting effect in the younger days begin to announce themselves. It is impossible, therefore, to divorce the fact that more of our workers are older people from the level of absenteeism in the workplace. 

It must also be considered that the younger people who are now entering the workforce have a different view of work than their parents did. Public sector managers complain that too many of these new workers are not all that interested in their output. Instead, they focus on the leave from work that is available to public servants who are enrolled at the University of the West Indies or the Barbados Community College, or the non-work activities of their peers. They are physically able, but they are not very productive.

It may be difficult to find disagreement with the view that increasing wages and salaries in the absence of increased productivity equals financial deficit, for both business and country. And when you already have a big deficit, you are creating a worse situation out of a bad one.

This financial truism must be balanced against the demands for increases in worker remuneration. Although productivity remains flat, prices have not. Thus, real wages have been eroded. In order to be brought back into parity, increases in remuneration become necessary. To justify no increase in remuneration, there would have had to be a prices policy to control inflation. In the absence of such a policy, wage and salary increases are needed, even where there is low productivity. The only question is what level of increases can be afforded. 

By now, the authorities would know that the same employers who would like to see a wage freeze, would shout if they were prevented from increasing the prices of their goods and services. It is impossible to please people who would not be pleased. So you just have to do the right thing.

When Sir Branford Taitt was the Minister of Consumer Affairs and there was a strong price control system in place, he had non-stop battles with the merchants of this country. One wonders whether our refusal to go there again, even in the face of salary freezes, is the memory of those battles.

Whatever the reasons, Barbados will not develop with unproductive workers. We may continue to hear justifications and excuses, but our country will go nowhere. We simply have to find ways of making our workers productive again. In this regard, we have to recognise that old people do not make productive workers. But if we have no young people to work, what do we do? Yes, there are young people leaving school but they may not find many spaces in the workforce, because of the extension in the retirement age.

Both private and public sector managers complain about the quality of the product coming out of our learning institutions. Further, these able bodied young people are joining the workforce when there is a rationalisation exercise on the way. It matters not how able and willing you are to produce, if you are not in the workforce, you cannot contribute to production.

Production is a function of effective management, able supervision, and healthy, knowledgeable workers. We need an honest examination of our systems and do what is necessary to strike this balance.