Something I try to assess all the time, and it’s hard to do well because chance observations can be misleading, is what appears to be happening to labour productivity in Jamaica. For the longest while, it has been low and falling in Jamaica, but also in the Caribbean, but with our workers lagging badly. My general impression is that so much focus is on the broad aggregate ‘economic growth’ that many do not see or consider that even if the country grows fast it could be happening at a rate where each person is producing or contributing less than before. That may not strike many people because few are paid by performance so cannot get even a direct indication of how well or poorly they are working because their remuneration change. (As ironic aside: It’s likely that organized crime is one area where productivity is well noted. Few gangsters are satisfied with the total take rising while the numbers in the crew may show that each gang member is bringing in less per head. What that tends to do is to find ways of eliminating the underperforming members or to find activities that can raise the average yield of members.)

Although the official data are somewhat out of date, they are showing that employment in Jamaica is rising (up 4 percent October 2017 over October 2016) and unemployment is falling, and within that youth unemployment is falling faster that the average. That should fill many with hope, not least because, if you believe that a rising ship will life all boats, then evidence seems to be there that the tide is rising. For those who see that as one of the keys to reducing a major drag on the economy–crime–this is a very good sign. Unemployment has fallen to the lowest rate in 8 years, at 11.7 percent. But, I think it’s ludicrous to believe that Jamaica has only 140,900 unemployed people, as reported in the official statistics. I wont go into the many caveats that surround employment and unemployment data and what they may mean when one considers who is going in and out of the labour force, or that the numbers of underemployed are not well captured.

Some commentators are noting that the increase in employment is not being matched by an increase in output, ie that labour productivity is declining–not a new thing, but the sort of thing that needs to change if Jamaica is to become a different economic space. Jamaica’s GDP growth rate is puttering around 2 percent, and the latest projection from the Finance Minister is for 2.5 percent in the next fiscal year, 2018-19. So, as they say, ‘Houston, we have a problem.’ That growth rate is being generated by falling productivity. This is not a new problem and has been highlighted often by official and private assessments, see, for instance, Dennis Chung commentating on fixing labour productivity problem last December.

It’s a big elephant in the Jamaica economic policy room and, so far, I’ve seen little that is happening to make that change.

But, here is a sad truth. Amongst those who seem hell-bent on worsening labour productivity are those who have been charged with framing and shaping the nation’s policies–its politicians. If you don’t see or understand how they do that just note the following observation about the simple matter of when the politicians decide to get down to work.

Parliament being its usual late self: https://twitter.com/djmillerja/status/965968765098840069

They say a fish rots from its head…

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