The primacy of labour productivity in Jamaica’s economic growth strategy
DON Robotham is a development economist, sociologist, and anthropologist who has dedicated his illustrious career at The University of the West Indies and prestigious institutions of higher learning abroad to finding answers to the thorny issues standing in the way of countries like Jamaica escaping the resource-rich, revenue-poor trap.
In a March 17, 2024 Sunday Gleaner column titled ‘Is the issue simply productivity’, he writes insightfully: “The debate about the failings of the Jamaican economy has largely focused on productivity. The argument has been that our productivity is low and the task is to increase productivity. But is low productivity the core issue? The answer is no! The core issue for the Jamaican economy is that we remain a low value-added economy exporting largely raw materials and raw services.”
With due respect, I think the learned gentleman is splitting hairs, confusing causes and effects. One does not have to diminish the central role of productivity as a way of elevating the importance of computer literacy and other qualifications associated with economic complexity without which the ability of a country to produce value-added goods and services for export is seriously impaired.
Robotham defines economic complexity as capturing the level of value-added of an economy. In his column he referenced Harvard University’s Atlas of Economic Complexity, which reveals that between 2010 and 2021 Jamaica slipped significantly in its ability to produce value-added products and services for export as measured by this index. He overlooked the more important data from the Jamaica Productivity Centre which shows that for the 42-year period 1976 to 2017 labour productivity growth in Jamaica averaged negative 0.61 per cent annually.
The correct balance between productivity and the concept of economic complexity was struck by the director of modelling and research at the Planning Institute of Jamaica (PIOJ), Hugh Morris, during a quarterly press briefing on May 27, 2024. Responding to questions from the Jamaica Observer, he said, in part, the following: “For us to grow above the one to two per cent, we have to address the productivity gap… A country will only grow faster if it is able to produce more goods and services that are also more complex…” Rochelle Whyte, senior technical advisor to the director general of PIOJ added: “Investment in human capital to ensure that persons can attain the necessary skills needed to function in some of the newer industries is also vital in achieving this growth.”
Writing in the June 2, 2024 edition of the Sunday Observer, senior lecturer in economics at The University of the West Indies, Dr Andre Haughton, also maintained the cause and effect relationship between the two variables: economic complexity and productivity. “Another issue is the 83 per cent of Jamaicans that have not attained any tertiary level education, thus limiting their ability to move into the middle class. This lack of education coupled with widespread corruption have been identified as two of the biggest hindrances to labour productivity growth on the island. As a result, we see a range of issues: low wages, a low standard of living, low output, low technological adoption, low business sophistication, low innovation, and low self-esteem among the populace.”
June 20, 2024 will be celebrated as World Productivity Day. A three-day summit, beginning June 20, will be convened at the University of Technology, Jamaica (UTech) to discuss strategies to drive productivity. Speaking at the media launch held at the UTech campus on May 9, Minister of Labour and Social Security Pearnel Charles Jr placed the event in its national context: “Productivity must be a lifestyle, and the goal of the summit is to initiate conversation around transforming Jamaica. The intention is for us to move productivity into all spheres.”
Minister without portfolio in the Office of the Prime Minister with responsibility for skills and digital transformation, Dr Dana Morris Dixon, seamlessly integrated productivity and the need for upskilling. In press reports of the event, she said that a commitment to productivity extends to developing a workforce that is digitally literate and equipped with the skills to thrive in a rapidly changing environment.
We are all on the same page, saying the same thing, albeit from different perspectives. Energized, no doubt, by Professor Don Robotham’s clarion call to purposeful action.
One hopes that at the UTech summit the correct balance will be struck between the variables in the productivity equation, starting from the position that increasing productivity is the focal objective we must in common adopt towards attaining significant and consistent economic growth.
One hopes the right balance will be struck between cause and effect in the productivity equation.
Send comments to hmorgan@cwjamaica.com.