It is rare for the Bank of Canada to say that we face a national economic emergency. But that is exactly what Deputy Governor Carolyn Rogers did on March 26. She was referring to Canada’s dismal record on labour productivity, which is indeed a major, albeit long-standing issue. Her widely publicized speech put a sharper focus on very weak Canadian economic performance, especially relative to the US.
The labour movement has long understood that raising output per hour of work through more investment in machinery and equipment (as opposed to work intensification) lays the basis for negotiating rising wages and living standards and investing in social programs and public services. Higher productivity can also support the reduction of working time.
In the US, governments have more often let the economy “run hot.” Low unemployment results in higher wages which pressure companies to invest in new capital equipment and skills, raising productivity.
I don’t know if there’s data but it could explain why the correlation between wage growth and productivity decoupled over the last 40-50 years. The standard assumed causation is productivity -> wage growth, but that’s shown to be false by the decoupling. If however we assume wage growth -> productivity causation then at least that doesn’t violate the decoupling data.
If however we assume wage growth -> productivity causation then at least that doesn’t violate the decoupling data.
You’re saying that our economy is addicted to using low wage earners (like TFWs) keeping businesses profitable without having to invest in improving labour productivity.
Oh no, did the Liberal party screw up electoral reform? Awwwww dang, guess you’re just gonna have to vote for them or yous gets the conservatives again!
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Not an economist, but these articles seem to suggest that investment is somehow part of the calculation of “output”?
Am I understanding that correctly?
That’s what happens when you privatize crown corporations and stifle competition.
Womp womp.
Meanwhile, the people coming here to work are vulnerable to exploitation.
Two points I found interesting:
I don’t know if there’s data but it could explain why the correlation between wage growth and productivity decoupled over the last 40-50 years. The standard assumed causation is
productivity -> wage growth, but that’s shown to be false by the decoupling. If however we assumewage growth -> productivitycausation then at least that doesn’t violate the decoupling data.You’re saying that our economy is addicted to using low wage earners (like TFWs) keeping businesses profitable without having to invest in improving labour productivity.
People act their wage and Canadian monopolies pay dirt. This is a problem with corporate exploitation, not workers.
Oh no, did the Liberal party screw up electoral reform? Awwwww dang, guess you’re just gonna have to vote for them or yous gets the conservatives again!
Opps didn’t mean to!