New Zealand’s low productivity levels have been in the media this week. The latest OECD figures show we Kiwis work 15 per cent more hours a year than the OECD average, but despite the longer hours produce 20 per cent less economic activity per hour.
The report said New Zealand’s productivity growth rates were in the bottom third of the OECD, sitting alongside Slovenia and the Slovak Republic.
New Zealand workers have only received about 49% of the increases in labour productivity – maybe less – in the last two decades. Owners and shareholders, are getting a bigger share of total output and returns at the expense of employees.
So it’s clear productivity is not a sign of how much we work, and nor is it a measure of economic or other wellbeing for workers.
I agree New Zealand needs more investment in research and development; that will help us adapt to our changing world. But we need to question how our system is working – is it mainly poor management or insufficient capital that makes each hour of work produce less than elsewhere?
The low-wage-long-hours economic strategy that feeds unemployment and justifies below poverty level income support payments is not serving us.
Neither will perpetual growth. We live in a finite world and our economic models do need to start recognising that.