Daily Times

Labour productivity is one of the most pertinent indicators of any economy’s health.

Simply put, labour productivity is measured as a country’s Gross Domestic Product (GDP) per worker. An individual worker’s share in the GDP depends on other associated inputs too. Labour productivity is, however, still considered one of the most important elements that affect GDP growth. Economists around the world put much weight on the investments in enhancing labour productivity; owing to yield higher returns of investments across all sectors of the economy. Labour productivity, thus, remains one of the most crucial factors in the growth of a nation’s economic wellbeing.

In terms of per-worker labour productivity, Pakistan’s labour productivity index has grown on an average annual rate of 1.5 per cent since 2000. According to the estimates enumerated by worldwide statistical databanks, Pakistan’s labour productivity remains sluggish in comparison to India and China. Both our neighbouring countries started far below us in the year 2000. However, our lack of ability to keep up the desirable pace of annual labour productivity growth now leaves us far behind these two neighbouring countries.

Paradoxically, the relationship between labour productivity and economic growth is more like an egg and chicken relationship. Both cause each other; without clearly determining what comes first. However, the practices of growing and developed economies suggest investments in favour of labour productivity to attain an essential critical mass for achieving fast-paced economic growth. For convenience, let us bank upon the idea of enhancing labour productivity as one of the crucial means to achieve higher economic growth.

Numerous factors could be accrued to higher labour productivity. However, investment in the following four areas seems more crucial and seeks immediate attention of our public policy makers and implementers:

Education and skills’ training

Efficiency of business and occupational safety processes

Efficiency of the service sectors

Change of behaviour to augment work ethics

Empirical studies around the world have succeeded in establishing a strong link between education/training and labour productivity. Needless to say, an educated and skilled worker is a more potent constituent of an economy. However, our economic outlay yet remains challenged with a lack of resources for investments in education and skill training. Economic Survey of Pakistan 2018-19 reveals that we have a meagre 2.4 per cent of GDP that was projected for spending on education in 2017-18. It would be a sight to see any nation aspiring economic growth and development with such a low level of investments in education. A large segment of potential labour force thus continues growing as undereducated, untrained and under-productive workers consequently.

More to add, our education system does not focus on incorporating basic critical skills about computation and Urdu/English linguistics. Lack of these basic skills dissuades the primary school graduates, who form a major part of our labour force, from accessing skills training required for enhanced efficiency. We are yet considering to further strengthen faith-based elements within our primary school curricula. The upcoming primary school graduates, who are expected to join the labour force sooner, would have a stronger comprehension of Arabic language consequently. However, this aspiration is also expected to leave the outcome of our upcoming education system further alien to skill training. Since the skill training curricula and manuals are produced in English or Urdu language, such graduates will have further compromised skills to access the contemporary body of skill-related knowledge and information. We unequivocally need additional investments in education and training but that in the right direction too.

The relationship between labour productivity and economic growth is more like an egg and chicken relationship

Such an inadequately and under-educated labour force becomes a burden to the businesses. The lack of workers’ ability to read and write leaves them unable to appreciate the need for efficient business and occupational safety processes. Not only that we have fewer opportunities to offer our workers to enhance their basic life and work skills, but a poorly trained worker is also no good for him/herself at the outset. Let alone we expect higher productivity from such enfeebled workers.

Ostentatious sights of workers performing important and hazardous jobs without the use of necessary equipment and safety measures are more than often. Resultantly, low outputs, frequent accidents and prolonged illness of workers are casting our economy a terrible price. The businesses and the workers also fail to imbue a trusted relationship that complicates the situation further. Individual miseries insinuated by a lack of employer-employee relationship then accumulate to a low productive economy. The public policy wheelers thus owe an immediate and concerted focus on augmenting abilities of our labour force at hand. We have a seminal system of workers’ education that need crucial strengthening.

The service sector that forms the largest part of our economy also causes significant damage to our national productivity index. The plight of our service delivery units speaks loud enough about their efficiency. Un-orderly and unhygienic premises where innumerable people work in the services sector can not be expected to deliver efficient services to their clients. A diligent monitoring system along with the strengthening of public [beneficiaries] participation is direly needed to improve the efficiency of the service sectors.

All of these factors are interconnected too. Our lack of ability to render higher productivity leaves the workers with less of other choices than to avert diligent discharge of their duties. Following work ethics are seldom sights around. As a result, we are left with a labour force who do not take pride in being a hardworking means of production.

Recall Tressa May who, whilst grappling with UK’s ejection from European Union (EU), loudly expounded a national narrative of being a hard-working nation. She represented a common belief of the UK nations on hard work as being the most reliable instrument to overcome likely economic damages of leaving EU. Americans, Europeans, Sri Lankans, Indonesians, Malaysians, Thailanders – and many more – are the nations who first nurtured a national narrative of being a hardworking people. All of their higher productivity and economic well-being came only later, consequently.

It is widely believed that the ability to perform any task makes it a more probable disposition that the task would be performed with diligence and efficiency. The abilities to perform economic activities, thus, remains crucial in embedding a stronger motivation to render higher performance within the workers. Let our labour force educate and train well if we wish to improve our labour productivity.

The writer is a development professional