JAMAICA'S PRODUCTIVITY will have to improve if the country is to progress in the modern global economy, according to leading Caribbean analysts, citing dismal performance in several sectors and a continual failure to properly address the issue, as reasons for the continued slump.
"We need to ensure that productivity is increased dramatically," Professor Neville Duncan, director of the Sir Arthur Lewis Institute of Social and Economic Studies, told a Planning Institute of Jamaica (PIOJ)/European Union seminar on the Jamaica Labour Market in the 21st century, in Kingston last week. "If we do not do that, friends, we are going to be history," he said.
His comments came shortly after a damning presentation by Benthan Hussey, PIOJ labour market consultant, which compared Jamaica's economic growth and productivity to Caribbean and other countries and dissected the reasons for poor local sector performance.
Against Trinidad and Tobago, the United States, the Dominican Republic, Canada, Barbados and Singapore, Jamaica's productivity from 1960 to 1990 fared poorly, registering a mere 18.8 per cent growth. Singapore scored an impressive 386.6 per cent, while Barbados managed 118.9 per cent. It appears that after a good start between 1954 and 1969, Jamaica's productivity deteriorated throughout the 1970s and 1980s from an average rate of 5.19 per cent between 1960 and 1969 to negative rates in both subsequent decades -1.36 per cent and -1.11 per cent respectively.
WAGES AND LABOUR COSTS
In a national context, the poor performance was compounded by rising wages and an increase in unit labour costs. The poor, negative productivity growth of -1.4 per cent between 1972 and 1998 was made worse by an increase in wages of 1.8 per cent and a 3.1 per cent increase in unit labour cost.
"When you bring all three realities together," Mr. Hussey remarked, "you are looking at danger. Increased labour productivity should be the basis of wage increases. If wage increases exceeded productivity, then there will be a deterioration in economic competitiveness."
Dissecting productivity across various sectors, Mr. Hussey placed mining and electricity, gas and water as areas that had performed relatively well since 1975, placing the agricultural sector at the bottom of the heap. Indeed, according to Mr. Hussey's research, the mining and quarrying industry outperformed the agricultural sector by 47 times in 2001, while the manufacturing industry, despite improving on its own productivity across the last quarter of a century, has lost ground on the mining sector. In 1975, mining and quarrying were outperforming manufacturing by six times and, in 2001, that figure had risen to seven.
Mr. Hussey cited JAMPRO's apparel sector study to explain the poor productivity of the manufacturing sector. JAMPRO's study of 10 Caribbean and Latin American countries placed Jamaica at the bottom of the pile when it came to hours available for working, and top of the list when it came to indirect labour and fringe benefits costs per year. This "explains the reality of our sub-sector", he said.
His review was chilling.
"Several generations of workers have been bred and nurtured by an economy and society that have not placed emphasis on productivity," he said. "The country has not captured the concept through measurement and procedures. Consequently, there is no imbibing of it by the general community. Reward and performance are not correlated," he added.
POOR EDUCATIONAL AND SKILL BASE
"In January 2001, over 80 per cent of the workforce was engaged in low productivity activities," he said, noting that those workers were not skilled or educated.
"The workforce data also reveal that at January 2001, over 17 per cent of workers were employed in elementary occupations, thereby not requiring significant skills or educational achievements. We need to reduce that figure and very fast," said Mr. Hussey.
He recommended the application of productivity indicators as vital to reviving industry. Perfor-mance management approaches should be used and productivity should be rewarded, as it exists in more progressive economies.
"If we are not aligning ourselves properly, then we are in for a difficult time," he warned.
NATIONAL TRIPARTITE PRODUCTIVITY CENTRE
Recently, both the trade unions and the Jamaica Employers' Federation called for the swift introduction of the much-hyped National Tripartite Productivity Centre. This is the latest in a long line of productivity initiatives that have promised much, but delivered little. In 1966, the Productivity Centre of the Jamaica Industrial Development Corporation (JIDC) was established, followed in 1975 by a Government productivity drive, spearheaded by the JIDC, which involved all agencies but was not built upon. "The country missed a golden opportunity," Mr. Hussey lamented. In July 1990, the National Productivity Council was introduced under JAMPRO. Despite these attempts, productivity has remained relatively low.
Reynold Simons, senior specialist in Employment and Labour Market Policy at the International Labour Organisation, repeated the concerns. "It is critical that we think of ways to develop strategies to increase production," he said. "Productivity has become the tool of competition."
