Friend Debbie K referred me to a piece by John Quiggin in the Guardian, Like a zombie, the productivity doctrine is back – we need to fight it. What did I think, she asked? This is what I wrote in reply:
I have only scanned John's piece quickly, but I would agree in part: making people work harder is not real productivity improvement; we saw aspects of that in the 1990s; improving labour utilisation is important. I would also disagree in part; there is scope for gains in some of the areas that he talks about. But I also think that much of the discussion misses the point because of the narrow scope applied to micro-economic reform. But that's a broader question.
Now that I have read John's piece, I would strengthen my position. To the degree that John is arguing against some of the arguments coming from the business sector and others that we must all work harder just to stay where we are, then I would support his argument. However, I cannot accept his argument that that a focus on productivity improvement is not a good thing, a zombie to be killed, nor would I accept his somewhat swinging attacks on micro-economic reform. I have previously argued in this place for a new focus on productivity improvement.
I would agree with John that improved work force utilisation and training are key elements in productivity improvement, although I also think that the somewhat simplistic approach adopted to training - more is better, so long as it complies with ticks and rules, - means that the cure is sometimes worse than the disease. A tick, after all, is also an insect whose bit can kill kill an animal.
I also suspect that John would agree with me when I say that I have little faith in many of the productivity nostrums coming from the business community and especially the big end of town. After all, and with exceptions, their record in their own businesses is not especially good. Business and indeed Australia more broadly, has a cost not productivity culture.
As a simple example, take Dick Smith Electronics. Under Woolworth's, that business effectively collapsed. Twelve months or so ago, it was sold as a basket case for $20 million. I'm not surprised. I went into Dick Smith a year back and there wasn't a damn staff member to help me. I wandered the floor looking forlorn, but no-one came.
Twelve months later, the Dick Smith business is worth between $520 and $600 million. That's a profit! No doubt many things contributed, but I will give you a small example. Three weeks ago, and reluctantly, I went back into that Dick Smith store simply because it was convenient. Again, I wandered around looking forlorn. This time some one came up to help me, answered my questions efficiently, and dispatched me from the store quickly carrying my goodies. Now that's productivity improvement!
Just a note at this point.
As it happened, Ramana looked at a part of all this yesterday in a A Mid Week Holiday; the post includes a link to Get a life, an Economist piece on working hours. This concludes:
So maybe we should be more self-critical about how much we work. Working less may make us more productive. And, as Russell argued, working less will guarantee “happiness and joy of life, instead of frayed nerves, weariness, and dyspepsia".
There was also an interesting piece by Ian Heathwood in On Line Opinion, Older workers wrongly shunned for jobs. Here Ian wrote:
A third of the business leaders surveyed reportedly said older workers did "not like being told what to do" by a younger person, are more forgetful and dislike new technology. Business leaders feel older staff have difficulty learning new things and do not want to work long hours.
When I first read the piece, one thing that I noticed was the reference to long hours.
Its not how long we work but how we work, that's important. If you divide salary by hours worked, staff who work longer hours may notionally cost less per hour our, but that says nothing about their value. That's quite a different issue.