A couple of recent news items are hard to reconcile.
First, the Canadian Index of Wellbeing suggests people feel rushed and constantly out of time.
The report linked economic, health, social, cultural and environmental indicators to Canadians’ quality of life. It found fully 20 per cent of people felt caught in a “time crunch”- hard-pressed to do all they are expected to do. Their lives are suffering as a result.
Which brings us to the other report, which suggests Canadians are laggards when it comes to productivity.
In the first quarter of this year, Canadians posted the largest increase in working hours since 2004. And wages failed to keep pace with that increase in hours worked – so labour productivity was deemed to have risen 0.7 per cent.
In plain English, we worked more for about the same pay, which lowered the average cost of Canadian-produced widgets.
While we moved the productivity meter the right direction, economists were underwhelmed. They expected higher gains in productivity. We didn’t get much bang for the proverbial buck.
This isn’t surprising.
Canada’s productivity has been lacklustre for several decades.
Which leads us to the dichotomy.
As a nation, fully 20 per cent of us feel rushed and out of time – we work long hours, leaving little time for the other stuff. Yet, despite the work ethic, the nation isn’t as productive as it should be.
We’re running to stand still.
So, what gives?
Well, it could be that we’re squandering too much time answering inane e-mails, cruising Facebook or watching YouTube.
Or, maybe, something more profound is at play.
Unlike unemployment or fiscal deficits, productivity is difficult to measure. And, unless you are an accountant, economist or some other financial weirdo, Canadians don’t talk about it much.
But it is important. Boosting productivity lowers prices, raises wages and creates jobs. It also improves living standards and makes an economy more adaptable, at least according to Kevin Lynch, former head of the Privy Council.
And, posted on a number-cruncher’s productivity ledger, Canada looks like a weed addict.
In 2007, we were ranked 17th among OECD nations when you tally output per worker per hour worked. But we worked longer hours than most OECD workers, so when you compensate for that we ranked eighth overall.
Nevertheless, despite all the effort, the average Canadian worker was producing just 75 per cent as much stuff as their American counterpart.
Now, if you listen to productivity wonks, there are several reasons for our waning productivity. And it’s not marijuana.
Our low-valued loonie made us more competitive in terms of exports, but it made it more expensive to outfit our firms and plants with more efficient technology. Consequently, those investments often weren’t made – instead, Canadian business relied on older, less-efficient tools and processes.
Canadian business spends about half what US firms spend on research and development and training – which hurts our productivity.
And, more surprisingly in our wired world, Canadian business uses cutting-edge information technologies about half as much as their US counterparts. Again, to the detriment of their efficiency and productivity.
That hurts us. But it’s only going to get worse. Because our worker pool is shrinking.
The boomers are starting to retire. That represents a double whammy – already, our workforce isn’t as efficient as it should be and the workforce is thinning, which just increases the necessity to be more productive.
So what’s the solution?
Well, for starters, Canada needs to invest in better equipment, information technology and more efficient methods of production.
But it also has to put more money into education.
Canadian provinces have drastically cut transfers to the nation’s post-secondary institutions, and that trend has to change if productivity is going to improve, according to Fading Productivity, a 28-page evaluation of the problem released in 2007 by the Certified General Accountants Association of Canada.
It also recommends employers must train workers better, and invest in their continued education, noting there had been a precipitous drop in such training in Canada.
And governments must figure out a way to streamline business regulations, specifically those surrounding intellectual property rights and contracts, which, apparently, are inhibiting the industry/university collaborations that often lead to new products and groundbreaking discoveries.
Now, it also needs to be mentioned that the inefficiency of the Canadian worker, when judged against their US counterpart, has been a tad overstated – many of the studies were done in 2007 before the economic meltdown. And the Wall Street banking orgy contributed a great deal to US GDP – which could easily have made skewed the productivity stats.
However, that really doesn’t change anything.
There are clearly deficits in the Canadian economy – in training, in education, in technology, in research and development – and if Canadians can start to understand they exist, and that it’s a problem, we will start working to fix them.
And the nation will start to become more productive, efficient and adaptable.
The Canadian Index of Wellbeing suggests we know this is an important goal.
Currently, we are working longer and harder and seeing fewer and fewer benefits of that labour.
And that’s the problem many Canadian are citing in that recent study.
Tackling lagging Canadian productivity will make us all a little wealthier. Smarter. And will free up more time.
Life should become a little less frantic.
Who can argue with that? (Richard Mostyn)