The Productivity Secret

There is a lesson to be learned from the small Kingdom of Bhutan. The workers there have managed to produce more per hour worked in every single year since 1982. By 2011 their GDP per capita had risen 57% (2002 chained dollars). So each person now produces 57% more goods and services than they did in 1982. As you can imagine, life has become pretty good in Bhutan. The work week has been reduced to 35 hours per week, people have more spending money, and by maintaining constant tax rates over that period the government is flush with cash. The public health care which they had in 1982 has been bolstered and now includes prescription drugs and dental. There is a national childcare program and their public infrastructure has been modernized.

Would it be possible for Canada to match these tremendous productivity gains and improve the standard of living of Canadians? The funny thing is, these statistics are from Canada, not Bhutan. Right here in Canada we produce 57% more goods and services per person than we did in 1982. Yet the middle class has had stagnant wages, the poorest 20% of Canadians are poorer than they were in 1982, and personal debt is at an all time high. Our governments provide us with fewer services than they did in 1982, and both Federal and Provincial governments are running a deficit. Even Alberta, one of the richest jurisdictions in the world, is cutting services and going increasingly into debt. As we produce more goods and services per hour worked every year, we are told by our Prime Minister that these are days of austerity and cuts. We are told that we have to work harder and that we must sacrifice to improve the economy.

We need to keep our eye on the ball. We continue to produce more goods and services per person year after year and yet it fails to benefit us. Someone is reaping these benefits, but it isn’t the people of Canada or our governments.

“The economy” is not a hungry god that needs to be fed with ever more growth. It is simply a system we devise to effectively use and distribute our available resources. We must stop letting the economy just happen to us, and instead begin the conversation about the type of economic system that we want. Or at the very least, refuse to accept that as we produce more per person year after year that we need to live with stagnant wages and decreased public services.