13. Productivity is what improves income and standard of living
Productivity is efficiency that maximizes output while minimizing inputs. In the United States, it is the most important indicator that is tracked every quarter. If your productivity is going up, it almost always follows that your competitiveness, as well as your quality of living goes up. Regretfully, it is not given much importance or credence in the Philippines.
If low wages were the sole barometer of where companies want to invest, they would all be going to Africa. When NAFTA ( North American free Trade Agreement) was signed which allows Mexico free access to the United States market, it was predicted that the Americans would lose their jobs to the Mexicans, who are willing to work at minimum 5 or 6 times less salary. But that has not happened. If the American worker is more educated, and skilled, and as a result can produce units or value 10 times more, then he can still be a more valid alternative.
The reason why China is so strong, is that while its wages have doubled since 2000, its productivity have risen almost fourfold. In contrast, productivity of the Filipino workers was noted to have risen only 2.3 percent in the 1995 -2000 timeframe, and by a marginal 0.9 percent in 2000-2005.
Take, for instance, two firms, firm A and firm B, with the same level of output. Firm A however utilizes lesser input than firm B. Thus, firm A is more productive. With lesser usage of input, it is expected that firm A will have a lower cost of production and can charge a lower price for its products. Consequently, it is likely to have a larger market share and higher revenues.
Improving productivity through skills training and education is essential in attaining global competitiveness with the end goal of achieving sustained economic growth.
May 21st, 2010 at 9:03 am
Agreed Wilson!!! Productivity (and education/training) is a key to poverty alleviation as well.
May 31st, 2010 at 9:19 am
Agree..productivity and the need to have better institutions. the problem with most developing countries are; basic infras, better institutions and the need to look at innovation and sophistication factors.
May 31st, 2010 at 9:20 am
@ Admin and Dondi,
Is this Wilson Ng’s blog?
- thanks
May 31st, 2010 at 2:14 pm
Hi adrian,
Yes,,,, how did you get to know me?
May 31st, 2010 at 4:10 pm
Hi,
You have a column at sun star on technology and i think you also have a band or group of music enthusiasts that played during last year’s sun star econ forum.
-cheers
July 2nd, 2010 at 10:07 am
yes and in the phil. racism is at hand and ongoing.. filipinos are merely workers and slaves and are exploited in their own country.. in our own country.. hope P. Noy will look into it and develop it.. and change it.. big change.. BIG BIG CHANGE FOR THE SAKE OF THE WORKING PROFESSIONALS.. AND MASSES..
July 2nd, 2010 at 10:31 am
take for example of the esl/efl teachers for foreigners.. have a research and publish it.. you will be shocked of how our own teachers… our human resources are exploited in our own country.. !!!! please any nationalist who can do something about this.. !!! P. NOY’s one sister is a teacher… an educator too.. i hope she can look deeply into it… this is Phil’s human resouce.. we must take note of this and TAKE CARE OF IT.. AND NOT ALLOW THAT IT BE EXPLOITED FOR A LONG LONG AND LONGER TIME NOW.. !!!!!!!!
July 11th, 2010 at 6:39 am
i agree. we must do away with the minimum wage law. it is the main culprit of productivity of this nation. the common laborer would always say “why would i work faster, harder if i would be paid the same rate as that of someone who’s not as hardworking as I am.” if our laborers are paid based on productivity, i’m quite sure that output will double or even triple in no time.