Good post on the Productivity Commission blog, Prod Blog.
When it comes to labour productivity, or productivity more generally many people in society assume that an economist saying “productivity is low” is the same as saying “people are lazy”. But this is far from the case. Lisa Meehan clears that up for us:
Poor labour productivity doesn’t mean that Kiwi workers are lazy. Labour productivity measures how much output is produced per hour worked; it doesn’t tell us anything about how hard we’re working. In fact, as we discuss in our paper, New Zealanders work long hours compared with the OECD average. The problem is that despite these long hours, NZ has low GDP per capita – that is, the problem stems from poor labour productivity.
Put another way, ‘labour productivity’ is a convenient (and useful) metric to think keep tabs on our wider productivity performance. But, by itself, the catch-all labour productivity measure tells us little about the performance of workers alone.