"Canada's lacklustre productivity -- masked in recent years by the commodity boom and then largely ignored through the financial crisis -- threatens to slow income growth and dampen living standards over the next decade, economists at Toronto-Dominion Bank warned in a report Tuesday." (Financial Post)
Read this.
"And so what?" Well, I'll tell you what (but first, read this again, 'cause you obviously just skimmed through it) . Productivity (output per hour of work) is intimately linked to standard of living. As the former rises, so does the latter.
Consider that, in the past 50 years, real compensation per hour has tripled in the US and that this increase is due almost solely to an increase in labour productivity, as demonstrated in this chart (h/t economist John Taylor's blog):
In short, a nation's productivity is immensely important, especially when facing a rapidly aging, and therefore declining, labour force, and, as such, lackluster productivity is troubling -- definitely a problem.
Coming up: The solution. Stay tuned.
Oh, and I prefer the American spelling of "lackluster". Just thought I'd throw that out there. K, later.
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