I hadn’t had a search for some time on the OECD labour productiveness (actual GDP per hour labored) information, however the launch of the most recent OECD Financial Outlook the opposite day prompted me to spend a while within the (much less user-friendly than it was) OECD database.
It takes some time for all the information to come back collectively, and it is just annual, so the newest near-complete information set is for 2023. On the OECD’s estimates – utilizing nationwide information, however transformed at (estimated) PPP change charges – New Zealand stood twenty ninth out of the 38 OECD international locations (remembering that the OECD now has 4 Latin American “range hires” – all a lot poorer and fewer productive than the remainder of the “membership”).
Treasury highlighted a number of years in the past that absolutely the degree of reported New Zealand labour productiveness could also be understated (due to technical points round how hours labored numbers are calculated/used, relative to the method used for various different international locations). The distinction isn’t small however, as they famous, what’s concerned is basically a level-shift, and doesn’t have an effect on materially comparisons of progress charges (of productiveness) over time. Nor, in fact, does it make any distinction no matter to precise wages or residing requirements.
It’s now fairly well-recognised that productiveness progress has been fairly poor in lots of international locations over the past decade or so (and the distinction between the US and a few of greater European economies has been remarked on usually). Productiveness progress within the typical excessive productiveness OECD nation has not been nice – for instance, for the eight years from 2015 to 2023, the median whole progress in labour productiveness for the highest 10 international locations [excluding Ireland and Luxembourg, for international tax reasons] was 4.9 per cent.
However a lot as we’d wish to catch up once more with these excessive productiveness international locations, maybe essentially the most related comparators for us are the international locations both facet of us on the league tables, properly behind the worldwide productiveness frontiers. In 2015, the beginning of our interval, these have been the international locations with actual GDP per hour labored already inside 20 per cent both facet of New Zealand’s. There are massive gaps each above Slovenia and under Latvia (and, thus, even when the hours difficulty is mounted up, and there are not any adjustments for any of those different international locations, we wouldn’t even come near the subsequent nation above Slovenia),
How has our labour productiveness progress in contrast in opposition to these international locations over 2015 to 2023?
The median productiveness progress price for this group of middle-to-lower (ranges) international locations was 17 per cent. New Zealand, against this, managed 3.5 per cent progress, not even managing to maintain up with the median progress price of the group of highest productiveness international locations (see above).
It truly is a woeful document. And in case you’re questioning if maybe 2024 may need made all of the distinction, on nationwide information (GDP per HLFS hours labored) common productiveness in 2024 was about half a per cent larger than the typical for 2023, so no, not likely. Simply presumably SNZ information revisions would possibly raise our previous productiveness progress a bit, however (a) these 2023 estimates ought to already embrace final yr’s SNZ updates, and b) even on the most hopeful, it’s uncertain any revision would raise our previous productiveness progress even to Japanese charges. It appears fairly possible that we have been actually higher solely than Greece amongst this mid to decrease productiveness group of nations.
Folks are inclined to push again and say “sure, however so a lot of these different international locations are in Europe”, and positive, about two-thirds are. But it surely isn’t as if being subsequent to the US has finished a lot for Canada’s latest productiveness progress (productiveness progress over this era was a contact worse than New Zealand’s, and the extent of Canadian productiveness is way under that of the USA), and fairly a number of of those international locations border both Russia or Ukraine (Estonia seems to have taken fairly a success), and Israel has been preventing a warfare (there’s 2024 information for them, no larger than the 2022 numbers). And to the extent geography issues, and it nearly definitely does, it’s a binding constraint now we have to dwell with, not an excuse for perpetual underperformance (we have been, in any case, even in my lifetime – simply – nonetheless in higher tier of superior international locations). It’s a reflection of a collection of poor coverage selections, and the evident rising indifference of our legislators (and bureaucrats?).
And worse, there isn’t any sense of urgency, about outcomes that form the lives and choices of this technology and the subsequent. The glib “oh, they will at all times go to Australia” – itself not a stellar performer – is not any respectable foundation on which to construct a rustic.
I hadn’t had a search for some time on the OECD labour productiveness (actual GDP per hour labored) information, however the launch of the most recent OECD Financial Outlook the opposite day prompted me to spend a while within the (much less user-friendly than it was) OECD database.
It takes some time for all the information to come back collectively, and it is just annual, so the newest near-complete information set is for 2023. On the OECD’s estimates – utilizing nationwide information, however transformed at (estimated) PPP change charges – New Zealand stood twenty ninth out of the 38 OECD international locations (remembering that the OECD now has 4 Latin American “range hires” – all a lot poorer and fewer productive than the remainder of the “membership”).
Treasury highlighted a number of years in the past that absolutely the degree of reported New Zealand labour productiveness could also be understated (due to technical points round how hours labored numbers are calculated/used, relative to the method used for various different international locations). The distinction isn’t small however, as they famous, what’s concerned is basically a level-shift, and doesn’t have an effect on materially comparisons of progress charges (of productiveness) over time. Nor, in fact, does it make any distinction no matter to precise wages or residing requirements.
It’s now fairly well-recognised that productiveness progress has been fairly poor in lots of international locations over the past decade or so (and the distinction between the US and a few of greater European economies has been remarked on usually). Productiveness progress within the typical excessive productiveness OECD nation has not been nice – for instance, for the eight years from 2015 to 2023, the median whole progress in labour productiveness for the highest 10 international locations [excluding Ireland and Luxembourg, for international tax reasons] was 4.9 per cent.
However a lot as we’d wish to catch up once more with these excessive productiveness international locations, maybe essentially the most related comparators for us are the international locations both facet of us on the league tables, properly behind the worldwide productiveness frontiers. In 2015, the beginning of our interval, these have been the international locations with actual GDP per hour labored already inside 20 per cent both facet of New Zealand’s. There are massive gaps each above Slovenia and under Latvia (and, thus, even when the hours difficulty is mounted up, and there are not any adjustments for any of those different international locations, we wouldn’t even come near the subsequent nation above Slovenia),
How has our labour productiveness progress in contrast in opposition to these international locations over 2015 to 2023?
The median productiveness progress price for this group of middle-to-lower (ranges) international locations was 17 per cent. New Zealand, against this, managed 3.5 per cent progress, not even managing to maintain up with the median progress price of the group of highest productiveness international locations (see above).
It truly is a woeful document. And in case you’re questioning if maybe 2024 may need made all of the distinction, on nationwide information (GDP per HLFS hours labored) common productiveness in 2024 was about half a per cent larger than the typical for 2023, so no, not likely. Simply presumably SNZ information revisions would possibly raise our previous productiveness progress a bit, however (a) these 2023 estimates ought to already embrace final yr’s SNZ updates, and b) even on the most hopeful, it’s uncertain any revision would raise our previous productiveness progress even to Japanese charges. It appears fairly possible that we have been actually higher solely than Greece amongst this mid to decrease productiveness group of nations.
Folks are inclined to push again and say “sure, however so a lot of these different international locations are in Europe”, and positive, about two-thirds are. But it surely isn’t as if being subsequent to the US has finished a lot for Canada’s latest productiveness progress (productiveness progress over this era was a contact worse than New Zealand’s, and the extent of Canadian productiveness is way under that of the USA), and fairly a number of of those international locations border both Russia or Ukraine (Estonia seems to have taken fairly a success), and Israel has been preventing a warfare (there’s 2024 information for them, no larger than the 2022 numbers). And to the extent geography issues, and it nearly definitely does, it’s a binding constraint now we have to dwell with, not an excuse for perpetual underperformance (we have been, in any case, even in my lifetime – simply – nonetheless in higher tier of superior international locations). It’s a reflection of a collection of poor coverage selections, and the evident rising indifference of our legislators (and bureaucrats?).
And worse, there isn’t any sense of urgency, about outcomes that form the lives and choices of this technology and the subsequent. The glib “oh, they will at all times go to Australia” – itself not a stellar performer – is not any respectable foundation on which to construct a rustic.
