Jasmine Ramze Rezaee wants you to think twice when Ottawa says we have a productivity problem.
Prime Minister Mark Carney links weak productivity to rising costs.
“Our long-standing weak productivity is making life less affordable for Canadians,” Carney said in a speech in May. “It’s beginning to strain our government finances and starting to put at risk the social programs on which Canadians rely.”
The metric — calculated as real GDP growth per hour worked — is one way to measure the efficiency of Canadian workers. As Bank of Canada senior deputy governor Carolyn Rogers explained in a speech last year, strong productivity means faster GDP growth and higher incomes.
It also leads to a stronger tax base — meaning more money with which the government can fund social programs and services.
But Statistics Canada data shows that productivity growth has slowed in recent years, before rising slightly at the start of this year.
But the narrative that Canada needs to boost productivity to pay for social programs isn’t the whole story, Ramze Rezaee says.
“I find that very troubling, because it brings up this idea of trickle-down economics — that if we just have enough growth or wealth, this will just somehow, naturally or inevitably, trickle down to all aspects of society,” Ramze Rezaee told The Tyee.
The director of policy and community action at Community Food Centres Canada and her colleague challenged how Ottawa talks about productivity in a piece published last month by the Canadian Centre for Policy Alternatives, or CCPA.
That’s why The Tyee sat down with Ramze Rezaee for a conversation about productivity — and what it really means for Canadians. The conversation has been edited for length and clarity.
The Tyee: You work with a non-profit that’s mostly focused on access to food. Why look at productivity?
Jasmine Ramze Rezaee: In any organization that does advocacy work, you really want to know who is in government and what their priorities are.
What became apparent to me after listening to the throne speech and analyzing the mandate letter was that this very conventional economic narrative around productivity was being used.
I thought it would be important for us, as an organization that is committed to improving the quality of life for all Canadians, to talk about it — because GDP doesn’t equate to well-being.
Frankly, I think we need to start really challenging their logic if we want to make our situation better. What we’re seeing in the past 40 years in Canada is that there’s a concentration of wealth at the top. There’s rising inequality. There is rising poverty.
We can’t wait for further economic growth to invest in our public infrastructure and in our income security measures today. There are people who are living in really undignified ways, struggling to afford their rent and struggling to afford food.
So this idea that we need to just work harder and grow the GDP, or that we need to invest more in research and development, is really curious and questionable to me.
The government measures productivity by comparing real GDP growth to labour, or hours worked. But what does this mean for a layperson?
It measures Canadians’ output per hour. Sometimes, it’s measured as GDP growth per capita, too — that’s the total economic output of a country divided by its population. When you participate in the economy, you derive a wage or a salary, and that contributes to the GDP of an economy. So the thinking is, if you work more or make more money, you are contributing more to the economy.
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But using GDP to measure productivity, that’s very tricky. The benefits of GDP growth are not equally shared. We’re seeing a greater concentration of wealth here in Canada, similar to the United States.
There are a lot of people engaging in our society, in lots of important forms of labour, that are not deriving a salary off of it.
Take a feminist critique of the GDP: there is a whole economy of unpaid caregiving, like caregiving for children or elderly or sick family members, that women engage in. It isn’t contributing to the GDP or any productivity statistic but clearly underwrites our economic system.
But that work is still helping buttress the foundations of our society and of our economic system.
This labour is a source of poverty and stress and joy for women but, again, it isn’t captured in conventional productivity metrics. It’s left out of the equation completely. So when we’re considering what actually builds a fair and inclusive society, we can’t just consider productivity growth.
This productivity metric and this idea that the GDP is lagging, it’s really just a part of a story that economists and policymakers use to bring about a narrative that we need to critique and consider.
Let’s talk about narrative. In your recent piece for the CCPA, you reference Mark Carney’s statement that Canada’s “weak productivity” undermines Canada’s ability to pay for social programs. How do you respond?
I don’t think it’s a very compelling narrative — it’s an incomplete story.
I’m not saying that productivity or GDP growth doesn’t matter at all. It’s a reality of our world and of our economic systems that GDP is something that politicians and political leaders should care about.
But this notion that our lagging productivity or lagging GDP growth is the reason why things are less affordable and is a reason why we can’t pay for social programs — that is absolutely a falsehood.
If we can find $9 billion to increase our defence spending, we can find funding for social programs. We choose not to. It’s a reflection of political priorities.
Canada is a very wealthy nation. If we decided to share our resources and wealth in a more equitable, fair and inclusive way, we could probably solve a lot of social issues. But it’s not a top priority for the government. I feel like social policy is really low on the agenda.
Why should it be higher?
Because people’s dignity and well-being shouldn’t be conditional on economic output. Social spending shouldn’t be treated as a luxury the government invests in when the numbers look a certain way.
It’s the core infrastructure of a just society. It stabilizes families, reduces inequality and helps ensure everyone has a roof over their head and enough food on their table.
Austerity in this moment of growing need will be devastating.
The Bank of Canada’s Carolyn Rogers in a speech last year said higher productivity means higher revenue for companies and thus higher wages for workers. The idea is that GDP growth helps workers. How would you respond to that?
We’re seeing inequality. People who have assets and investments are growing their wealth at a much faster rate than people who work for their money.
I’m not going to challenge or deny that productivity could result in higher wages. But what we do see in the labour market is that there’s a rise of people doing precarious gig work. There’s a rise of the working poor.
So I really question this idea that productivity is going to increase wages. It may, but for whom? Which segment of the labour market? Is it for the person who’s working minimum wage at the dollar store and has to work three jobs? Is it for the child-care worker?
I’m not denying that perhaps some people stand to benefit from greater productivity and GDP growth. But how is that wealth shared?
