Difference between production and employment

This nation’s official watchwords are “Discipline, Production, Tolerance”. They are not “Discipline, Employment, Tolerance”. We make this point because the Government seems to be glossing over the difference between production and employment. Such glossing was seen in Prime Minister Patrick Manning’s New Year’s message, where he declared himself “optimistic” that Trinidad and Tobago would have full employment by the end of 2006. But, if that is the Government’s goal, it does not necessarily bode well for the economic management of the country. Full employment is a favourite fetish of governments. It impresses voters when politicians can quote statistics proving that jobs have been created. However, there seems to be something amiss with the employment figures at present being touted — now down to about eight percent. If this is true, then it should mean that the poverty figure — somewhere around 24 percent according to the last major study submitted in 2004 — has to be lower.

On the other hand, if the under-15 proportion of the population has grown, we can have low unemployment and high poverty. The last official figures, for 2002, place the under-15 population at about 25 percent. Unfortunately, much of the statistics from the 2000 census are still being processed by the Central Statistical Office, so official policy remains uninformed by the real demography of the country. This, however, does not change the fact that, as a political goal, full employment can distort a country’s economy in a way that impacts with especial harshness on the poor. The economic goal of any nation is to get the greatest results with the least effort. That is what technology does — it reduces the need for labour while increasing productivity. Put another way, a nation should strive to have full productivity.

Full employment is only the means to achieve this, not the goal itself. This means that full productivity will always mean full employment. However, the converse is not necessarily true — full employment does not necessarily mean full productivity. During the Second World War, for example, every nation involved had full employment. But, except in the manufacture of weapons, productivity in all areas declined. It is therefore foolish to speak about employment as though it bears no relation to productivity. The Manning administration has so far spent millions of dollars on the CEPEP programme, thus undoubtedly making an impact on unemployment. But has that programme created new wealth? Obviously not. And, even if we argue that “community enhancement” is a worthwhile goal in itself, can anyone truly say that the outlay on the CEPEP programme bears any relation to the work done?

In his New Year’s message, Mr Manning also made it clear that the Government would proceed with its multi-million-dollar waterfront project, government campus, and Tarouba sporting complex. These projects will also employ people but, save perhaps for the waterfront project, will not generate new wealth. And, since all this is being financed by oil and gas dollars, it means that full employment is going to be a temporary phenomenon, which will lead to even greater social dislocation when the boom inevitably busts. Perhaps it would be wise for the Government to think now about our national watchwords, if they wish to avoid that future fallout.