The Nobel laureate in economics Paul Krugman very well described the importance of an economic variable that is fundamental, although it may be unknown to most citizens. "Productivity is not everything, but in the long run, it is almost everything," he said. The fact is that growing is one thing, and progressing or prospering is another. Or, more simply, volume or quantity is one thing – gross domestic product (GDP) is increasing and in Catalonia it has already exceeded 300 billion euros – and quality is another, that is, how this pie is distributed among all those who live in a given economy.
TheFènix report, presented by a group of top-level Catalan economists, focuses on one of the problems, if not the main one, affecting the Catalan economy: the high weight of economic activities based on low wages and which benefit from what a smaller part with a higher added value per worker contributes to the whole. The reality is that an apparent positive figure like GDP growth, which measures economic activity in a territory over a year, has risen, but if calculated per inhabitant (which measures the growth of productivity and the general wealth of the population), it has stagnated or fallen, because the population has increased at a greater rate.
The symptom has been detected by many other studies, and the Círculo de Economía even created a working group to analyze possible solutions. The economists in the report presented this Friday warn that "in some cases, Catalonia has undergone a process of relative specialization towards low-productivity sectors." And this, despite the progress in the overall figures, means that per capita wealth is not increasing. In fact, the richest countries with the highest levels of social welfare are also among the most productive in the world. The authors of the report propose some solutions, such as reducing tax advantages for sectors like tourism.
The fact is that, since the day has 24 hours –a variable that cannot be changed–, an economy, a company or a territory are more productive the less capital and labor they require. And that is why we need the maximum number of companies dedicated to higher value-added activities, which invest in productive improvements and innovation. But this must be accompanied by a training level –also continuous education and retraining–, public infrastructure, and a legal regulation and security that promotes business activity. That is why it is very important to have public budgets with sufficient resources to establish a climate that fosters productivity.
In Catalonia, there has been a duality in the labor market. On the one hand, as the report states, a part in "high productivity sectors", such as the chemical and pharmaceutical industries, telecommunications, scientific research or professional services, with high salaries. And, on the other hand, a segment that has grown much more with "low productivity sectors", such as "the food products industry, auxiliary services and hospitality". There are some signs that the model is changing, but it must be accelerated because more value per individual, meaning more productivity, generates higher wages and ensures the sustainability of the welfare state.
