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Thread: We need to be more productive as a nation

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    Politics.ie Newbie junketman's Avatar
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    Default We need to be more productive as a nation

    There has been a lot of talk about competitiveness and our loss of competitiveness in terms of labour costs. Yes that is a factor.

    But as a people we are also declining in productivity and in front line manufacturing/production. We are moving more towards a services based economy and producing less and less.

    We need to churn out more engineers, scientists etc and less people in services who merely ride on the backs of the producers in our economy.

    I work for a multinational corporation and am involved in front line production of software. In our company maybe 10% of the workers produce something. The other 90% who work with us are involved in services such as catering, security, finance, hr and management. It is often the people in services who earn the most money. It is the same across the economy, too many people not producing anything yet getting paid far too much. With so few people producing anything, the whole eoncomy will remain weak.

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    it's too late

    ye had your chance and ye blew it

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    Politics.ie Member 20000miles's Avatar
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    You've committed the typical Classical economics fallacy of thinking that only material goods constitute wealth.

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    Quote Originally Posted by 20000miles View Post
    You've committed the typical Classical economics fallacy of thinking that only material goods constitute wealth.
    It seems to be a very popular mistake.

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    Quote Originally Posted by junketman View Post
    There has been a lot of talk about competitiveness and our loss of competitiveness in terms of labour costs. Yes that is a factor.

    But as a people we are also declining in productivity and in front line manufacturing/production. We are moving more towards a services based economy and producing less and less.

    We need to churn out more engineers, scientists etc and less people in services who merely ride on the backs of the producers in our economy.

    I work for a multinational corporation and am involved in front line production of software. In our company maybe 10% of the workers produce something. The other 90% who work with us are involved in services such as catering, security, finance, hr and management. It is often the people in services who earn the most money. It is the same across the economy, too many people not producing anything yet getting paid far too much. With so few people producing anything, the whole eoncomy will remain weak.
    It helps the economy to have large numbers of technical graduates in science and engineering as some of them will make a huge contribution through their creativity and business ventures. But many jobs in science and engineering are unchallenging and pay badly. The surest career path is to manage these people and rise in the ranks of a multinational through acquiring an MBA.

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    Politics.ie Newbie junketman's Avatar
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    The only true way to prosperity as the Chinese are now finding is through having a substantial balance of trade surplus, which means you are bringing more wealth and money into the country than is going out, its a fundamental (objective not my subjective opinion) rule of economics, inarguable, only perhaps by economic illiterates.

    If Ireland produces less for export and imports more we become less and less prosperous as a nation, a fact of life.

    You cannot export what lawyers in the Four Courts do, you cannot really export what doctors do, what nurses do, what HR people do, what recruitment people do, even what retailers do. These are all largely in services. Fair enough up to a few years ago the hotel industry was flying and so helped our balance of payments but now with the downturn, our balance of payments will suffer in that department too.

    If we don't produce and export we will suffer. We must produce and export more and grow the export market whatever way we can, that will be the first step out of our recession.

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    We partied on borrowed money, now we're broke and third division, (like Leeds United).

    We were more productive when we made boats and butter churns, stools, saddles and candles. I don't know how we can be more productive when we don't make anything.

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    Quote Originally Posted by junketman View Post
    The only true way to prosperity as the Chinese are now finding is through having a substantial balance of trade surplus, which means you are bringing more wealth and money into the country than is going out, its a fundamental (objective not my subjective opinion) rule of economics, inarguable, only perhaps by economic illiterates.

    If Ireland produces less for export and imports more we become less and less prosperous as a nation, a fact of life.

    You cannot export what lawyers in the Four Courts do, you cannot really export what doctors do, what nurses do, what HR people do, what recruitment people do, even what retailers do. These are all largely in services. Fair enough up to a few years ago the hotel industry was flying and so helped our balance of payments but now with the downturn, our balance of payments will suffer in that department too.

    If we don't produce and export we will suffer. We must produce and export more and grow the export market whatever way we can, that will be the first step out of our recession.
    Without doubt, If we don't get our act together and reduce the cost of regulating our economy relative to what we export, we are going to be some basket case in five years time. We are borrowing to pay staff in local and central Gov, staff on Quangos, etc and at the end of the day we pay for this imbalance by reducing the wealth built up or increasing exports ( alternatively we cut the blazes out of State Staff costs by say 30% !)

    Michael Moloney MCC (Indep) Laois CC

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    Politics.ie Member carlovian's Avatar
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    Junketman et al, can i recommened a book "Bad Money" by Kevin Phillips which makes a similar point your making on the US economy.

    It traces the transfer from manufacturing (productive) to financial (non-productive) over the last 30 years in the us economy, which culminated in the production of sub-prime products which led us to our current mess.

    Dont agree with your points on doctors not producing but your analysis is spot on if you consider the percent of the economy which we dedicated to the housing market and support services.

    Im not saying that estate agents and lawyers arent producing but....................
    I believe that children are the future

    Unless we stop them now.

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    Politics.ie Newbie junketman's Avatar
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    Quote Originally Posted by patslatt View Post
    It helps the economy to have large numbers of technical graduates in science and engineering as some of them will make a huge contribution through their creativity and business ventures. But many jobs in science and engineering are unchallenging and pay badly. The surest career path is to manage these people and rise in the ranks of a multinational through acquiring an MBA.
    Yep Pat I agree with you about the unchallenging and badly paid part...Unfortunately todays school leavers and graduates dont want to start on 20 or 25,000 a year actually producing something of value for export. They want to start at the top in non productive jobs such as recruitment, law, etc which adds no real value to the country other than being a service. They want to start on 40,000 a year and get 10% increases annually and bonuses. It's unsustainable that most of our graduates today earn big money and don't actually contribute much of value to the nation. We don't need services entrepreneurs, we need engineering and scientific entrepreneurs who will come up with the next big technological advancement. Anyone who doesn't produce something which improves our balance of payments or brings money into the country is of no real value to this country. And unfortunately these people who are of no real value are often the ones who cost the most to pay, such as those in the Public Sector, who again don't export anything.

    So more graduates in software, engineering and science is what we need and that's what helped create the Celtic Tiger, and less in the services professions. I think it was a major mistake of our government to stop giving the bonus points for honours maths in the leaving cert, there is no incentive any more to be good at maths in the Leaving Cert.

    Part of the National Recovery Program must be producing more of the type of graduates I mention as well as retraining those out of work in these professions, so we start producing something again in this country.
    Last edited by junketman; 30th January 2009 at 12:36 PM.

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