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Low-pay jobs help no one
When workers get paid well and spend earnings on goods and services, the impact on economic growth is positive.

It is not desirable, the Jamaica Productivity Institute (JPI) states, for a significant proportion of the labour force to be employed in low income and low productivity jobs.

Low income earners that spend a high proportion of this income on food and transport is that it leads to a lower propensity to save. This will affect the ability of financial institutions to provide reasonably priced funding to owners of existing and new businesses.

The types of jobs which provide the best spin-offs for economic growth are technology and innovation and knowledge-based jobs.

According to researchers and Dr. Charles Douglas, executive director of the he Jamaica Productivity Institute (JPI) and Alrick Campbell of the productivity specialist research unit, GDP growth is driven largely by growth in total factor productivity (TFP) where TFP represents the growth in GDP which is not explained by the contribution of labour and capital.

In other words, TFP is a residual that is influenced by the application of technology and innovations; organizational arrangements; environmental circumstances; skills, training and attitudes; policies and institutions.
In general, 60-70 percent of the growth in GDP is the result of TFP the researchers note.

It follows therefore, that the types of jobs with the best prospects for economic growth are those, which enhance TFP.

Examples of these jobs include research and development required to adapt advanced technology; information communication technology; engineering (chemical, electrical, processes, etc), organizational design and management; financial experts; policy analysts; among others.
Still, it might be better to have numerous low income jobs than to have high unemployment.

Whatever workers are paid, it will also positively impact total factor productivity, as employed persons are less likely to be involved in criminal activities.

The JPI point out that jobs in agriculture are typically low-income jobs, but the sector has experienced one of the highest growth rates since the effect of the global recession first started in 2008.

Using 1996 prices, in 2007, the average worker in the agriculture sector earned around J$28, 231 representing only 26 percent of what the average working Jamaican earns. However, the recent growth in the sector has minimized the overall impact of the economic crisis on the economy.

With high productivity levels, businesses are able to pass on productivity increases in the form of lower prices for goods and services to consumers and higher wages to employees. This increases consumerís purchasing power, stimulates further demand and creates new employment opportunities.

*avia.collinder@gleanerjm.com
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