Emerging economy that has a low labor productivity - Essay Example

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Every nation as such lays the ground to ensure that its population has a production that meets its entire consumer demands and still have more to export to newer markets. However, this is always not the case as the rate…
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Emerging economy that has a low labor productivity
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Emerging Economies and Labour Productivity al affiliation Introduction Every country looks forward to a better and stable economy. Every nation as such lays the ground to ensure that its population has a production that meets its entire consumer demands and still have more to export to newer markets. However, this is always not the case as the rate of production may not be met as planned because of low productivity of its labor force. The rate of production per hour is affected because of many causes that if well addressed may lead to a better and more stable economy. Therefore, it is in the interest of this paper to identify an emerging economy specifically and discuss the main causal factors for low labor productivity.
There are many ways one can use to measure labor productivity. These range from the infrastructural capital, advanced technology through human capital. This paper is however concerned with human capital which is crucial in determining the productivity of the labor forces. The term labor productivity may be understood in the context of the total output per employee within a set timeframe. For instance, we can say the total production for every worker per day or per hour. As said before, some factors determine the productivity of the labor forces.
Initially, Brazil has been growing economically since its independence. Brazil had hit a high output for every worker in early years of between 1960 and 1970s. In the years that followed from 1990 to early 2013, the production per workers contributed to over forty percent of its GDP. However, the trend is not the same in current years as there are factors that are contributing to its continued low labor productivity. Factors such as poor company management have been blamed for the current low productivity in Brazil (Baer, 2001). Despite most of the corporations in Brazil being well run, they are not managed efficiently leading to reduced productivity.
Another factor is high taxes that make it hard for companies to employ a good number of trained and skilled employees. As a result, business owners resort to hiring less-qualified relatives at the expense of running their firms with well trained and adequately skilled personnel. This significantly affects labor productivity as poor skills cannot efficiently produce a great part of the total expected output. One of the motives for employing unqualified family members and relatives is to reduce the possibility of being sued for lack of the observance of labor laws (Baer, 2001). Further, other than the preceding, companies are protected by the government making it hard to face completion from other firms. Consequently, employees are made to work with unfavorable conditions a factor that undoubtedly affects their productivity rates. In addition to the preceding, local investors are restricted from acquiring new and more efficient technology that may help speed up production without interfering with the labor force (Baer, 2001). With such kind of inadequate technology, even if the employers applied their fewer skills in an effort to maximize productivity, their output would be hampered.
Lastly, the education system in Brazil is one of the poorest in the continent. The workforce is not properly trained. It was noted that a middle-aged Brazilian worker can only be compared with a fourteen-year-old teen in the United States in terms of skills. This is a crucial factor that needs to be addressed lest the entire country plunges into productivity problems that it would never come out of. Too much government regulation too, needs to be moderated and markets need to be liberalized to make it a free market open to the competition.
In conclusion, it is important if the issues raised above are addressed independently and then merged because they are variables that in the long-run, determine labor productivity. Taxes, education, professionalism, and technology are always crucial in economies.
Baer, Werner (2001). The Brazilian Economy: Growth and Development (5th ed.). Westport, CT: Praeger. Read More
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