Productivity?

When wages slump for most people's jobs then in an age of austerity we hear the clarion call of  "productivity" being broadcast as the key to the increase of people's income. Productivity and creativity exists outside of paid work, but is invisible, therefore excluded from the conventional audit when it comes to calculating what is called the gross domestic product, the GDP, the total value of goods produced and services provided in a country during one year.

Ever since governments first began to track GDP, measures of economic output have typically only looked at strictly economic transactions, i.e. that where products and services are bought and sold for money. The primary methods of GDP measurement use income and expenditure to determine GDP. These methods necessarily leave out unpaid work, most prominently homemaking.

Critiques of this system first emerged in feminist discourses, which argued that "homemaking" and other activities referred to by sociologists as "social reproduction" are foundational to all other economic activities. Care of the elderly and people with disability for example.

The Department of Health last week made home care for the elderly a priority, after Brendan Courtney’s documentary We Need To Talk About Dad was broadcast.Deputy O’Dea said: “State policy is elderly and infirm people should be catered for, in so far as possible, in the comfort and security of their own homes.“At present, if this is not an option and additional support is needed, two options are available – the State, or the family, provides support in the home or in a nursing home.“My Bill will open up the option to the HSE to provide home help care to patients as long as the total cost is less than what it would cost to provide nursing home care.”The legislation will be available to those who qualify for the Fair Deal scheme and will allow the HSE to give families the choice of home or nursing home care for the first time.However, Mr O’Dea admitted the proposal was a “stopgap”, with a wider statutory system for homecare needed to address Ireland’s rapidly ageing population.He added: “The statistics are frightening. The proportion of the population that will consist of people over the age of 65 is increasing dramatically.“It will go up to one in six of the population by 2040 as I understand it.“Statistics show between now and 2026, seven extra elderly people every day will require care, either in a nursing home or in their own homes.“It really is the start of tsunami. It’s going to cost the State a lot of money, whatever we do. We want to ensure we get the best value for the money we spend.“Looking after somebody at home will cost the State on average, about one third to a quarter of what a residential place would cost.“Also the vast majority of people would prefer to be looked after in the safety and security of their own homes, and their families would support them with that, financially and otherwise, if a proper package can be put in place.”Mr O’Dea declined to say if he was in favour of a new charge to cover the proposals.

Excluding from GDP unpaid labour performed primarily by women devalues women. This invisible "productivity", that such "non-market household production" accounts for,  represents a significant portion of output in the developed world.

Lack of capital investment in productive power is what results in poor productivity, not the lack of human activity. Let those who measure productivity on the bottom line take the failure of capital to invest. The trouble is capital is not interested in society only maximising profit as a result of investments.

"Productivity isn’t everything", observed the Nobel laureate Paul Krugman, "but in the long run it is almost everything."

Paul Krugman has come up with a term leprechaun economics, so named because Ireland is the ultimate example of a country where national income is much less than GDP, because of the behaviour of foreign corporations that fundamentally distorts any analysis of national income.

The Central Statistics Office (CSO) aims to remove the “leprechaun” from Irish economics with a modified measure of economic growth that adjusts for the distorting effects of multinationals.

In response to the furore over Ireland’s recent economic growth numbers, the agency has developed a new indicator – gross national income* (GNI*) – which will better capture the true level of growth in the domestic economy by stripping out the profits associated with so called “redomiciled PLCs”.

The new barometer will be published annually alongside the standard, internationally agreed indicators of gross domestic product (GDP) and gross national product (GNP).

The move comes in the wake of the revised 26 per cent growth in Irish GDP for 2015, derided by US economist Paul Krugman as “leprechaun economics”.

That leap in GDP was underpinned by the relocation of €300 billion in capital assets to Ireland by multinationals – mainly in the form of intellectual property.

The massive transfer of assets here came amid a global clampdown on multinational tax avoidance.

Over 1,000 FDI giants in ICT, Social Media, Pharmaceuticals and Finance have made Ireland the hub of their European operations, with names such as Google, HP, Apple, IBM, Facebook, Linkedin, Twitter, Pfizer, GSK and Genzyme.

Q. Why? 

A. To avoid paying tax and contributing to the wider society?

$15bn for the Irish taxpayer?

The European Commission claims that Apple owes 13 billion euros in unpaid taxation for operations between 2003 and 2014. It is alleged that the low tax rate proffered to Apple was an exclusive rate not given to other companies and therefore illegal.
Ireland refutes these claims, saying that the rates had been available to all, and it does not believe there were any violations of Irish or European law. Today, the EU also ordered Amazon to pay up 250 million euros in supposed illegal taxes.
Apple’s general counsel Bruce Sewell said that Apple was targeted to generate headlines. It said that the chosen legalese was selected to maximize the fine. If a more appropriate categorization had been chosen, Apple would still have disputed the claims but the headline figure would have been far less, much lower than the current 13 billion euro ruling.
It is believed that the United States government are now intervening in proceedings. The legal case is not expected to start until next year. Before that happens, the Commission wants Apple to refund Ireland the money to ‘make it fair’ on other companies. If the appeal was successful, the money would be returned to Apple.