OpinionWhat ancient Chinese wisdom can tell us about bad bosses – and their effect on workers’ productivity
- Economists worry about low productivity because of its effect on financial and social stability, something that may have worsened during the pandemic
- While there are numerous contributing factors, not enough attention is paid to the effect bad managers have on workers’ engagement
Since the 1990s, advanced economies have been beset by low productivity growth, something that also afflicted developing countries following the global financial crisis of 2008. With the arrival of the coronavirus pandemic last year, things have only become worse.
Covid-19 lockdowns have weakened demand, investment, trade and contributed to loss of income. Companies are facing mounting debt and many are being closed. In addition, disruptions to education have had an adverse impact on human capital.
Low productivity is everyone’s concern. It determines income and output growth, and ultimately living standards. As Paul Krugman famously puts it, “A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker”.
Policymakers and economists also worry about low productivity because of its effect on financial stability, namely a higher debt-to-gross domestic product ratio, and social stability, as a result of less money to spend on social protection and addressing inequality.
In the face of this, much effort is expended on studying the causes of and solutions to low productivity.