Thursday, April 05, 2007

Labour Boom = Falling Rate Of Profit

Go figure. Under capitalism an increase in labour, that is real productivity, means a real reduction in profit levels, a decline in surplus value, thus a falling rate of profit.

In other words more workers available means the economy is less productive than if you laid off workers and replaced them through technology or outsourcing. Go figure.

This is of course an analysis that is not based on the labour theory of value, but rather 20th Century Macroeconomics. And yet the mainstream economist outlines the essential truth of the Marxist critique of capitalism.

Last year's freakish growth disguised our falling productivity, said professor Ted Chambers of the Western Centre for Economic Research, University of Alberta. "Full-time employment rose by 7.6 per cent -- 114,000 jobs," he said.

If employment rose even faster than total output, then output-per-worker must have declined, Chambers explained.

"Provincial productivity numbers, released by Statistics Canada not long ago, showed Alberta at the bottom."

Productivity -- not GDP -- drives profits, incomes, and competitiveness.

The reason for the decline in 'productivity', is the decline in profits due to the increase in wages earned by the growing workforce.

Economy churns out 55,000 new jobs in March; unemployment holds at 6.1%

In the first quarter of the year, the agency estimated that employment grew by 158,000, the strongest first-quarter growth since 2002.

The booming job market has also resulted in Canadians earning more. Hourly wages rose 2.4 per cent during the first three months of this year, compared with last year, well in excess of the 1.6 per cent inflation rate.

Alberta's booming economy was mostly responsible for higher wages, rising 5.4 per cent in the first quarter of this year, from the same period in 2006.

The rise in March employment was led by women aged 25 years and older as adult women reached a new high in workforce participation at 59 per cent. In March, women in this age group captured over 39,000 of the new jobs created.

Over the past 12 months, adult women more than doubled their male counterparts in finding new jobs. Women over 55 also reached record levels of participation in the workforce, at 25.8 per cent.

By sector, employment growth in the services sector grew by 66,000 jobs in March, more than making up for the continuing weakness in Canada's beleaguered manufacturing.

Employment in trade grew by 27,000, with Alberta registering almost half the gains. The agency said the strength in this sector in March reflects gains in wholesale trade as a result of increased activity following February's CN strike.

Canada's labour force participation, the proportion of adult Canadians that have jobs or are actively looking for one, has jumped 0.6 per cent since last October and now stands at 67.7 per cent.


Productivity Myth

Canadian Workers Poorer Today Than Yesterday

Variable Capital

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