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Productivity and the division of labour
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Productivity is how much is produced from each unit of a resource. Specialising can raise it a lot.
What productivity is
Productivity is output per unit of input, such as output per worker per hour.
Higher productivity means more output from the same resources, which lowers costs.
Higher productivity means more output from the same resources, which lowers costs.
Raising productivity
Land: fertiliser, drainage, irrigation and land reclamation.
Labour: better quality workers through education and training (human capital); migration can bring skills.
Capital: more capital per worker and technological advances.
Labour: better quality workers through education and training (human capital); migration can bring skills.
Capital: more capital per worker and technological advances.
Division of labour
Division of labour means splitting production into separate tasks, with each worker specialising in one.
Advantages: workers become skilled and fast; less time moving between tasks; easier training; higher output.
Disadvantages: work becomes boring and repetitive; workers have narrow skills; one hold-up stops the whole line.
Advantages: workers become skilled and fast; less time moving between tasks; easier training; higher output.
Disadvantages: work becomes boring and repetitive; workers have narrow skills; one hold-up stops the whole line.
Five workers make 400 shirts a day. After reorganising tasks, they make 500. What is productivity per worker before and after?
- Before: 400 ÷ 5 = 80
- After: 500 ÷ 5 = 100
Answer: 80 rising to 100 shirts per worker per day
Productivity is output per unit of input. Raise it through better land, education and training (human capital) and more and better capital. Division of labour raises output but can make work boring.
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