stunned

Reading the BRW this week, I was stunned by economist Mark Wooden’s comments that he does not believe in skill shortages, and that if they do exist it is purely because business is not prepared to pay what the skilled people are worth (The Big Fix, August 7-13, 2008). Unfortunately, it confirms to me that economists do not appreciate or acknowledge the importance of demography in our economy and the subsequent failure to recognise the need for generational replacement of labour (total social production). We have a skill and labour shortage because we have not reproduced enough to replace our existing workforce. It is exacerbated by a strong economy.

Total social production expands on the economic theory of modes of production in which labour is required on a daily basis. Total social production argues that labour must be reproduced on both a daily and intergenerational basis.

Essentially, the concept of total social production is that neither production nor reproduction can take place in the absence of the other. Most economic analysts see demographic reproduction as secondary to economic activity. Such analysts are predominantly concerned with population in terms of labour force participation and the unemployment rate. However, total social production argues that economic production and demographic reproduction are mutually dependent. Total social production theorists argue that economic dependence reflects a general inability (or failure) to acknowledge and integrate the generational replacement of labour.

This failure has already affected, and will continue to affect, the future supply of labour. Hence, we have skill and labour shortages (or people shortages).