Utility Marginality There are two main ways to increase the productivity of a labor force. Productivity is the amount of work that a workforce does -- the output per unit of labor (Riley, 2013). One way is to lower the denominator, which is to say have fewer workers. If the remaining workers work harder, the country can keep its output at the old level, while doing it with fewer workers. This will increase the productivity of the country's workforce.

The other main way to increase the country's productivity is to increase the numerator. This can be done through new technology, innovation, new machinery or anything else that helps improve the worker output. When output is increased and the number of workers stays the same, productivity increases. New innovations can also decrease the number of workers, if it replaces workers. If it replaces workers at the same time it increases production, all the better.

As a matter of public policy, increasing productivity probably involves making technology investments that will build the country's capabilities. China seeks technology transfer by becoming a manufacturing hub, for example. Brazil has focused on recent years on education as a means of improving productivity because often knowledge workers produce more than agricultural workers. The United States has seen increases in worker productivity fairly steadily as...

From a policy perspective, therefore, there are a number of options. A riskier but quicker option is to lay off worker in the public service and demand more productivity from the ones who remain.
2. Changes in technology can have a significant impact on the demand for labor. Many new technologies serve to reduce the demand for labor, because they replace people in the performance of menial tasks. However, this is not a universal relationship. For example, new technology often creates positions related to its use, development and maintenance. Where buggy drivers and horseshoe makers may have gone out of business with the invention of the car, jobs were created in the auto manufacturing business, to say nothing of selling and repairing cars, building roads and the entire petroleum industry. In a case like the car, there was far more demand for labor as a result of the innovation.

A new technology like the car is an innovation, which is a different class of new technology than some other developments. Innovative new technologies often create new industries and new positions, even as they destroy old ones. However, other new technologies are not as revolutionary. A less revolutionary new technology simply replaces an old one, but does not…