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LabourLabour is just another name for work effort, or the amount of human resources used in production. It includes all types of workers with all sorts of skill levels, from farm labourers to trades people to doctors and office workers. The amount of labour that's used by an industry can be increased by either hiring more workers or boosting the number of hours worked by people who are already on the payroll. Labour forceThe labour force includes everybody aged 15 and over who is either working or looking for work. The number of people in the labour force is always greater than the number of people with jobs, because there will always be some people who are between jobs. Most of the time, we use employment statistics in this resource, but in some cases we've used data on the size of the labour force. Labour incomeLabour income includes wages earned by workers, as well as the benefits paid by their employers. Labour income is one of the biggest components of GDP, accounting for about two-thirds of the total value added in the economy. Measuring GDPGDP is calculated as the difference between the value of an industry's total output and the cost of the materials, supplies and services consumed in production. Using the mill working example again, let's suppose that each door produced by the factory is sold to the building supply store for $300. The cost of the door includes:
The remaining $25 represents the profits of the factory owner. In this case, the value added resulting from the production of each door would be equal to the cost of the door ($300) minus the cost of materials and supplies, energy and purchased services ($110+$35), or $155. GDP usually includes more than just labour and profits, but we've simplified things a little in this example. GDP is a measure of the value added to the materials or services purchased by the industry
 Figure 1 It's important to note that the mill working factory's contribution to GDP only includes the value of the work that was added to the raw materials purchased to make the door. Other industries produced the wood, glue, varnish, fuel and other supplies and services used in production and the value of the work they did is attributed to them, not to the mill working industry. In other words, at each stage of production, GDP only counts the value of the work done by one industry. The new economy: tourism and high techTourism and high-tech are part of what's often called the new economy. Firms in these sectors don't belong to a single industry or group of industries. They produce many different types of goods and services, and thus span a number of different industries. In the case of tourism, the element that ties them together is the clients that they serve. In the high tech sector, it's the degree to which the goods and services they produce could be considered high tech products. Because their products are so diverse, tourism and high tech aren't included in the standard industry definitions used in NAICS. We measure the size of the tourism and high tech sectors by attributing part of the output of other industries to these special groupings. For example, some, but not all, of the output of the food and beverage service industry is attributed to tourism. The work that's been done in this area is fairly recent, and there's still some discussion about what should be included in tourism and high tech. At present there's not a lot of data that's based on these special groupings. This Guide mainly be discusses goods and service industries, using NAICS definitions, although some information on the tourism and high tech sectors is also included. High techBC's high tech sector includes a portion (which varies by industry) of the activities of firms in a variety of manufacturing and service industries, which produce electronic equipment, robotics, computer consulting services, and other goods and services that involve a high degree of research and development activity. TourismThe tourism sector includes some of the activities of a variety of industries that produce services used by tourists. A percentage of the total value of production in accommodation, food services, transportation and selected other industries is attributed to tourism. OccupationsEach industry or sector in the economy employs people in a variety of different occupations. Types of jobs are classified based on the amount of skill or training needed to do them, as well as on the specific characteristics of the job. For example, people working in building trades might have the same amount of training or skills as office workers, but because their jobs are so different, they are classified into different occupational groups. You'll find an explanation of how occupations are classified, and what's included in the various classifications, in Appendix 3. Primary industriesThese are industries that involve the harvesting or extraction of natural resources. Fishing, logging, mining and agriculture are all considered primary industries. Production and outputThe value or amount of a good or service that's produced by a company or an industry is usually referred to as the industry's production or its output. For example, the output of a mill working factory that makes wooden doors could be measured in terms of either the number of doors produced, or the total dollar value of its products. It's important to note that output doesn't just include goods. Services like transportation, accounting, legal advice, and health care also contribute to the economy's total output. ProductivityProductivity can be described as a measure of the overall efficiency of the economy. Productivity improvements can be due to advances in technology, or to more efficient use of labour or capital inputs. Using our mill working example, suppose that the factory employs two people. Each of them saws the wood, nails or glues it together, then sands and varnishes or paints the finished product. Suppose further that the workers discover that if one of them does all the sawing, nailing and gluing, while the other one does the sanding and varnishing, they can produce one extra door per day. The amount of capital and labour used in the factory hasn't changed, but because the labour is being used more efficiently, the factory's output has increased. The growth in this case is due to increased labour productivity. Labour productivity can be calculated as the ratio of GDP to total labour input (measured by employment). Some of the graphs in this resource show indices (defined below) of GDP and employment. The gap between these indices can be viewed as a rough measure of changes in labour productivity. Labour productivity measures assume that all of the economic growth that is not accounted for by increased use of labour is the result of more efficient use of labour. This may not always be the case, since economic growth might also be due to more efficient use of capital, but there is no way to easily distinguish between the two. That's why labour productivity is often used instead of total factor productivity, which is a more accurate measure of productivity change, but much more difficult to calculate. It should be noted that labour productivity differences among industries may simply reflect differences in the relative importance of labour and capital inputs. For example, GDP per worker in the electricity industry, which relies mainly on dams and generating equipment to produce power, is high because most of the value added to the economy comes from the use of capital equipment. In this case, the ratio of GDP to employment includes the value added by this equipment as well as the value added by the worker's efforts. In other industries, such as personal services, the value that's added to the economy comes mainly from the use of labour. GDP per worker in these industries tends to be lower than in industries that use a lot of capital equipment, since labour is usually the only source of economic growth. Measuring labour inputLabour input is sometimes measured using employment, although a better measure would be based on the total number of hours worked in an industry. Labour productivity measures that are based on employment will be lower in industries where there are a lot of part-time workers, since simple job counts don't reflect the fact that not all workers spend the same amount of time on the job. Even if part-time workers are just as efficient as full-time employees, the value added per worker in an industry where there are a lot of part-time jobs will be lower than in an industry with mainly full-time workers, because differences in the actual amount of work done by each employee have not been taken into account. The production processThe production process is simply a term that's used to describes how an industry's final product is created. In the mill working example, the production process would include the following activities:
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The role of resource industries is declining. They
currently employ about 9% of
British
Columbia's workforce.
