The Efficiency Of Inefficiency

One of many things that stuck with me over the years since leaving Thailand to be a travel vlogger is the difference between Thailand’s inefficient efficiency and America’s efficient efficiency.

Another word, in this case, for efficiency is productivity. Productivity is about work. The Thai work system is highly inefficient and very effective. The U.S. system is highly efficient and very effective.

Unemployment And (In)efficiency

Thailand’s pre-COVID-19 unemployment rate was 0.75%. No, I’m not confusing decimals and percentages. The Thai unemployment rate was ¾ of 1%. This is normal for Thailand.

To put this in perspective, since 1999, the U.S. unemployment rate has bounced between 9 and 4%. Australia’s was between 11 and 4.25% and Korea 7 and 3%.

What’s So Special About Thailand?

Why is Thailand‘s rate so low? Before becoming a remote worker, I lived and worked in Bangkok for two years. I learned what drives Thailand’s efficiency. It’s driven by inefficiency.

America Is Efficient

America prides itself on its efficiency (productivity) at work. It should. The U.S. has the 5th most productive workers in the world. In the most efficient country, Luxembourg, the average worker adds $93.4 per hour to the country’s GDP. U.S. workers add $68.30. Thai workers contribute only $8.5 per hour to their GDP, but virtually everyone in Thailand is working.

The most efficient countries are not surprisingly the most technologically advanced countries.

Efficiency Through Inefficiency – The Bangkok Transit System

How does inefficiency drive an economy? Through employment.

The Bangkok Transit System (BTS) or Skytrain is an efficient, modern, fast, on time, clean rail system speeding above the streets of Bangkok. Even over 50 travelers can figure it out. I used it every day.

What’s not efficient, modern, nor fast is obtaining a ticket. The ticket machines only take coins. There are no change machines. Thus, if you find yourself with only bills or not enough change, you must go to the counter for change. The staff is happy to do this. Making change appears to be their primary job.

This means that each entrance to the BTS must be staffed. Because of this coin-only, no-change-machines policy, the BTS staff are busy. This system is thoroughly inefficient. It drives travelers crazy.

The BTS has 52 stations with more planned. Each station has multiple entry points. Some stations have two entrances other stations have ten or more. Hundreds of jobs could be eliminated if the Bangkok Mass Transit Authority (BMTA) purchased and installed change machines. However, by being technologically inefficient, the BMTA employs more people.

Inefficient Brooms

The streets of Bangkok are clean. Clean of both litter and the endless fall of leaves. An army of sweepers accomplishes this—real people with straw brooms.

I’ve spent time watching these sweepers. It’s a slow, laborious process. It’s thoroughly inefficient. I imagine one person with a leaf blower could replace 30+ people with a broom. I’ve never seen a leaf blower in Thailand. Come to think of it, I’ve never seen a street cleaning truck either.

I can’t recall the last time I saw a broom outside a house in the U.S. Are outdoor brooms stills sold in the U.S.?

I wonder how they decide which person gets the leaf blower and which 29 people get laid off?

Machines More Efficient Than People?

One could think paying thousands of sweepers and hundreds of BTS change-makers might cost more than purchasing a few leaf blowers or change machines. Maybe.

But more employees also means more tax revenue. A company pays a small tax, once, when it purchases a leaf blower. An employee pays much more in tax and pays tax for 30 years.

Additionally, If “everyone” is employed there’s not much being spent on unemployment benefits and programs.

Thailand beats the efficient technology trap through

• Less expense on equipment
• Less expense on energy
• High employment
• Lower unemployment benefits

The BMTA has not purchased change machines at the cost of millions of dollars nor paid for installation, maintenance, repair, and later pay millions more to replace the machines. Thai property managers spend cents for a broom instead of hundreds of dollars on leaf blowers and no money on electricity or gas. These costs add up and offset the cost of employees.

The Problem With Efficiency

Moreover, technology does not replace employees. This is painfully obvious at the self-checkout in grocery stores. I used one. I used it to reduce the number of people the checker would be exposed to during the Covid-19 pandemic.

It went great until it came time to pay. The machine did not accept my card. I waited for help. I waited quite a while because the employee assigned to the self-checkout was helping everyone with their “self” checkout. Really, two or three employees were needed. We could not get the card working. I took the bags to a checker. The checker rang everything up again. My card worked.

I tried “self” checkout again with my son. We had to call an employee twice.

Is this actually more efficient? After buying these expensive machines plus paying to have them installed then hiring an employee to help customers use them, is the store really saving money?

Add in customer frustration, loss from mistakes, as well as outright theft, then maybe staffing those empty in-person checkout stands is better for everyone. It’s undoubtedly faster for the customer.

Maybe One Is Better?

There are many ways to create a robust economy. In the U.S., it’s done almost exclusively through efficiency. This sounds great until you are one of the laid-off sweepers, change-makers, or supermarket checkers. In Thailand, it’s done through inefficiency, which results in consistent full employment.

If you read my blog, you know I drive home the fact that one system is not necessarily better than another it’s just different. But surely in economics one system is better than the other. Economics is, after all, measurable. I’m not qualified to make this judgement. I was educated in the U.S. university system, which, in business and economics, preaches efficiency and focuses on financial gain for the organization. But an organization is just part of an economy, and there is more to an economy than just finances. There is the big picture and how all components are connected, this includes people. Maybe people are important too?