Low productivity blamed for poor recovery from recession.
Discussion
Johnnytheboy said:
crankedup said:
On my downside I would like to see less unskilled labour entering the U.K. less use of zero hours contracts, they have a place but are also being seen by some businesses as cheap labour only. A rise in the M.W. to the living wage. Government to remove 'in work benefits' from employee's working for Companies that could afford to pay higher wages.
This would improve productivity?
ralphrj said:
Johnnytheboy said:
I've kept reading this and I don't know what the answer is.
Is it related to the lower-than-expected redundancies in the depth of the recession?
i.e. companies kept on more people than analysis suggested they would and are now overmanned?
It is probably one of the reasons.Is it related to the lower-than-expected redundancies in the depth of the recession?
i.e. companies kept on more people than analysis suggested they would and are now overmanned?
There was a Bank of England report last year the looked into the issue of low productivity and came to the following conclusions:
1. reduced utilisation of workers - companies have avoided potential redundancies by spreading work around or by diverting staff from revenue raising activities to business development,
2. reduced capital investment - companies have held off investing in new production processes/plant & machinery,
3. higher firm survival - low interest rates, payment extensions (HMRC 'Time-to-Pay' scheme), bank forbearance (support given to companies to meet debt obligations) etc. helped to the scale of company liquidations seen in previous recessions,
4. impaired resource allocation - as less companies went under and unemployment was lower than expected other companies that were doing well were not able to recruit as many workers as they may have hoped.
MarshPhantom said:
Wouldn't much of the above also be true for our competitors who have also been through recession recently.
According to the BofE report similar falls in productivity followed by slow increases in productivity occurred in France, Germany, Italy and Norway but not in Spain or the US.In the case of Spain and the US this can be attributed to the higher unemployment rates (less work was done by less people so productivity remained the same whilst more people were out of work).
Moonhawk said:
If true - I do wonder whether part of whatever low productivity that does occur is simply down to the way companies treat staff.
This.You can only push people for so long to work harder, faster, better, smarter, before they think, hang on, this is all one-way. I have seen many people pushed to absorb the workload of others that have left the business, without any reward or even recognition of their efforts. After a while they say f
k it and resort back to 9-5. I think we are now way beyond that point.MarshPhantom said:
Report out today saying the economy is now doing great again (hard to believe I know), basically saying that everything would be golden if it wasn't for low productivity, which implies it's all the fault of lazy workers sitting on their arses when they should making stuff.
I find this hard to believe frankly, there can't be many firms out there who are unable to keep up with demand for their products.
Where does the truth lie?
Almost certainly in the collection of the statistics. The fact is GDP is a very difficult figure to calculate. I find this hard to believe frankly, there can't be many firms out there who are unable to keep up with demand for their products.
Where does the truth lie?
I have always believed UK GDP is underestimated because of the size of the financial sector. Measuring services in GDP is very difficult to do because they do not represent production in the same way a car or a TV does.
fblm said:
It's pretty obvious that the UK's economic 'performance' over the last decade is based on a rapidly increasing population. Your GDP per capita is lower than it was a decade ago which is hardly surprising given who you are importing. Immigration is a temporary and easy demographic fix to GDP which is going to bite you in the a55 in the long run, especially given your weird predisposition to welcome every uneducated peasant and criminal from third world warzones to come and live in a free house.
^^fblm said:
Your GDP per capita is lower than it was a decade ago which is hardly surprising given who you are importing.
2003 UK GDP per Capita £21,116.292013 UK GDP per Capita £22,126.99
Latest figures for GDP per Capita in constant local currency from the World Bank
Constant = adjusted to remove the impact of inflation
That is a 4.8% increase in real terms.
On the lunchtime news they had some stats showing that productivity in the UK was up to 30% lower than in the USA (perhaps not a surprise), Germany (OK - reasonable), and France (WTF?).
If any country cannot out perform the 2hr lunch/35hr week brigade there must be a systemic problem...tell me I'm wrong.
I imagine it's to do with investment in better kit as much as how many hours the workforce put in.
If any country cannot out perform the 2hr lunch/35hr week brigade there must be a systemic problem...tell me I'm wrong.
I imagine it's to do with investment in better kit as much as how many hours the workforce put in.
The Don of Croy said:
On the lunchtime news they had some stats showing that productivity in the UK was up to 30% lower than in the USA (perhaps not a surprise), Germany (OK - reasonable), and France (WTF?).
If any country cannot out perform the 2hr lunch/35hr week brigade there must be a systemic problem...tell me I'm wrong.
I imagine it's to do with investment in better kit as much as how many hours the workforce put in.
A lot of the time, when one digs deeper into comparative figures like this, it turns out the systems of measurement differ in various countries, which makes direct comparison meaningless. If any country cannot out perform the 2hr lunch/35hr week brigade there must be a systemic problem...tell me I'm wrong.
I imagine it's to do with investment in better kit as much as how many hours the workforce put in.
fblm said:
It's pretty obvious that the UK's economic 'performance' over the last decade is based on a rapidly increasing population. Your GDP per capita is lower than it was a decade ago which is hardly surprising given who you are importing. Immigration is a temporary and easy demographic fix to GDP which is going to bite you in the a55 in the long run, especially given your weird predisposition to welcome every uneducated peasant and criminal from third world warzones to come and live in a free house.
Errr... I got bitten in Prestatyn once, never again.The rest of your post is a bit racist like.
The Don of Croy said:
On the lunchtime news they had some stats showing that productivity in the UK was up to 30% lower than in the USA (perhaps not a surprise), Germany (OK - reasonable), and France (WTF?).
If any country cannot out perform the 2hr lunch/35hr week brigade there must be a systemic problem...tell me I'm wrong.
I imagine it's to do with investment in better kit as much as how many hours the workforce put in.
i think the emphasis placed on "management techniques" over training and investment in up to date capital equipment will always hinder uk manufacturing.If any country cannot out perform the 2hr lunch/35hr week brigade there must be a systemic problem...tell me I'm wrong.
I imagine it's to do with investment in better kit as much as how many hours the workforce put in.
as a nation we appear to be obsessed with becoming managers,who by and large should be used to facilitate the actual people making stuff,not treated as the be all and end all of a business. being able to do a nice presentation at the end of the month with lots of fancy spread sheets would appear to be more important than filling in a skills gap or making sure we at least have the equipment to compete with overseas competition.
we are very good at making stuff to a very high standard,and efficiently ,unfortunately the abilities of managers to manage this properly is lacking in many industries.
Moonhawk said:
If true - I do wonder whether part of whatever low productivity that does occur is simply down to the way companies treat staff.
I have seen staff members get great appraisals, undergo significant training, gain new qualifications - then leave the company because they can command better rates by moving companies.
Often a company will offer a better package to new staff members coming in from outside - rather than offer a similar package to the staff member already doing the job but who is choosing to leave because they don't feel they are getting adequate compensation or promotion reflecting their performance.
It's almost like the company has a "brand new customers only" attitude towards staff.
Why does productivity decrease in a mature marketI have seen staff members get great appraisals, undergo significant training, gain new qualifications - then leave the company because they can command better rates by moving companies.
Often a company will offer a better package to new staff members coming in from outside - rather than offer a similar package to the staff member already doing the job but who is choosing to leave because they don't feel they are getting adequate compensation or promotion reflecting their performance.
It's almost like the company has a "brand new customers only" attitude towards staff.
A brick later can only lay x amount of bricks per hour but year on year his salary increases so effectively productivity decreases
Same with hair cutting they can only cut x number per hour now to previously yet their salary is higher so productivity is perceived to have dropped.
Only very few types of work where processes have improved to such an extender to outstrip the effective labour rate increase can you have productivity increasing.
High level and for non economists its all too easy to tell joe public the story however dig into It and even joe Bloggs can understand the basic reasons why this happens.
Min wage increasing is a big contributor to effective lower productivity.
Discuss
. Know this will be a topical post so let's hear from you left leaning posters 
We are allowing low skilled labour to import itself, have average people working part-time, and skilled people doing unskilled work because they can't find skilled work.
It's a competitive market - what effect would companies "doing more, for the same payment" have on this? For example, you an your team always did your best and worked hard, but there is constant pressure to get better and do more from clients. So your company makes (or "encourages") each of you work 5 more hours per week unpaid, and doesn't charge the client for this. Amount of work done is more, total produced is more but nothing was paid for it (well you did, with your personal time). But productivity in the sense talked about would be the same I presume.
Also I see investment in machinery/tools etc. being talked about. In the software industry, these are evolving fast and many are free to use. So we get much more "customer value" produced per hour worked now than we did say 3 years ago. But it seems that this advantage is almost always to the customer's benefit - they now expect the same (or more) for less. The tools made more work possible in less time, but demand is the same, and now it requires less people to satisfy, so prices go down as people compete. I guess this is the purpose of the market to improve efficiency. So the people who work free in their spare time on these shiny and free open source software tools, are they good/bad/neutral for GDP/productivity? Leave aside that collectively they are making tools to make their jobs redundant, for free. I thing they are good for GDP only if demand is increasing. If we can satisfy the demand as we are now, making it cheaper to do so will reduce GDP. For productivity in this sense, I guess it's good if demand is increasing (we all still work, but get more done), and neutral if demand is stable (some of us lose our jobs, but the rest still get all the work done). That was a bit rambly.
It's a competitive market - what effect would companies "doing more, for the same payment" have on this? For example, you an your team always did your best and worked hard, but there is constant pressure to get better and do more from clients. So your company makes (or "encourages") each of you work 5 more hours per week unpaid, and doesn't charge the client for this. Amount of work done is more, total produced is more but nothing was paid for it (well you did, with your personal time). But productivity in the sense talked about would be the same I presume.
Also I see investment in machinery/tools etc. being talked about. In the software industry, these are evolving fast and many are free to use. So we get much more "customer value" produced per hour worked now than we did say 3 years ago. But it seems that this advantage is almost always to the customer's benefit - they now expect the same (or more) for less. The tools made more work possible in less time, but demand is the same, and now it requires less people to satisfy, so prices go down as people compete. I guess this is the purpose of the market to improve efficiency. So the people who work free in their spare time on these shiny and free open source software tools, are they good/bad/neutral for GDP/productivity? Leave aside that collectively they are making tools to make their jobs redundant, for free. I thing they are good for GDP only if demand is increasing. If we can satisfy the demand as we are now, making it cheaper to do so will reduce GDP. For productivity in this sense, I guess it's good if demand is increasing (we all still work, but get more done), and neutral if demand is stable (some of us lose our jobs, but the rest still get all the work done). That was a bit rambly.
What happens when all the jobs which were once needed are now automated and even professionals roles are automated?
We can have a situation whereby vast swathes of the population will become utterly obsolete from a working perspective. Ie x% of the population may be totally unable to retrain to do anything else - let's be frank some may be utterly unable to do anything else even if 16yo they have a glass ceiling of work they can do suddenly all the jobs they could do are fully automated..., what then?
Is this the utopia we desire? Is this where the state provided for all? If so who determines how much they get or does everyone then get exactly the same....
We can have a situation whereby vast swathes of the population will become utterly obsolete from a working perspective. Ie x% of the population may be totally unable to retrain to do anything else - let's be frank some may be utterly unable to do anything else even if 16yo they have a glass ceiling of work they can do suddenly all the jobs they could do are fully automated..., what then?
Is this the utopia we desire? Is this where the state provided for all? If so who determines how much they get or does everyone then get exactly the same....
Mobile Chicane said:
I heard this statement on R4 this morning and thought it utterly bizarre: how on earth does one measure 'productivity' in a largely service-based economy.
Not sure why that would seem difficult.ONS said:
Labour productivity measures the amount of real (inflation-adjusted) economic output that is produced by a unit of labour input (in terms of workers, jobs and hours worked)
ralphrj said:
fblm said:
Your GDP per capita is lower than it was a decade ago which is hardly surprising given who you are importing.
2003 UK GDP per Capita £21,116.292013 UK GDP per Capita £22,126.99
Latest figures for GDP per Capita in constant local currency from the World Bank
Constant = adjusted to remove the impact of inflation
That is a 4.8% increase in real terms.
FredClogs said:
The rest of your post is a bit racist like.
It makes sense to import skilled motivated workers that someone else paid to educate, like Eastern Europeans. It makes considerably less economic sense to import the uneducated fleeing poverty and war like Bangladeshi's and Somali's. It's not my fault if the later are darker. The obvious exception to the rule seems to be Indians because every single one that I know is much smarter and better qualified than me! The simple fact is your free for all immigration policy is importing poverty, your choice but calling the messenger racist ain't going to help.Edited by anonymous-user on Wednesday 4th March 21:01
fblm said:
It makes sense to import skilled motivated workers that someone else paid to educate, like Eastern Europeans. It makes considerably less economic sense to import the uneducated fleeing poverty and war like Bangladeshi's and Somali's. It's not my fault if the later are darker. The obvious exception to the rule seems to be Indians because every single one that I know is much smarter and better qualified than me! The simple fact is your free for all immigration policy is importing poverty, your choice but calling the messenger racist ain't going to help.
I see from your profile you live in Monaco, I'm not sure how you do things over there but over here we treat folks as we find them. There are some things more important in life than being good little productive ants, like not being a tEdited by fblm on Wednesday 4th March 21:01
t and not luxuriating in the good fortune of our birth happenstance. Why not go back to counting your tax free loot and leave Britain to the British?GDP per capita is not a measure of efficiency but merely a measure of the monetary value of what is produced.
This being the case a German worker who manufacturers 4x£100,000 Porsches a day is looked upon as more productive in these terms than a Nissan worker in the North East of England making 20 x £15,000 Jukes. Germany wins as one worker produces goods to the value of £400,000 as opposed to the English worker's £300,000. This would remain the case even if the Englishman's terms and conditions and factory running costs resulted in Nissan earning higher profits from their worker than Porsche earned from their's.
This being the case a German worker who manufacturers 4x£100,000 Porsches a day is looked upon as more productive in these terms than a Nissan worker in the North East of England making 20 x £15,000 Jukes. Germany wins as one worker produces goods to the value of £400,000 as opposed to the English worker's £300,000. This would remain the case even if the Englishman's terms and conditions and factory running costs resulted in Nissan earning higher profits from their worker than Porsche earned from their's.
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