Why is UK output per hour so low?

Generali

Cyberman60 wrote: »

The only reason you're talking about this is clutching at straws to bash UKPLC because there's so few reasons to bash the Coalition.

The reasons why we're down the league are obvious, and outside our control as all and sundry come to the UK to work for low pay. Our success economically is causing our failure immigration-wise and thus pushing us down the table. Simples !!

Well the BoE calls it a puzzle. The BBC calls it a productivity puzzle:

http://www.bbc.com/news/business-31602582

ACAS calls it a productivity puzzle:

http://www.acas.org.uk/media/pdf/o/8/The-UK-Productivity-Puzzle-is-employment-relations-the-missing-piece.pdf

The FT calls it a productivity puzzle:

http://www.ft.com/intl/cms/s/0/f0eb7394-2043-11e3-9a9a-00144feab7de.html?siteedition=intl#axzz3UxvwASSd

Yet when I call it a productivity puzzle it's because I'm anti-Coalition...? The last time I voted in the UK it was Tory, not that it's any of your business.

HAMISH_MCTAVISH

Generali wrote: »

Well the BoE calls it a puzzle. The BBC calls it a productivity puzzle:.

The USA has the best productivity on that chart.

Not surprising, when in most states, you can hire and fire at will.

Literally an employee can show up for work, be told "you're fired", and get escorted off the premises. No reason or cause is required or given and only a minimal notice period payment (a week or two) is paid out, so understandably the number of holiday days Americans take is amongst the lowest in the developed world as a result.

A lot of US companies have an active policy of firing the lowest performing 20% of staff every year and replacing them with an intake of ambitious newcomers hungry to work 80 hour weeks to prove their worth.

The second highest productivity on that chart is Germany, which has the largest rate of immigration in Europe, and also one of the lowest minimum wages of the original EU countries. Germany also has one of the highest GINI coefficient inequality scores.

My personal opinion is that the primary reason for the UK being so low in productivity is that we are bogged down in almost entirely UK specific red tape...

In Germany or the US you'd never dream of closing the Autobahn or Freeway for 20 hours to 'investigate' a routine accident. Or making people fill in an accident reporting form for an office paper cut (yes, I've seen it done here).

In all my years in the US I never saw anyone do a written risk assessment to put up a ladder and change a lightbulb.

I've seen it, and endless other similar nanny-state interferences, so often here it makes me want to scream....

Joe_Bloggs

Hamish said:-

The USA has the best productivity on that chart.

Not surprising, when in most states, you can hire and fire at will.

Literally an employee can show up for work, be told "you're fired", and get escorted off the premises. No reason or cause is required or given and only a minimal notice period payment (a week or two) is paid out, so understandably the number of holiday days Americans take is amongst the lowest in the developed world as a result.

A lot of US companies have an active policy of firing the lowest performing 20% of staff every year and replacing them with an intake of ambitious newcomers hungry to work 80 hour weeks to prove their worth.

Rank and Yank for UK employees ?
Perhaps trial it North of the Border First.
J_B.

Generali

Clearly even the UK has some way to go to beat French statism.

Part of the missing piece of the puzzle is probably capital. Labour doesn't make stuff unaided, it uses capital to make stuff. Consider a minicab driver: he can carry a lot more passengers if he has a radio or telephone so he can collect people from where they are rather than a cab rank. A car rather than using his back makes a cabbie even more productive!

cepheus

I would expect productivity would lag output in a low skill, low pay type economy and this is what is being suggested here.

There are competing explanations for this productivity puzzle – that even as output is increasing, productivity is not. The most immediate is that our “flexible” labour markets have been proved to be very effective in delivering part-time and temporary work, at low cost to employers. The rise of zero-hour contracts is testament to that - one survey suggests that up to 5.5m people are now working on a zero hours basis.

Joe_Bloggs

Generali Said:-

Consider a minicab driver: he can carry a lot more passengers if he has a radio or telephone so he can collect people from where they are rather than a cab rank.

Hence the Uber service versus the established taxi service.
J_B.

CKhalvashi

There are more jobs, there is more money in the system, but the first is outweighing the second at this moment in time.

The average household is worse off now, than before the last election and seemingly in the majority of cases, the only ones to benefit are the rich.

90% of our business is based on exports, and for various reasons we've grown faster than the average, but for those companies resting on UK markets, there seems to be much more difficulty, so what does that really tell you?

michaels

The French leave the 11 percent least productive idle on the dole. In the uk we force 5 or 6 percent of them into jobs so of course our productivity is lower. They also make employing people very expensive so no wonder french employers provide the capital and training to get the most out of each one.

Generali

cepheus wrote: »

I would expect productivity would lag output in a low skill, low pay type economy and this is what is being suggested here.

Why would you expect that?

HAMISH_MCTAVISH

Cyberman60 wrote: »

Basically the other countries work fewer hours and for more pay.

No, that's not right.

UK average wages are higher than Germany, France and Italy.

(Haven't bothered checking US and Canada)