Why is UK output per hour so low?

CLAPTON

Cyberman60 wrote: »

Goods and service output has no doubt increased mainly due to the invention of computers, funnily enough. That little invention along with mobile phones, is now found in most homes and businesses, but the parts are produced mainly by robotic machinery rather than people. That productivity mostly comes from machines, not people !!!!

what has that got to do with the level of goods and services and the unemployment rate?

ruggedtoast

Cyberman60 wrote: »

You're very very wrong. BTL investors pay tax (income or corporation tax) on their rental proceeds, buy products to upgrade properties thus boosting the economy and jobs, pay capital gains on property sales, and mostly DO NOT claim benefits as they are self-sufficient.

If only more people were self-sufficient in our country, as our annual welfare cost of over 220 Billion would be so much lower.

Self sufficient? Yeah right.

They're complerely dependent on their tenants who actual have real jobs that actually produce things and pay a wage. A wage that doesn't go into the real economy because it ends up in some leech's bank account supporting an engineered property shortage designed to benefit leeches.

Loughton_Monkey

N1AK wrote: »

...Sales = Turnover = Not GDP

Value Added = Value of Output - Value of Input = Profit

But then maybe Wikipedia, just about every other source online, and the textbooks that I, unlike you it seems, have actually read are wrong :rotfl:

Value Added = Value of Output - Value of Input = Profit
Value of Input = someone else's output = someone else's profit
Someone else's Input = Someone else again's output.........

You maybe are falling into the trap of thinking that I mean total turnover of all UK companies = UK GDP. That's obviously not what I am saying....

Loughton_Monkey wrote: »

.....There is no getting away from the fact that GDP to a country, is just like Turnover to a company. Increased turnover is 'good' except when that turnover is unprofitable.

It is "just like" turnover in that for UK Plc, the GDP basically measures the top line economic activity.

Try picking up a piece of driftwood from the beach. Spend a day carving it. Sell it for £50. Your turnover is +£50, your profit (value added) is £50, and GDP is £50 higher.

Now try paying me £40 to carve it for you. Has GDP gone up only by your £10 profit (value added)? No. My £40 is GDP as well. Actually, I had to buy a new chisel for £10 so my profit (value added) was only £30, but we can go on infinitum through the chisel maker's books.... The total GDP increase = the turnover added by the item. It is not (and I would never suggest) that GDP = your £50, plus my £40 plus the chisel maker's £10 turnover.

Adding up all your "Values added" will, mathematically, usually equal the finished good's 'turnover'. As a country [UK Plc], we are interested in the £50 extra turnover you produced*. Whether you, alone, did everything, or whether it went down a chain of 33 people all grabbing their little slice of the £50 is irrelevant to the economic health of the country. It may be of interest to the 33 companies involved in the chain of production.

So I stand by my words.

*I would agree that when buying your driftwood from abroad for £30, then you have added only ££20 to GDP, but the 'net exports' figure in UK's GDP is relatively small in the total calculation.

cepheus

Mike Haynes, Professor of International Political Economy at University of Wolverhampton, argues we needn't look further than the hand car washers to explain our low productivity figures. (I suspect it also explains the increase in employment). Extracts from his article below.

- published under the creative Commons Attribution No Derivatives license,

Mike Haynes does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

.......Joseph Schumpeter praised capitalism for its creative destruction. Weak companies are destroyed by entrepreneurs who build productivity enhancing new companies and sectors. But most entrepreneurship does not take this form. Entrepreneurship expert, Scott Shane, has stressed how it tends to be concentrated in economic sectors that are going nowhere. Much of the rise in self-employment in the UK is of this type.

Entrepreneurship expert, Scott Shane, has stressed how it tends to be concentrated in economic sectors that are going nowhere. Much of the rise in self-employment in the UK is of this type................

.....entrepreneurship can take many forms and has a dark side. It can lead to well-paid jobs, but entrepreneurs can also lead a “parasitical existence that is actually damaging to the economy” for example in the form of criminal activity or just businesses that do not add to the economy. This can be seen in the recent growth of the hand car wash sector.

......those working in hand car washes tend to be paid at the minimum wage or below it. They experience long periods of under-employment as they wait for customers and few have proper contracts or conditions. People working these kinds of jobs, in part, explains the UK’s productivity problem.

The hand car wash also shows something else – the shift towards a grey, informal economy – again something more associated with developing countries. Car washes should be subject to local authority licensing and planning. But councils struggle to bring them into line, as people take the opportunity to set them up on any piece of land, or in disused petrol stations by a main road.

Then there is the small matter of taxes. Many hand car washes are part of the cash-in-hand economy, where there is no record of the VAT, national insurance and tax that is being paid and passed on. And, inevitably in a country concerned with migration, there are suggestions that some of those working in your hand car wash are illegal or even trafficked workers.

Hand car washes are taking the economy backwards. They are part of the low-wage, low-productivity trap.

https://theconversation.com/the-return-of-the-hand-car-wash-and-the-uks-productivity-puzzle-39594

CLAPTON

cepheus wrote: »

Mike Haynes, Professor of International Political Economy at University of Wolverhampton, argues we needn't look further than the hand car washers to explain our low productivity figures. (I suspect it also explains the increase in employment). Extracts from his article below.

- published under the creative Commons Attribution No Derivatives license,

Mike Haynes does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.



https://theconversation.com/the-return-of-the-hand-car-wash-and-the-uks-productivity-puzzle-39594

which is caused by the huge number of immigrants willing to work for low wages

cepheus

That's right, blame it on the immigrants, never employers.

CLAPTON

cepheus wrote: »

That's right, blame it on the immigrants, never employers.

look, I know that if you go shopping and see the same identical product in two shop at different prices you ALWAYS buy the dearer;
If there is only one shop then you always demand to pay at least 10% more than the asking price:
I know you NEVER shop around for cheaper deals on gas or electricity
and I know that if you were offered two very similar jobs you would always go for the one with the lowest salary.
I know you never get a cash back CC or go for the best saving rates

I know you think that supply and demand has absolutely no connection with price : so you firmly believe that if a product is plentiful and the demand modest you DON'T think the price will fall.

Your answer to absolutely every economics and political issue is evil employers: this may make your life very simple and certainly avoids having to learn anything, but is ultimately sterile.

antrobus

cepheus wrote: »

...Mike Haynes does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations....

No 'relevant affiliations'?

For an 'academic' he has had aan awful lot of articles published in The Socialist Review and International Socialism, both of which are periodicals published by the Socialist Workers Party. I think that being a Trotskyist and a member of the Socialist Workers Party would qualify as being a relevant affiliation.

Mind you, I don't know whether he still is in the SWP. There were an awful lot of resignations from the SWP about a year or so ago - (Something to do with the cover-up of a rape allegation; it was in Private Eye) - and I think Mike Haynes might have been one of them.

Anyway, I'm not convinced that an opinion piece by a Trotskyist is much of an explanation of anything, even if he is a professor.:)

michaels

Seems to be a difference of opinion over whether we should be like the French who prefer 'no job' to 'carp job' for the least productive 5% of the workforce and are willing to pay the taxes to fund 11% unemployed or like the American's who think that any job is better than no job even with a minimum wage of only abut £5 per hour.

antrobus

CLAPTON wrote: »

which is caused by the huge number of immigrants willing to work for low wages

I'm not sure I'd buy that as an explanation.

After all the good old USA has an awful lot of illegal immigrants, some say as much as 5% of the US workforce are illegals, working for less than minimum wage, picking lettuces, and, err, washing cars.

Given that USA's GDP output per hour looks about 25% higher than the UK according to the opening post, I'm not that convinced that having a lot of cheap illegals, or indeed cheap car washing operations, is an explanation for the UK's poor performance.