'Worst decade for UK productivity since Napoleon'

Conrad

GreatApe wrote: »

Very misleading title. Actually not misleading, just plain wrong

It is not the worse decade for UK productivity

It is the worst decade for UK productivity GROWTH

In fact the last time we were this productive was at the height of a boom. Maybe positive news doesn't sell?


Anyway why did productivity growth not continue post 2007?

One reason for instance is that UK oil and gas and coal output has crashed due to simple depletion of resources. That means if you exclude that aspect of the economy we are actually more productive than we were in 2007.

I think perhaps the actual reason is the boom and bust cycle hiding things.

I mean if you look at it like this you see a stagnant decade



But why not look at it like this?

Thanks for evidence based thoughtful posting like this

System

What a curious choice of comparisons. Why on earth should productivity have been low during the Napoleonic era? Wars generally stimulate booms, and if the argument is that wars impose abnormal costs and sap national income and squander it all on munitions, why not either of the two world wars?

GreatApe

Conrad wrote: »

Mass cheap labour immigration means business has avoided investing in technology and other productivity enhancements.


Also note we are a service based economy, productivity is harder to increase - you can only serve so many cups o coffee.


New farm machinery could enhance productivity if Farmers have less supply of cheap labour

Farms are irrelevant too small a sector.

Also ironically efficiency improvements in the public sector would show up as negative productivity growth or just don't register. If someone invented a drug that cost 1p and fixed everything from broken legs to cancer to pulling out a rotten tooth and replacing it with a new one. The person who invented said drug would win a dozen noble prizes and be remembered for all time.

The drug itself would be priceless so important we couldn't even put a value on it. However it wouldn't show up as productivity increase. In fact it could cause the value added in healthcare to go to zero and cause overall productivity to fall as a million NHS workers now need to start serving you coffees for a living.

I wonder if total national net worth would be a better metric to measure economic progress? By that metric we are a lot richer than any other point in time. I think this makes sense. You wouldn't need to be more productive to have a better life if you are already productive enough to provide for your own needs and save on top. What you saved would be your increased wealth.

Thrugelmir

GreatApe wrote: »

Also ironically efficiency improvements in the public sector would show up as negative productivity growth or just don't register.

If fewer people were required to produce the same output. Then those employees that left the public sector and joined the private sector. Would be contributing to increased output, i.e. generating wealth. In the process reducing the burden on the taxpayer.

GreatApe

Thrugelmir wrote: »

If fewer people were required to produce the same output. Then those employees that left the public sector and joined the private sector. Would be contributing to increased output, i.e. generating wealth. In the process reducing the burden on the taxpayer.

Yes if the drug was priced at the same cost as the NHS that might be true it might add up

But if the drug was priced at 1p a pop healthcare goes to zero cost. So the economy contracts by about £150 billion. The government now has £150 billion more so it could cut taxes so people have more money for coffees and the ex doctors become Batistas or the government can keep the £150 billion and hire more state workers to do stuff whatever stuff might be.

In the case of the invented drug being free the economy would be roughly the same. So no output increase as measured in pounds and pence.

Its an odd situation. If the inventor charged £1000 a pill and we needed 150 million pills a year (so total value £150 billion or roughly equal to the NHS) it would add to GDP and whatever the freed up folk do would add to output and total prodicitivty would go up. If the inventor gifts the drug to the world for free then total GDP stays flat and productivity doesn't increase.

There is something wrong with the metric used it doesn't capture value it captures pounds and pence. Often the two are linked but not always. Or I could be wrong that's just as likely :rotfl:


I'm trying to get my head around this.
Let's say someone makes a film all by themselves
If they give it away for free it adds nothing to the economy
If they manage to sell it it might make many millions in cinemas and DVD sales etc
Yet the actual output the film is exactly the same
Would apply to literature. Almost anything that is zero or near zero marginal cost. Music drugs software books films etc.

GreatApe

Thrugelmir wrote: »

If fewer people were required to produce the same output. Then those employees that left the public sector and joined the private sector. Would be contributing to increased output, i.e. generating wealth. In the process reducing the burden on the taxpayer.

Just typing as I think...

Actual output of goods and services would go up
But would the £££ value of total value added go up?

My guess is no not if the drug is free..
Healthcare goes down £150 billion and the staff that used to work for the NHS go and produce a whole load of other goods and services and add £150 billion of produces and services. Overall zero.

If the inventor sold the drug for £1k a pop and let's say it cost the nation £150 billion then healthcare is still adding lots to the economy. The ex NHS workers now need to go produce something else.

OK the drug inventor is pulling in £150 billion income annually. He either spends it all (very unlikely) purchasing goods and services which are all indirectly produced by the ex NHS workers. Or he saves it buying maybe government bonds and the government spends the cash buying goods and services from the ex NHS workers and the guy gets an IOU and the government increases its debt. Or if they guy buys stocks and shares with his huge £150 billion annual income. Share prices boom but existing share holders get £150 billion a year fr selling down their shares and use the money to buy goods and services from the ex NHs workers.

If the inventor charges £150 billion annually for the drug interest rates crash and stocks boom. Ex NHS workers produce goods and services for bond and stock sellers. If the inventor gives the drug away for free ex NHS workers produce foods and services for the whole public spread thin (taxes cut) or the ex NHS workers produce goods and services for the new state employees.


Hmm this is an interesting thought.
I think there is some insight to be gained here but its too late to continue

Thrugelmir

GreatApe wrote: »

My guess is no not if the drug is free..
Healthcare goes down £150 billion and the staff that used to work for the NHS go and produce a whole load of other goods and services and add £150 billion of produces and services. Overall zero.

How people are managed is the key to their productivity and efficiency. If employees spend 20 minutes a day on their Facebook accounts or texting. Then that time is lost. Never to be recovered. It's as much about the cultural attitude to work. The French and Germans have access to exactly the same technology, drugs etc. Their output is higher. When at work they work.

economic

Thrugelmir wrote: »

How people are managed is the key to their productivity and efficiency. If employees spend 20 minutes a day on their Facebook accounts or texting. Then that time is lost. Never to be recovered. It's as much about the cultural attitude to work. The French and Germans have access to exactly the same technology, drugs etc. Their output is higher. When at work they work.

Depends. You can be at work and have finished all the work and so it makes sense to utilise the time you have to be in the office for personal reasons like fb or online shopping.

buglawton

Thrugelmir wrote: »

How people are managed is the key to their productivity and efficiency. If employees spend 20 minutes a day on their Facebook accounts or texting. Then that time is lost. Never to be recovered. It's as much about the cultural attitude to work. The French and Germans have access to exactly the same technology, drugs etc. Their output is higher. When at work they work.

How people are trained and equipped is also key. Europeans doing same job as me seem to have had deeper training. Here in the UK training seems to just for minimum legal requirements, all other training is done in a rush and management seems to think it's a privilege/bonus for us to receive it.

I can even recall a case where my previous employer banned a coworker from doing a job-related evening class, as it would have interfered with is his on-call overtime availability.

The amount of tools/resources also matter a lot. If you're always sharing them your work gets done less efficiently.

GreatApe

The UK outputs more than France does (given the exchange rate when I last checked)

So the French are not more efficient nor richer. They are more productive in that they work fewer hours. This isn't a big deal they aren't more wealthy for it.

This is despite the France having some big natural advantages. Like a lot more land which adds to their GDP and note built infrastructure in the form of buildings and homes which add rent or imputed rent.

We are indeed behind the Germans but that could just mean the currency is undervalued. Germany also has more land and a much larger housing stock adding rent and imputed rent.

Overall I would say use national net worth as an indicator of wealth not productivity or even GDP