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What a load of nonsense. Britain created many low wage jobs and decreased unemployment, of course the average "output" per hour will stagnate. The productivity

What a load of nonsense. Britain created many low wage jobs and decreased unemployment, of course the average "output" per hour will stagnate. The productivity of the country has increased dramatically though if formerly unemployed people now have jobs.

CommanderData 7y ago
I'm surprised the article didn't even mention this. Zero hour contracts, huge spike in low wage positions, not to mention apprenticeships (low paid) and other DWP work schemes that are considered to some as slave labour. Our government over the last 10 years has been racing to the bottom, and now we're leaving the EU, I'd love to see some of the Tories dreams of poorer employment rights come true. Some of which are horrifying, JRM to name one.
- lazyjones 7y ago
  It's the secret of Germany's successful run before the recent slump and possibly the only way to deal with the increased immigration of unqualified people.
  - bilekas 7y ago
    > increased immigration of unqualified people What ? Can you share the research supporting that ? Also I can't wait to see the Pro-Brexit teams out picking fruits and washing toilets & floors.
    - coolplants 7y ago
      Why can’t you wait to see pro-brexit teams picking fruit, etc.? Are you implying that low-skill jobs are degrading/undignified?
      - grabeh 7y ago
        No, they're implying that there's been a failure by pro-leavers to acknowledge that many of these roles have been in the recent past been performed by immigrants from Europe. Now with the UK's departure, employers may struggle to fill vacancies (and indeed it appears they have been - see link below), so the poster was sarcastically suggesting that they can't wait to see pro-leavers performing these tasks because it seems like in many cases UK nationals aren't willing to perform these types of roles. The nature of the role is irrelevant and the poster wasn't suggesting that pro-leavers should be subject to degradation! https://www.theguardian.com/business/2019/oct/11/tonnes-of-crops-left-to-rot-as-farms-struggle-to-recruit-eu-workers https://www.theguardian.com/business/2019/oct/11/tonnes-of-c...
        coolplants 7y ago
        All we know is that UK nationals aren’t willing to do those jobs at the wages being offered. If employers raise wages to something liveable and decent then it’s reasonable to assume employment in those areas will increase.
        grabeh 7y ago
        Yes, of course. I was just explaining why I thought you'd misinterpreted the original poster's comment.
        coolplants 7y ago
        Well I think he was hostile and resentful and that’s not cool. I also sincerely and in good faith can’t wait to see less people exploited for cheap labor and more of my fellow Britons employed with a decent wage for once.
        bilekas 7y ago
        Hostile no, but I can see the market still needing unskilled labour of course, and I genuinely hope for your sake that it doesnt just cause the prices to increase dramatically. I'm not from nor living in the UK but I sure hope things work out. My post was a dig at the idea that all the UK needs to allow into the country is highly skilled people. I don't buy that argument.. But lets see.
    - rjldev 7y ago
      They will if the wages for these jobs increase due to decreased labour competition. That or there's more starter jobs for teenagers
  - bildung 7y ago
    Sadly there was no successful run. While this made unemployment rates look better, it has been shown that the absolute amount of hours worked hasn't increased in that period. In other words: 1 good job became 2 bad jobs, which meant less contributions into welfare and pension funds (both of which are essentially federal, not company based in Germany). It also lowered aggregate demand, and this lack of domestic demand partly explains why Germany has so many problems recovering from the crisis.
    - lazyjones 7y ago
      > Sadly there was no successful run. Depends how you look at it - they certainly had an impressive account surplus, for 4 consecutive years (currently world leading $293b). > 1 good job became 2 bad jobs, which meant less contributions into welfare and pension funds This means lower contributions but also much lower payout for welfare. > this lack of domestic demand partly explains why Germany has so many problems recovering from the crisis. AFAICT domestic demand in Germany is still strong, but clearly attempting to boost it through welfare proved to be an inferior strategy.
- tonyedgecombe 7y ago
  Underemployment has been falling alongside unemployment, zero hours contracts aren't as big of a problem as they are made out to be.
  - bilekas 7y ago
    They are if you're looking for some financial security, even if you're trying to demonstrate stability for loan applications etc. They're essentially the old method of factory workers showing up outside and the manager just picking X number for the day. I would have thought Britain has moved passed that.
  - drcongo 7y ago
    Tell that to the people forced to work on zero hours contracts.
tonyedgecombe 7y ago
Unemployment is very low (45 year low if I recall correctly). However the productivity of the nation as a whole hasn't increased dramatically, GDP growth has been anaemic in recent years. Having said that I'd rather we had low productivity than the problems some of the Southern European countries have had with high youth unemployment.
- lazyjones 7y ago
  > GDP growth has been anaemic in recent years. It was usually not worse than the EU's, often better with the years 2017/2018 as notable exception: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=EU-GB https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locat...
  - tonyedgecombe 7y ago
    No, although I would also describe the EU's growth as anaemic.
- thu2111 7y ago
  GDP growth hasn't been anaemic in recent years. It's been pretty much the same it always was (outside of the GFC) https://tradingeconomics.com/united-kingdom/gdp-growth https://tradingeconomics.com/united-kingdom/gdp-growth Set the graph to 25 years and take a look. Quarterly GDP is a pretty stable value - to the extent there's any sort of lower average since the recession (which is a bit hard to eyeball) which such a small difference level it can easily be a measurement artifact. GDP calculations get changed from time to time and the changes aren't marked on the graph. As for low productivity growth in the UK, one of the reasons economics has a bad reputation is because of "mysteries" like this. https://tradingeconomics.com/united-kingdom/productivity https://tradingeconomics.com/united-kingdom/productivity Look at the 25 year graph. Growth flattens off around 2004. Gee, what happened in 2004? https://en.wikipedia.org/wiki/2004_enlargement_of_the_European_Union https://en.wikipedia.org/wiki/2004_enlargement_of_the_Europe... Since 2004 the UK has had waves of unlimited immigration from ex-Soviet states that are extremely poor by comparison. It's been one of the most popular destinations for immigrants due to being English speaking, good at creating jobs and so on. What do we expect in an environment where cheap labour is abundant? We expect, firstly, stagnant wages after adjusting for inflation: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/articles/supplementaryanalysisofaverageweeklyearnings/september2018 https://www.ons.gov.uk/employmentandlabourmarket/peopleinwor... (look at the graph of real vs nominal in figure 1) And we expect low productivity growth because you get that through automation, but why automate anything when wages can't rise because there's an endless queue of people waiting to take jobs. There's no sign of this changing on the horizon. Johnson talks about changing the immigration system, but he is naturally very pro-immigration and always has been. With nobody to challenge him on the horizon and a bureaucracy so intellectually dominated by unlimited immigration thinking it actually can't say what the UK population even is, I would be willing to bet on a continuation of the UK's long term productivity stagnation. From a purely productivity-oriented perspective though, the good news is that the productivity stagnation isn't "real" in the sense of "we don't know how to raise productivity", it's just delayed by the lack of any need to. In contrast US productivity growth has continued in a fairly stable way. There are plenty of ways to boost productivity lying around. If wage growth continues to accelerate for whatever reason, productivity growth will follow some years later.
hhas01 7y ago
Britain may think it lives in a vacuum. But it does not. China has also created many low wage jobs and decreased unemployment. So how does their productivity compare to ours?
- lazyjones 7y ago
  > So how does their productivity compare to ours? I don't know, the OECD doesn't have data apparently: https://data.oecd.org/lprdty/gdp-per-hour-worked.htm https://data.oecd.org/lprdty/gdp-per-hour-worked.htm My guess would be that it is catching up, but still much lower. However, productivity per hour (in US dollars) is still much higher in the UK than e.g. Australia, the EU-28, the OECD or Canada. I'm not sure why this study took 2010 as a baseline though, it seems to be a bias towards how well countries copied with the financial crisis.
- raxxorrax 7y ago
  Many things in the universe live in a vacuum. China doesn't need a high productivity because they have man power. Sometimes you get 10-20 or more "assistants" for a technician if you are there for a business trip.
  - hhas01 7y ago
    “China doesn't need a high [per-capita] productivity because they have man power.” True; China doesn’t need high individual output as it more than makes up with sheer number of individuals. But, IANAE and even I can see how absolute per-capita numbers are meaningless outside of analzying an individual nation’s recent performance. On a global stage, the only absolute comparison of significance is per-trading block. So forget about comparing absolute numbers and look at relative trends, i.e. compare productivity growth. And this is why report is so concerning, because while China maintains its slow but steady growth in productivity (~6.6%), ours is flat at best (≤0%) and has been now for several years. The UK’s relative lack of bodies means we must always keep our per-capita productivity at a much higher level than China’s just to keep up. To use the popular aphorism: “Work Smart, Not Hard.” And we are doing neither, which means we’re falling behind. Yes, the reported flatlining is at least partly in consequence of the utter shambles of the Brexit process, but if post-Brexit UK can’t get productivity growth back up toot suite then it hardly takes an economist to project these trends forward and guess where it’s going to be 10 or 20 years from now. The UK has cruised far too long on credit and the legacies of empire. Now that we’ll really have to work for our living, it’s going to come as a nasty shock.
bildung 7y ago
Well, low wage jobs are almost always manual labor that is hard to automate and thus doesn't scale. So more low wage jobs means lower productivity. (Keep in mind that productivity has a specific definition in economics)

CommanderData 7y ago

I'm surprised the article didn't even mention this. Zero hour contracts, huge spike in low wage positions, not to mention apprenticeships (low paid) and other DWP work schemes that are considered to some as slave labour. Our government over the last 10 years has been racing to the bottom, and now we're leaving the EU, I'd love to see some of the Tories dreams of poorer employment rights come true. Some of which are horrifying, JRM to name one.

lazyjones 7y ago
It's the secret of Germany's successful run before the recent slump and possibly the only way to deal with the increased immigration of unqualified people.
- bilekas 7y ago
  > increased immigration of unqualified people What ? Can you share the research supporting that ? Also I can't wait to see the Pro-Brexit teams out picking fruits and washing toilets & floors.
  - coolplants 7y ago
    Why can’t you wait to see pro-brexit teams picking fruit, etc.? Are you implying that low-skill jobs are degrading/undignified?
    - grabeh 7y ago
      No, they're implying that there's been a failure by pro-leavers to acknowledge that many of these roles have been in the recent past been performed by immigrants from Europe. Now with the UK's departure, employers may struggle to fill vacancies (and indeed it appears they have been - see link below), so the poster was sarcastically suggesting that they can't wait to see pro-leavers performing these tasks because it seems like in many cases UK nationals aren't willing to perform these types of roles. The nature of the role is irrelevant and the poster wasn't suggesting that pro-leavers should be subject to degradation! https://www.theguardian.com/business/2019/oct/11/tonnes-of-crops-left-to-rot-as-farms-struggle-to-recruit-eu-workers https://www.theguardian.com/business/2019/oct/11/tonnes-of-c...
      - coolplants 7y ago
        All we know is that UK nationals aren’t willing to do those jobs at the wages being offered. If employers raise wages to something liveable and decent then it’s reasonable to assume employment in those areas will increase.
        grabeh 7y ago
        Yes, of course. I was just explaining why I thought you'd misinterpreted the original poster's comment.
        coolplants 7y ago
        Well I think he was hostile and resentful and that’s not cool. I also sincerely and in good faith can’t wait to see less people exploited for cheap labor and more of my fellow Britons employed with a decent wage for once.
        bilekas 7y ago
        Hostile no, but I can see the market still needing unskilled labour of course, and I genuinely hope for your sake that it doesnt just cause the prices to increase dramatically. I'm not from nor living in the UK but I sure hope things work out. My post was a dig at the idea that all the UK needs to allow into the country is highly skilled people. I don't buy that argument.. But lets see.
  - rjldev 7y ago
    They will if the wages for these jobs increase due to decreased labour competition. That or there's more starter jobs for teenagers
- bildung 7y ago
  Sadly there was no successful run. While this made unemployment rates look better, it has been shown that the absolute amount of hours worked hasn't increased in that period. In other words: 1 good job became 2 bad jobs, which meant less contributions into welfare and pension funds (both of which are essentially federal, not company based in Germany). It also lowered aggregate demand, and this lack of domestic demand partly explains why Germany has so many problems recovering from the crisis.
  - lazyjones 7y ago
    > Sadly there was no successful run. Depends how you look at it - they certainly had an impressive account surplus, for 4 consecutive years (currently world leading $293b). > 1 good job became 2 bad jobs, which meant less contributions into welfare and pension funds This means lower contributions but also much lower payout for welfare. > this lack of domestic demand partly explains why Germany has so many problems recovering from the crisis. AFAICT domestic demand in Germany is still strong, but clearly attempting to boost it through welfare proved to be an inferior strategy.
tonyedgecombe 7y ago
Underemployment has been falling alongside unemployment, zero hours contracts aren't as big of a problem as they are made out to be.
- bilekas 7y ago
  They are if you're looking for some financial security, even if you're trying to demonstrate stability for loan applications etc. They're essentially the old method of factory workers showing up outside and the manager just picking X number for the day. I would have thought Britain has moved passed that.
- drcongo 7y ago
  Tell that to the people forced to work on zero hours contracts.

tonyedgecombe 7y ago

Unemployment is very low (45 year low if I recall correctly). However the productivity of the nation as a whole hasn't increased dramatically, GDP growth has been anaemic in recent years. Having said that I'd rather we had low productivity than the problems some of the Southern European countries have had with high youth unemployment.

lazyjones 7y ago
> GDP growth has been anaemic in recent years. It was usually not worse than the EU's, often better with the years 2017/2018 as notable exception: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=EU-GB https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locat...
- tonyedgecombe 7y ago
  No, although I would also describe the EU's growth as anaemic.
thu2111 7y ago
GDP growth hasn't been anaemic in recent years. It's been pretty much the same it always was (outside of the GFC) https://tradingeconomics.com/united-kingdom/gdp-growth https://tradingeconomics.com/united-kingdom/gdp-growth Set the graph to 25 years and take a look. Quarterly GDP is a pretty stable value - to the extent there's any sort of lower average since the recession (which is a bit hard to eyeball) which such a small difference level it can easily be a measurement artifact. GDP calculations get changed from time to time and the changes aren't marked on the graph. As for low productivity growth in the UK, one of the reasons economics has a bad reputation is because of "mysteries" like this. https://tradingeconomics.com/united-kingdom/productivity https://tradingeconomics.com/united-kingdom/productivity Look at the 25 year graph. Growth flattens off around 2004. Gee, what happened in 2004? https://en.wikipedia.org/wiki/2004_enlargement_of_the_European_Union https://en.wikipedia.org/wiki/2004_enlargement_of_the_Europe... Since 2004 the UK has had waves of unlimited immigration from ex-Soviet states that are extremely poor by comparison. It's been one of the most popular destinations for immigrants due to being English speaking, good at creating jobs and so on. What do we expect in an environment where cheap labour is abundant? We expect, firstly, stagnant wages after adjusting for inflation: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/articles/supplementaryanalysisofaverageweeklyearnings/september2018 https://www.ons.gov.uk/employmentandlabourmarket/peopleinwor... (look at the graph of real vs nominal in figure 1) And we expect low productivity growth because you get that through automation, but why automate anything when wages can't rise because there's an endless queue of people waiting to take jobs. There's no sign of this changing on the horizon. Johnson talks about changing the immigration system, but he is naturally very pro-immigration and always has been. With nobody to challenge him on the horizon and a bureaucracy so intellectually dominated by unlimited immigration thinking it actually can't say what the UK population even is, I would be willing to bet on a continuation of the UK's long term productivity stagnation. From a purely productivity-oriented perspective though, the good news is that the productivity stagnation isn't "real" in the sense of "we don't know how to raise productivity", it's just delayed by the lack of any need to. In contrast US productivity growth has continued in a fairly stable way. There are plenty of ways to boost productivity lying around. If wage growth continues to accelerate for whatever reason, productivity growth will follow some years later.

hhas01 7y ago

Britain may think it lives in a vacuum. But it does not. China has also created many low wage jobs and decreased unemployment. So how does their productivity compare to ours?

lazyjones 7y ago
> So how does their productivity compare to ours? I don't know, the OECD doesn't have data apparently: https://data.oecd.org/lprdty/gdp-per-hour-worked.htm https://data.oecd.org/lprdty/gdp-per-hour-worked.htm My guess would be that it is catching up, but still much lower. However, productivity per hour (in US dollars) is still much higher in the UK than e.g. Australia, the EU-28, the OECD or Canada. I'm not sure why this study took 2010 as a baseline though, it seems to be a bias towards how well countries copied with the financial crisis.
raxxorrax 7y ago
Many things in the universe live in a vacuum. China doesn't need a high productivity because they have man power. Sometimes you get 10-20 or more "assistants" for a technician if you are there for a business trip.
- hhas01 7y ago
  “China doesn't need a high [per-capita] productivity because they have man power.” True; China doesn’t need high individual output as it more than makes up with sheer number of individuals. But, IANAE and even I can see how absolute per-capita numbers are meaningless outside of analzying an individual nation’s recent performance. On a global stage, the only absolute comparison of significance is per-trading block. So forget about comparing absolute numbers and look at relative trends, i.e. compare productivity growth. And this is why report is so concerning, because while China maintains its slow but steady growth in productivity (~6.6%), ours is flat at best (≤0%) and has been now for several years. The UK’s relative lack of bodies means we must always keep our per-capita productivity at a much higher level than China’s just to keep up. To use the popular aphorism: “Work Smart, Not Hard.” And we are doing neither, which means we’re falling behind. Yes, the reported flatlining is at least partly in consequence of the utter shambles of the Brexit process, but if post-Brexit UK can’t get productivity growth back up toot suite then it hardly takes an economist to project these trends forward and guess where it’s going to be 10 or 20 years from now. The UK has cruised far too long on credit and the legacies of empire. Now that we’ll really have to work for our living, it’s going to come as a nasty shock.

bildung 7y ago

Well, low wage jobs are almost always manual labor that is hard to automate and thus doesn't scale. So more low wage jobs means lower productivity. (Keep in mind that productivity has a specific definition in economics)