Perspectives on the UK’s productivity problem: the end of the puzzle?

workersThe UK’s productivity problem continues. Output per worker has barely grown since the beginning of the financial crisis in 2008. Why is this a problem? Because if we want rising living standards, we must have rising productivity over time.

In theory, rising productivity in our economy gives us choices between increased income and increased leisure time. We can choose on a spectrum between more income for the same hours worked and the same income for fewer hours worked, in other words, more leisure time. Depending on how we in society value work and leisure, increased productivity should make possible increases in human welfare.

Today, output per hour worked in the US is at a similar level to that in France and Germany. However, total hours worked per head in the US have tended to outstrip those in the latter two countries, meaning that output per head remains higher there.

Americans are on average richer (although greater inequality means that many of them are not), but they achieve these greater riches by working longer, while their French and German counterparts have more leisure time, including a shorter working day and longer holidays. This is down to collective economic and social choices, although these are also necessarily political in nature, and far away from simple choices freely made by individuals, as some might choose to believe. Continue reading

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Large-scale immigration: the costs and benefits

workersImmigration can be a divisive but also a sensitive issue. Arguments surrounding last year’s referendum here in the UK on EU membership could not avoid it. Media hysteria, particularly from the right, has focused mainly on the negative impacts, and rational debate has been drowned out. The right seemed to shout loudest, and the left often ended up talking to itself.

This post aims to make a small contribution to rational debate, drawing mainly on an interesting little book by Cambridge Professor Robert Rowthorn, published in 2015 by the think tank Civitas.

The overall findings of the study suggest that, at least in the UK, the overall net economic and fiscal (tax and public spending) outcomes from large-scale immigration are small when compared with the effects of more rapid population growth. Rowthorn argues that considerations of the latter should play a more important role when deciding future government policy. Continue reading

John Weeks: Labour Prevented Tories from Increasing Grip on Government — Radical Political Economy

The UK general election votes have been cast, and the results are nothing short of remarkable. Contrary to the early predictions of disaster for the main opposition Labour party, and for its leader Jeremy Corbyn, it was instead Theresa May’s Conservative party that suffered a heavy blow. The conservatives lost 12 seats in parliament and […]

via John Weeks: Labour Prevented Tories from Increasing Grip on Government — Radical Political Economy

UK election: British capital in disarray — Michael Roberts Blog

The UK election result is a personal disaster for the Conservative leader Theresa May. She called the snap election to get a big majority and crush the opposition Labour party and its left-wing leadership. But instead the Conservatives lost seats and its majority in parliament and Labour under leftist Jeremy Corbyn increased its share of […]

via UK election: British capital in disarray — Michael Roberts Blog