We’re often told that the key to raising wages is to solve the ‘productivity puzzle’. Output per worker has stagnated since the financial crisis, leading economists to worry that the outlook for the economy is bleak. But a range of evidence across many countries suggests that the fall in productivity can be dated back to…
Philip Hammond committed to raising productivity in today’s Autumn Statement. A National Productivity Investment Fund worth £23bn will focus on infrastructure, including digital communications, and research and development. £23bn sounds like a lot of money; as Geoff has blogged elsewhere, it is actually less than it sounds, but it is a step in the right…
It is difficult for the public to appreciate how fundamental a specific interpretation of ‘productivity’ is to supporting the government’s fiscal policy. It is even more difficult to comprehend that this interpretation is primarily a policy-based or ideological judgement, based on the thinnest scientific assessment. This difficulty is exacerbated by most economists seemingly being unable…
It is heartunions week – and perhaps one of the more surprising reasons to love unions is that they are good for productivity. I have an article on this in an e-pamphlet recently published by the IPA ‘Involvement and Productivity – The missing piece of the puzzle?’ Productivity has risen up the agenda in recent…
Politicians and policy makers talk a lot about the UK’s poor productivity record, with output per hour still below pre-crisis levels and well behind France, Germany and the USA. Narrowing the productivity gap with our competitors is worth a staggering £21,000 per year for every household in the UK. Boosting productivity growth (in both the…
Earlier this week I participated in an ACAS seminar on ‘Building Productivity in the UK’. I have written previously on the so-called ‘productivity puzzle’ and the critical importance of investment, skills and an active industrial strategy. But I have also highlighted the importance of better work organisation and a strong worker voice. So it is…
Although the Chancellor said today, “We will be bold in delivering the Northern Powerhouse,” he had little to add on his big, unifying idea of “connectivity.” The theory (that I’ve not been able to track down to its evidence base) is that “a transformation in connections between the great cities of the North and beyond…
This morning the Governor of the Bank of England Mark Carney interviewed on the Today programme said that low productivity and lack of investment by employers, not migrant workers, were to blame for the lack of wage growth. Last year Carney argued wage increases would be necessary to increase growth when he spoke at the TUC Congress last year. TUC…
In a column in today’s Financial Times (‘What the next chancellor does not yet know’), Chris Giles sets the economic tone for the next Parliament in part on the basis of yet unknown productivity outcomes. For Giles, as for many others, productivity is an inherent quality or defect of the economy that operates on a…
As many argued in the wake of the Budget, productivity outcomes remain a significant concern and major blot on the government’s economic record. Today ONS issued the first figures for 2014 as a whole, showing growth at only 0.5 per cent, up only marginally on 0.4 per cent in 2013 (left chart); they remarked that…