It’s one of those Willy Hutton things – French labour productivity is higher than UK, therefore Britain should do things more like France. Which is true of course, if labour productivity was the be all and end all of the thing we’d like to organise society to improve.
The thing is the comparison doesn’t work quite the way that Willy and the Hand Jivers think. If you fire the least productive workers then productivity will improve. For we count productivity only over the output and hours in of those in employment. We don’t include in our calculations those whose productivity is zero because they’re not working any hours.
We can even prove this with reference to the United States:
American workers’ productivity increased at its fastest pace in 11 years during the height of the coronavirus pandemic, trouncing predictions for a more muted rise.
Productivity, a measure of output per hour, rose by 7.3 per cent in the second quarter, reflecting the fact that hours worked fell at a greater rate than output, the US Labor Department said. The number of hours worked by Americans fell by 43 per cent between April and June, the largest decline since 1947, while output fell by 39 per cent. The jump in productivity caused the annual trend to rise to 2.2 per cent from a year ago.
Two effects going on here. When you fire people you fire the marginal employee – the one with the lower productivity. Secondly, the parts of the economy most hit with the lockdown were the low productivity ends of the services sector – restaurants and so on and on.
Which brings us back to the French example. It’s easy to raise worker productivity by firing the least productive workers. The flip side of this is that you end up with a hardcore of long term unemployment of those least productive workers. As, you know, sensible economists have been pointing out for decades now.
And, yes, French long term unemployment is higher than American – that’s why French productivity is higher.
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And in France supermarkets lack shelf-stackers so shelves don’t get stocked daily... or Heaven forfend... during the night or Sundays; products are frequently out of stock for long periods awaiting suppliers. People are used to taking what is there, rather than what they want.
Waiting times to get work done, such as renovations, is six to twelve months, with parts needed can be on back-order for weeks.
The French may be more productive, but produce less on a timely basis.
Payroll expenses are very high, labour regulation very strict, consequently employers employ minimum necessary and are reluctant to engage young workers whose abilities and work ethic are unknown since it is virtually impossible to fire them if they are not very good, and hugely expensive to try.
Pre-Covid imbecility unemployment was around 10% in general, 23% for the 16 to 25 age range.
Another problem with using GDP to calculate national 'productivity' is government employees, who are generally included in the figures by adding in their total employment costs*. So it's easy to boost national productivity - create thousands of new govt jobs (say, diversity officers) on a high salary and voilà!
* Tim recently informed us (it was news to me, at least) that the ONS are making some attempts to improve on this by relating it to actual output, but that's only possible for a limited subset of government jobs
How much movement in productiviy is reflective of diligence and skill on the part of the employee vs improved tools and technologies provided to them to use? Someone can be a fit, lean, hungry and hard working ditch digger, but the overweight guy operating a backhoe and who wants to knock off at 3 will still dig more ditch in a day.
Absolutely. But "labor-force productivity" is certainly not measured in tons of dirt moved. The only principle to guide public policy should be that, as the backhoe makes the shovel obsolete, those hard-working ditch diggers must be encouraged to learn to operate backhoes. Most "pro-worker legislation," and Trump's fixation on preserving manufacturing jobs, do exactly the opposite.
The focus is indeed the "hardcore of long term unemployment of those least productive workers." The missing link is to MAKE THEM MORE PRODUCTIVE, notably by retraining, moving house, or changes in attitude. A system of long-term payments (that cannot examine and usually just concedes that losing a job is a mishap that BEFELL the "client") is not a given and retards this solution.
Yes, France keeps this hardcore away from jobs so they can't screw them up. Likewise America. They are now burning down our cities, seeking to overturn the "system" that would require them to do useful work.
You do remind me of Phillip, the first governor of NSW.
He gave all the convicts who didn't need the government stores to support themselves a ticket-of-leave, in other words a sort of parole. Those who needed government support were put to work under the lash.
Perhaps it'd work today?
The least productive workers are the you and if we look at youth unemployment rates in the OECD for 2019 we find:
UK: Men 13% and women 9.2%
France: Men 20.8% and women 18.1%
I'm sure Willy isn't advocating sacking young people, but that's what he's implying.
Wonder why we are not hearing, loud and very insistently, that even unemployment has a gender bias?
Obviously I'm not an economist, as restaurants for me (at least the good ones) by producing a delicious dinner seem, to me at least, to be very productive indeed. I can't eat a widget, but I do enjoy a good Beef Wellington.
But... I thought that jobs were a cost, and the more unemployed the better the economy was doing?
Jobs are indeed a cost, the question is whether the output produced from the job is sufficient to justify the cost of employing someone to do it.
Jobs are a cost and if fewer jobs are required for one economic activity the more people are available to engage in another, resulting in greater output overall.