Bloody Hell Jesse, Tory MPs are supposed to know this shit

According to the OECD, France has higher productivity than the UK – $53.7 per hour worked compared to $45.4 – despite its less flexible labour markets, in large measure due to its excellent infrastructure.

No, France has higher productivity per hour worked because of its less flexible labour markets.

The numbers are here. English and French GDP is about the same, hours worked are slightly shorter in France. More people are in work in the UK than in France. Take GDP, divide by number of people working, number of hours worked, get GDP per hour worked.

France also has 1 million more people unemployed. Actually, 1.2 million more.

So, put this together and what do we get?

Yup, we\’ll also add GDP per capita, which is the true measure of the wealth of the population. Which is (2008, PPP, US$, OECD figures again) 33,090 for France and $35,631 for the UK.

Well, what we actually get is that France doesn\’t have the least productive 1.2 million of their people in the labour force. That\’s not a terribly strong assumption: not a huge assumption, that those unemployed are those with the lowest productivity.

So, given that their least productive are not working then those who are working will have a higher productivity. For we\’ve taken out of our average the least productive. However, in the UK, we go further down into the less productive being included in the labour force. You can regard this as a good or a bad thing, up to you: unemployment is corrosive to the human spirit or what the hell, have fun and leisure guys! But it\’s undoubtedly true that we\’re going to have lower productivity per hour worked by including in our average produictivity figures the lowly productive.

But that isn\’t actually the important figure: what we want to know is which system enhances the human condition best: sure, GDP isn\’t the best measure of this either but it\’s a better one. And it turns out that the UK system, employ the lowly productive, even at the reduction in average productivity per hour worked, provides the higher GDP per capita.

Another way of putting this is that by looking at productivity per hour worked we are fucking up. And yes, Tory MPs are supposed to know this shit.

6 thoughts on “Bloody Hell Jesse, Tory MPs are supposed to know this shit”

  1. Do you think you are the best person to lecture others on understanding productivity, given you think you can increase it simply by lower-than-inflation wage increases?

  2. 1988-91: Ran a project giving away textbooks.
    1991-97: Barclays, probably investment. Definitely not the best place to learn about the real world.
    1997-07: Philosophy lecturer, researcher & author.

    Nope – don’t see how he would know this stuff.

    Matthew – if costs rise more slowly than prices, productivity rises. Now, wage restrain certainly isn’t the most effective way of improving productivity (new technology generally is) but it does work. Or am I missing something.

  3. Do you mean profits?

    Not really. Although you could more accurately accuse me of meaning margin.

    Productivity being the ratio of useful output to inputs. And Labour productivity can be usefully measured in monetary terms as well as other ways (per hour, per worker etc).

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