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Yes, this is what stopped unemployment from soaring

In fact, the productivity position is worse than this. Since the financial crisis,
productivity growth in the UK has more or less stalled altogether. This is a stark
divergence from the long-running trend (see figure 3.3), and it has occurred across
almost all sectors.76 It goes a long way to explaining the stagnation of earnings
over the past decade.

If GDP goes down by 10% should all wages fall by 10% or 10% lose all their wages? Britain’s flexible labour market meant this time around the first happened. Anybody capable of thought would consider this a success.

7 thoughts on “Yes, this is what stopped unemployment from soaring”

  1. Last year there was a lot of talk, at least on R4, about France’s productivity levels outstipping the UK’s. There were only a few voices in the wilderness crying, “But look at their unemployment rates. Their productivity levels are higher because they sacked all the under-achievers”.

  2. Their productivity levels are higher because they sacked all the under-achievers

    Not quite all – they still have Macron and all those politicians & bureaucrats.

  3. “Productivity” has fallen because unemployed people have been hired to do low-wage jobs that previously were outsourced to Asia. GDP has grown but average wages fell because “productivity” is average wage per hour – ignoring all the unemployed.

  4. Anybody capable of thought would consider this a success.

    The Left wins either way. 10% unemployment, blame capitalism. 10% drop in income, blame capitalism.

  5. Oh for crying out loud. The government floods the country with cheap imported labour and subsidises low paid part time working through tax credits and other in work benefits. Then we have flexible labour laws to let companies hire & fire easily. Of course productivity is stagnating.
    As PST says above, the alternative is the French system where nobody can be sacked so no-one is hired and employers mechanise like crazy.

  6. Bloke in North Dorset

    Couldn’t this also explain to some extent why average wages aren’t rising ….

    As unemployment falls those that are unemployed and re-entering the workforce are generally at the lower end of the skills/experience spectrum so are likely to take lower paid jobs thus bringing the average down.The same goes for students entering the workforce.

    At the other end baby boomers at the peak of their earnings are starting to leave the workforce or perhaps down shifting. Nobody is going to replace a high paid baby boomer with a student/unemployed person of the same salary and even if there’s some promotions it will be less experienced people who will be paid less.

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