The average American is 39 per cent wealthier and 38 per cent more productive than the average Brit.
Average wages are determined – no, determined – by average productivity across the economy. As the man (the Nobel Laureate even) said, productivity isn’t everything but in the long run it’s pretty much everything.
One presumes the standard answer is Brexit. And not enough immigration.
I of course would argue for too much immigration, too many windmills, and not enough fracking. And too much wasted on foreign aid.
Perhaps someone else has a different answer.
Too much Government interference in everyone’s lives. Which demands a punitive tax burden to fund it.
Well why is that? I would not say that in practical terms the typical american worker is any more productive than a typical UK one. Surely the difference in productivity is driven by the fact the US has massive tech giants like Microsoft, Google et al, and we don’t? The typical plumber, or electrician, or car plant worker, or bus driver, or healthcare worker, or warehouse operative is no more productive in the US than the UK, or anywhere else for that matter. They just have massive companies that dominate the entire global economy and the productivity in those then subsidises the rest of the economy.
There’s also the issue that lots of Americans would not be as well paid as they are if the US government were not able to print and spend as many dollars as it likes because its the global reserve currency. If that were to change then the average US worker would suddenly be a lot poorer, regardless of productivity.
Jim
One does wonder whether the yuan will replace the dollar. But a quick google suggests that this is a long way in the future. If it happens at all.
“One does wonder whether the yuan will replace the dollar. But a quick google suggests that this is a long way in the future. If it happens at all.”
I suspect its one of those events where nothing happens for decades, then its all over in a weekend. When that weekend will be is unknown of course, but it will come. No empire lasts forever, and the US one is looking particularly fin de siecle.
USA is way more productive on housing, childcare, energy.
Also has fewer low productivity workers such as train drivers and non-productive workers such as winter fuel allowance administrators, minimum unit price modellers.
I think Jim may be wrong that US workers in like for like jobs are about the same productivity as UK ones but the mix of job matters (ie have more high productivity jobs in the mix and average productivity is higher too). But don’t eg US construction workers often get to use faster construction techniques than their UK equivalents? Their retail workers have often had more cutting edge tech for logistics, stock takes etc. Factory workers and even service workers may be more productive if their industries are better capitalised or have more scale from the larger market available there. Would be interesting to see some like for like comparisons!
The Reichmans (think that’s right, Canary Wharf folks) improved building productivity. The canteen (and toilets etc) were winched up the building as the building went up. Saved all sorts of time of folk coming down for their lunch. Productivity increases can be non-obvious.
Everything in America is bigger. Your retail clerk can be more productive when every shop is massive. An American restaurant with 100 tables will be more productive than a British one with 20 tables. And so on.
Stating that one country’s workforce is more productive than another’s often propagates an assumption that one country’s people are somehow harder working and more worthy than another’s. Having worked in several countries, I would say that attitudes toward work certainly vary from country to country, and Americans are towards the harder working end of the scale, but they are not on the far end. Certainly the far end is occupied by some Asian countries.
Efficiency only comes partly from an employee’s own efforts which can increase as skills increase, but largely it’s a result of having better tools or technology to work with. And also perhaps, as some others have noted above, having some unique industries that are highly productive. But largely productivity is increased because management acquires and implements the technologies or provides the tools to get more out of each workers’ efforts.
On the other hand, the environmentalists are actively seeking to create to create a poorer society that consumes less. I’m sure that before long the Democrats will be engaging British pols to come consult on how to do it.
You do have a point TD. Making the UK poorer so it’ll consume less IS the Green program.
So one could argue that the policies of the government are actually doing what they’re supposed to.
Counterfeit-Nobel Laureate.
But don’t eg US construction workers often get to use faster construction techniques than their UK equivalents?
Anon’s dead right there. I was very much in favour of productivity increasing tech. Things like plasterboard erectors, collated screw guns & strap on stilts rather than 4 times the man hours using hammers & steps. I’m just looking at a method of relining defective cast iron soils stacks in situe rather than the expensive, time consuming task of removing & replacing on a project here. Looks like it’ll cut a 50,000€ bill in half. All of this stuff has originated across the pond.
Also note, Americans get only two weeks’ holiday a year.
Are the numbers adjusted for hours worked and holidays?
There was always a fuss that France was supposedly a lot more productive than us until the ONS and/or OECD discovered they were comparing apples and oranges and when they made the adjustment they found there wasn’t a great deal of difference.
Also, is that just the working population? You can have a very productive workforce and high unemployment, again looking at France the last time I checked they had one of the highest youth unemployment rates in the OECD.
Also where does illegal immigration fit into productivity figures? Presumably the output of illegals filters through into GDP somehow but as they don’t exist on the population figures it makes a country with lots of illegals look more productive.
@ Jim
NO, productivity is output per hour worked so it doesn’t matter what the population figure shows – schoolchildren and retired people have no impact upon the productivity ratio.
“NO, productivity is output per hour worked so it doesn’t matter what the population figure shows – schoolchildren and retired people have no impact upon the productivity ratio.”
The whole point is that the authorities don’t know what hours illegals work, they don’t show up on the official books. If a company is employing illegals, they aren’t going to be admitting to it. But their output will show up somewhere, if only in the revenues of legit companies who illegals spend their earnings with. So a country with lots of illegals will be showing higher profits in the legit economy than would otherwise be the case if the illegals weren’t there. For the same alleged amount of hours worked by legit employees.
Whether its headcount or hours worked, the authorities don’t know what either of those figures are for illegals.
It’s all the signs advertising Hand Car Washes which get me. As though washing a car by hand is somehow a thing to be proud of.
Cars – built by robots abroad, washed by Roma here.
@ Jim
No, just no. Any revenues of legal companies will be included in the value-added of the legal companies and divided by the hours worked by their employees. Of course if the illegals spend their money to buy bread the income of the baker, or Tesco/Aldi, will show up in *their* value-added, but the expenditure by someone else paid to the illegals will not do so and consequently the two distortions to the productivity calculations will cancel each other out.
I do not try to tell you that I know more about farming because my father allowed me to grow carrots in the garden: you do not know more than I about statistics. There are many faults with official statistics but far fewer than politicians would like.
Jim,
“I would not say that in practical terms the typical american worker is any more productive than a typical UK one. Surely the difference in productivity is driven by the fact the US has massive tech giants like Microsoft, Google et al, and we don’t? ”
That’s a tiny number of jobs, relatively. Add in Facebook and you’re talking 400,000 people.
My experience is that Americans take their jobs more seriously than people in the UK. They care more about delivering to their customer (whether that’s an actual customer or the boss). People here have much more of an attitude that if they turned up at 9 and left at 5:30 then they have no blame for things being late.
And the culture supports that. The UK has much more of an entitlement culture. That companies are all awash with money and can be generous with their employees. They want more maternity or other leave. Books are being cooked to promote 4 day weeks, and everyone thinks they’re going to get them, at no cost. That everyone can have employment tribunals to protect them. Everyone looks forward to a fat redundancy cheque, even though someone has to pay for that.
It’s all the signs advertising Hand Car Washes which get me. As though washing a car by hand is somehow a thing to be proud of.
There’s a guy in our village does hand car washing – he’s a perfectionist, taking two hours for a full valeting (which is mostly what he offers) and is far better than anything that can be achieved by a machine (or the Roma on the supermarket car park).