[Ignitionnet]

Originally Posted by Chris

It's called "the British disease", and was also the case when we had mighty trade unions and endemic overmanning of bloated state-run businesses.

There is simply something in our character, that we don't get as much done in a working day than many of our close economic competitors. Too many tea breaks, probably.

In the case of France this probably helps.
Alongside that the low productivity is actually a cause of the overmanning. Low productivity per staff member = more staff needed for the same output of work. Solve one and the other goes down, but not a lot has been done to.

---------- Post added at 10:30 ---------- Previous post was at 10:15 ----------

Originally Posted by Osem

... and/or a 'make do and mend' legacy of the past maybe?

Yes I well recall the days when gross over-manning was rife in certain environments and we all know what that eventually led to. The thing is, is it better overall to have higher, less productive, employment or lower, more productive employment? I guess the answer depends to an extent on perspective and the cost to the nation of having more people out of work, on benefits, than would otherwise be the case.

Not that you'll read this as you appear unable to handle well argued cases that are contrary to your opinion, preferring to think of people making them as trolls and ignoring them, but there seem to be different views and a few factors in play.

It is certainly in part down to a conscious decision to try and maximise employment at the expense of productivity.

But the ONS said output per worker in 2012 was 3% lower than it had been five years earlier and 16% below the level that might have been expected, had its previous upward trend not been interrupted by the most severe slump of the postwar era.

Another aspect is the low levels of investment in the economy by the private and public sectors. Lower CapEx means a less efficient workforce.

As a share of GDP, UK investment began to trail that of the US, Canada, France, and Switzerland in the 1990s. Investment fell from around a quarter of GDP in the late 1980s to just over 15%. With less investment, then there's less productive capital for employees to work with, and thus lower output per worker.

Rather than going into investment in the business money has been going into profits, shareholder returns, and compensation of senior management. We have also seen gross misuse of capital. Rather than going to productive investment in enterprise it's been finding its way into property.

The amount of zombie companies we still have operating, existing on cheap credit and unable to invest, isn't going to help. They should have been allowed to go bankrupt but our near-bankrupt banks wouldn't be able to take the hit.

Second, rock-bottom interest rates, and “forbearance” by lenders reluctant to crystallise their losses by calling in loans may have allowed inefficient businesses to survive when it might have been better – for the country’s productivity record at least – if they had been swept away by the crisis.

These are also mentioned by the BoE as the main issues.

Basically, then, we need to invest in our businesses, get more money into productive investment rather than have it sitting in buy-to-let, invest more in our people, and raise interest rates to force banks to take their losses.

Or we, as a nation, are just work-shy despite having the second longest working hours in Europe and all our industries, including those privatised decades ago, are apparently grossly overstaffed, with employers paying people just for fun when, actually, we have relatively liberal labour laws compared to our peers and outside of the public sector trade unions are practically non-existent unlike in Germany, France, and other places with less liberal labour laws and far stronger private sector unions.

Whatever most appeals.

As far as which of these are in prospect there are no signs that the government have any plans to invest in people, they want to reduce education spend per student and have already cut them at higher and further level, little appetite for interest rate rises and I'm sure the government don't want these as interest rates are a bragging point for them, and they continue to actively encourage misallocation of capital through constant demand-side stimulus of housing.

The attempts in the last administration to push more investment towards businesses failed and the cheap money ended up in property.

Bizarrely the poor productivity being resolved would actually both improve wages and improve return on investment.