So apparently I am lowering productivity

So I should quit my job to increase productivity then? Having done economics at school. I pretty sure I increase productivity. Also if I do not have a job I am. a problem do have one I am also a problem, huh?

IIRC child poverty is calculated as those households with an income below 60% of the national. But median is used rather than mean, so all-else-being-equal, increasing the wages of doctors and nurses shouldn't affect child poverty unless they represnt a majority of the population.

Yep. Definitely highlights the saying about 'lies, damned lies and statistics'.

I know this is aside from the main point of the thread, but it's worth noting that each of the relationships we've discussed is based on an assumption that the variables are independent: after all, the richest leaving the country improves the measure of child poverty only if their leaving doesn't have indirect negative impacts, like job losses.

When you consider the vast range of personal ability and work ethics, from the lazy so-and-so who spends the entire morning chatting about last nights soaps to the super-productive over achiever, the whole point becomes moot.

But he didn’t say that. He singled out the disabled. A clever politician should know how offensive that could seem.

He said this: "for example of disabled people - something we should be extremely proud of". Why would people be offended by him highlighting something he's proud of ? 


Of course he avoids mentioning a bigger productivity issue - if you import a million low wage workers from East Europe in a couple of years then of course productivity falls based on the measure they use.  

The current measure of 'productivity' is the 'mean output per job hour'. I think that Jan (and Philip Hammond's) point is that if anyone joins the job market who has a lower 'output per hour' than the current national mean, their employment will technically reduce the national mean, and therefore 'reduce' productivity, as defined by that specific metric.

I have no idea if it's true that 'marginal' groups tend to have a lower ouput; as Burlybear points out there are lots of very lazy people who are able bodied, and someone's impact on 'productivity' isn't solely their output. However, this highlights the difficulty in trying to boil a complex and subjective issue down into a simple equation.

It's like if Tescos measured the 'success' of each store as being the average til receipt per person. Under that specific measure of 'success', stores would be better off staying closed for the year until Christmas, since that's when people tend to have big shops.

However, aside from Hammond's (IMO) questionable wording, I think there's a double-standard here. These metrics aren't defined in isolation from the politicians that use them. And if they're going to 'explain away' the iffy stats when the numbers are unfavourable, then they should be doing the same when the numbers are positive.

UK's low wage sector, including say retail & food & accommodation, is a relatively large part of the economy (30%) and has very low productivity compared with the rest of the economy (and with the rest of Europe actually). At the moment because of the available pool of low wage workers who have come to UK it has no particular problem in finding cheap staff. Companies in the sector find it easier then to hold down wages (even reduce them) and can cope with the staff churn that results - those companies can grow and be successful with this business model (eg. Sports Direct). This is a recipe for low or zero productivity growth - they have costs under control and don't need to do anything else to keep making a good profit and expanding - the average productivity of the entire economy goes down because this low wage sector gets bigger.

Imagine on the other hand that there was a significant shortage of labour in that sector - they would have to try to retain staff (by paying them more). In this case with increased staff costs they might invest in things like training and career development to increase the productivity of their existing staff to cover the cost increases. They might also invest in new technology and other capital spending to increase efficiency. All of these things tend to increase productivity. 

Now, you can debate whether increasing productivity in the sector is a good thing - if you fire a MacDonalds check-out operator and replace them with an automated computer touch screen then you have increased productivity without question, but a person has lost their job. If you raise the minimum wage then it might force companies to invest in efficiency increases (and hence productivity increases) to offset that cost but almost certainly this will involve them employing less staff as a result. 

They use Gross Domestic Product (GDP) as the measure for output, which is the total value of all products & services created during the time.

Apologies if I've misunderstood you, but I suspect that part of the issue may be that you're thinking about 'productivity' in terms of the publically accepted meaning ('effort' perhaps or 'work ethic' or similar), whereas govt is talking about 'productivity' to mean a very specific formula.

Taking a very crude example, if you compared a seasonal worker on a farm with a banker; you might argue that the amount of effort put in by the farm worker is greater. However, the monetary value of what they've created is probably considerably less. Since 'productivity' in this sense is simply the monetary value of what each person has produced divided by the time they took, the farm worker is probably less than the banker.

Ah, apologies. Yep that makes sense; if someone is replaced by another person who produces the same amount in less time then the productivity measure should go up. In terms of Hammond's comment though, I think his argument was that the 'marginal' workers were additions to the employment pool, rather than replacements of existing workers.

For the avoidance of doubt, I found his comments pretty distasteful and I'm not sure that it's necessarily true that 'marginal' workers have a lower productivity than the national average, but I'm just discussing this because I think it's an interesting topic.