What About Productivity

The French could take Friday off and still produce more than Britons do in a week. The Economist, Mar 14th 2015

The UKs woeful productivity continues to enliven headline writers and prompt many discussions as to its cause and means by which it may be improved. While productivity may be a valuable target to improve, it is perhaps crucial to consider what such improvements would look like and how wider areas of public policy many need to be reformed to support it.

Productivity could be significantly improved on paper alone by encouraging employers and workers to only use the time required for a task to do a task. As a problem this is systematically encouraged through the use of zero hour contracts and the working tax credits propping up the low paid work force. How? The zero hour contracts allows the use of extra staff rather than systems or procedures to take up the slack. While successful in the short term it does so at the cost of productivity and at danger of exposing the business to more efficient competitors. The fact that a significant portion of the cost of the is additional zero hour employee is born by the state through in work benefits only sustains this practice through the reduction in employer cost.

The nature of the productivity measure requires the creation of as much value, in as little time, by a few people as possible. Consequently a high productivity work force could be free to choose increased leisure and family time, at a potential saving to both health and social care budgets, or the ability to consume more to the benefit of GDP but at the cost to the environment. Which ever outcome is sought it may require a redefinition of the appropriate use of time within both public and private space.

Government should seek to expand on the work of the working time directives and use it to prompt more effective and productive use of individual time. Simplistic policies such as outcome rather than time defined metrics should become the norm in both employment contract and also benefits entitlements. With the reward for completed tasks being the redemption of time as well as renumeration. Such policies will clash with business growth focus targets but may prompt growth in other areas instead a benefit to GDP.

These policies would not however resolve the more systematic problems of pointless work, being done as slowly as possible due to the need to sacrifice a number of hours so as to justify the level of renumeration individually required, perhaps the root cause of low productivity.

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