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December 07, 2017

Comments

Carol

On a par with Senator Graham claiming that people who work for a living at shrinking wages aren't saving money because they are spending it on wine, women and song (I suppose the women are spending it on wine, men and song, but in Graham's world, there are no women except those who can be bought).

Dipper

just wondering what the measure of Stephen Hawking's productivity is ...

e

I read PH as saying: in practice our welfare reforms/ Universal Credit look to be embedding low wage low productivity into our economy. Something to be extremely proud of ?

aragon

Let me commit heresy, snd suggest productivity is not that desirable when it comes services.
People need to have the time to address your problems (e.g helpdesk).

Amazon are capturing efficiency when it comes to retail, or at least the warehouse, and like Uber will employ anyone with a car for the delivery (people or parcels).

Delivery by drone would increase productivity while reducing employment as would self-driving deliveries.

As for the disabled they can be as productive as anyone else as the real gains are in machine productivity (automation).

This is where Economists get it wrong, Amazon may be good for productivity in retail, but has an undesirable effect on wages and employment.

The productivity we seek, and automation will give is in Productivity in tangable goods. Productivity in services is called under or un-employent.

Spreadsheet Phil's explanation works less well in the North where disabled participation is lower as is productivity.

The availability of cheap labour is used to substitute for investment in capital equipment (new machines). Cheap Labour results in a slump in productivity as does financialisation.

Productivity is beneficial when applied to tangible goods (more stuff), and Economists are missing the huge jump in productivity as per 'Humans Need Not Apply' on Youtube.

Which may express itself in unemployment for the unskilled.

Blissex

«for example of disabled people ... may have had an impact on overall productivity measurements»

Note the weasel words "for example", "may have had". Our blogger has proved that the example is correct as is possible that 0.3% of the missing "productivity" was due to employing disabled workers.

But it is also possible to look at "overall productivity measurements" being somewhat off, for example not only because of the usual confusion between GDI and GDP, but also because they may be "overestimated".

This graph of electricity consumption by UK region since 2005 by a commented on another blog perhaps is relevant:

https://uploads.disquscdn.com/images/d95944777bd2fcb316e937ca45e2207bbe35b040eb9d3910a1a6589df00a3b2a.png

Electricity consumption , which has increased for decades pretty linearly with GDP, suddenly has become "detached" from GDP, and is falling while GDP is growing, since the early 2000s in some EU countries:

This spreadsheet table 4:

http://ec.europa.eu/eurostat/statistics-explained/images/b/b5/Electricity_production%2C_consumption_and_market_overview_YB2017.xlsx

Shows a graphs with a remarkable fall in electricity consumption in some countries like UK and Italy in the 2005-2015 period. This is from Eurostats 2004-2015 for all electricity consumption:

https://imgur.com/a/KXV5O

and this is for household-only electricity consumption:

https://imgur.com/a/ckDRD

In this report on UK energy consumption there are a number of interesting graphs, fgor example these two on total energy consumed by type and sector 1970-2016:

https://imgur.com/a/lFpys
https://imgur.com/a/GWMwr

As other graphs show efficiency of energy consuming devices has improved since 1970, but also obviously something broke a few years past 2001. For example domestic and energy energy consumption started falling even before 2008.

Physical output and productivity depend a lot on energy input...

aragon

"obviously something broke a few years past 2001"

https://www.ofgem.gov.uk/electricity/retail-market/gb-electricity-retail-market

"Full competition was introduced into Britain’s electricity retail market in 1999. Since then domestic and non-domestic consumers have been able to shop around for their electricity supplier."

Monopoly profits extracted especially from the Transmission network.

Blissex

«Monopoly profits extracted especially from the Transmission network.»

That's a probably good point, and for the UK it has contributed a lot of unnecessary complication, but there was a general inversion of the line of tendency towards an increase in electricity consumption in parallel with an increase in GDP post-2001 in many countries.
I suspect something quite fundamental has broken. Some of the possibilities:

* We never got out of the 2001 recession.
* A good chunk of first-world country economies has moved to China and India.
* Various governments have aimed strategically for lower GDP and thus energy imports, disguising that with a crazy debt boom.

None of those things are good for "producitivity" or actual, instead of fake, GDP-per-median-worker.

PS: a lot of Economists look at aggregate GDP, some better ones look at GDP-per-head, not many look at GDP-per-employed-worker or GDP-per-adult-18-to-65...

Nanikore

Where are Hammond's idiotic conclusions coming from - HM Treasury?

Blissex

«* A good chunk of first-world country economies has moved to China and India.»

Well it turns out that sharp inversion of a century-long steady increase in electricity consumption in the UK (and Italy and other first-world countries) happened soon after the entry into the WTO of China, and roughly at the same time as a very visible surge in electricity consumption in China and a huge increase in net chinese exports:

http://www.euanmearns.com/wp-content/uploads/2014/06/china_energy_consumption.png
http://www.euanmearns.com/wp-content/uploads/2014/06/china_trade_balance.png

The WTO entry of china happened in December 2001, and it took only 1-3 years for the sharp change in trends to happen.

Perhaps this had a much bigger impact on reported "productivity" than a small number of disabled people joining the work force.

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