Home > Uncategorized > Robert Peston on Uk productivity. Is he right?

Robert Peston on Uk productivity. Is he right?

uktv-lorraine-live-robert-pestonI sometimes have mixed feelings about Peston’s analysis on many matters but he is an effective and important communicator. More than anyone else in the uk, he would be first port of call for many wishing to understand economic arguments

His latest piece on uk productivity did slightly leave me questioning a few of the points he has made. Firstly

On the basis of the figures published on Wednesday, if the productivity trends of 1992 to 2007 had continued from 2008 to the end of last year, output per job would be 15% higher than it is, and output her hour would be 17% higher.

Which means, all other things being equal, each of us would be paid 15% more in total, and 17% more for each standard shift we put in.

Surely not? Productivity certainly does not translate into to wage increases. This is simplistic frankly because if competitors are increasing productivity at the same rate (technology being the driver in most instances) then you are only keeping pace with all the consequences that entails

2. Since the crash, too many lame duck firms have been kept afloat, under pressure from politicians, preventing the necessary re-allocation of capital from low-productivity firms to better ones;

Really? Lets look at our competitor economies again. Only the USA has such liberal insolvency laws. The capability for businesses to fail and start up again is far greater here than in most nations

3. As a nation we’re lousy at innovation and we don’t have enough highly skilled people (compared with Germany, for example);

This has a whiff of the “manufacturing fetish” about it with the obsession that the only real innovation is in hard produced goods. This is nonsense and whilst there are few stats to hand, the Uk is certainly not seen as lacking innovation in services and many areas such as software and hi tech. Quite the opposite

4. The City is too short-termist and is hopeless at investing in winners;

Come on now. The first part could be justified perhaps but the second is simply lazy journalism

From the Uk’s leading economics journalist you would hope for better

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Categories: Uncategorized
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  1. June 8, 2015 at 1:35 pm

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