Adam Blunden investigates whether we can solve the
productivity gap and asks what the consequences might be for inflation.
At the time of writing, the Bank of England had recently released its quarterly Inflation Report along with the decision and minutes of the month’s MPC meeting. The report clearly forecasts a tendency for CPI inflation to increase in the next four years, assuming nominal base interest rates and asset purchases remain constant, however this increase is likely to be very well controlled to avoid exceeding the 2% target. Aggregate demand in the economy is growing steadily at rates similar to those from before the recession of 2008-9, rising by 0.7% in Q2 2015, up from 0.5% in Q1 2015. Consumption remains the largest component of aggregate demand, and supported by increases in nominal income through both increased employment and wages, very high consumer confidence, and real incomes being boosted by falling prices in many costs of living such as fuel, food and selected imports, this is expected to continue, although is likely to depend on the variation of retail interest rates offered by commercial banks.
German productivity is also
an interesting case to consider. The gap in productivity between the UK and
Germany has widened in recent years[iii]
, yet German workers work for considerably less time on average[iv].
There is an inversely proportional relationship between hours worked and GDP
per hour worked in OECD countries, suggesting that as productivity increases, the
increase in output may cause an increase in pay, allowing the worker to
increase their leisure time in maintaining a steady income.
One perfect case study exists-
Cambridge[x].
Co-operation between the university and city council created the science park,
home to 68 individual firms, the vast majority in the quaternary sector-
involved in research and development, a major boost to UK productivity. The
multiplier and accelerator effects as a result of this are instrumental to the
city’s growth. The barrier to any new city attempting to follow this path is
clear- an 800-year-old, world-renowned, research-rich university. An
alternative option could be in utilising one of the UK’s new garden cities, Ebbsfleet,
as a prototype for a new regional hub. Located in the south-east on the
high-speed rail line to the Channel Tunnel and the M2, minimal infrastructure
is required apart from developing facilities such as business parks, since
homes and an entire modern, environmentally-friendly community are already
going to be built. Firms can be encouraged to the UK with this model, and the
promise that similar hubs will be built, potentially leading to the spread of
regional hubs further north, possibly along HS2, giving time for Ebbsfleet and
Cambridge to be compared and the idea of regional hubs to either be scrapped or
optimised and spread across the country. Research and development accelerates
innovation and productivity- but government needs to let firms work rather than
attempt to influence how they work.
In order to
apply this to productivity, we should consider the implications of increased
employment from previous JSA claimants. The government may encourage firms
using various policies such as tax breaks or returning National Insurance
contributions to hire more workers than needed to reduce the unemployment rate,
decreasing productivity as more hours are worked for the same level of output
required by the firm. Alternatively, claimants could be employed in
skill-appropriate roles as depicted earlier- but the output potential of a
worker, not nationality or length of unemployment, should determine which
workers are employed, to ensure productivity is maintained or improved. Government
intervention to increase employment can negatively affect productivity- the
choice of which policy objective to follow is a value judgement.
The
inflationary pressure created by an increase in investment and government
spending should be offset by the fall in production costs for these businesses,
following the strong German innovation-based economy rather than the Chinese
high-output, low-cost economy. German innovation is supported by the EU in several
sectors with tax breaks and other aid through a friendly relationship, so
greater partnership with the EU will almost certainly help with this project as
the UK seeks international firms to locate in the new hubs. The location of Ebbsfleet in Kent, the
closest UK county to the EU, certainly helps with this, although if the
proposed referendum in 2017 has the result of the UK leaving the EU, then the
entire solution will become less effective unless trade agreements can be made.
The effect of an interest rate rise on this solution is likely to reduce the
availability of credit for firms- which if inviting small yet innovative
start-up businesses akin to London’s Old Street roundabout technology hub could
be a deal-breaker, as well as increasing the cost of living for those in the
new settlements. This solution is a long-term solution to a long-term problem-
so the impending interest rate rise is unlikely to have an effect on a project
that could be delivered in several years’ time. However, in order to encourage
the types of businesses that are vital to improving productivity through
innovation, the economic conditions must be suitable, from either the base rate
set by the Bank of England or fiscal policies that encourage these firms to
locate in the UK. Therefore, above all other factors, the timing of this
solution will be vital to its success.
At the time of writing, the Bank of England had recently released its quarterly Inflation Report along with the decision and minutes of the month’s MPC meeting. The report clearly forecasts a tendency for CPI inflation to increase in the next four years, assuming nominal base interest rates and asset purchases remain constant, however this increase is likely to be very well controlled to avoid exceeding the 2% target. Aggregate demand in the economy is growing steadily at rates similar to those from before the recession of 2008-9, rising by 0.7% in Q2 2015, up from 0.5% in Q1 2015. Consumption remains the largest component of aggregate demand, and supported by increases in nominal income through both increased employment and wages, very high consumer confidence, and real incomes being boosted by falling prices in many costs of living such as fuel, food and selected imports, this is expected to continue, although is likely to depend on the variation of retail interest rates offered by commercial banks.
The newly-installed
Conservative government has been reacting to this news in the best way it can-
promoting its own (now-clichéd) phrase- the long-term economic plan, and how it
is working to improve the economy for the people of the UK. Their definition of
economic improvement is certainly up for question, but is surely a topic for
another essay. The first Budget of the new government laid out the first year’s
fiscal intentions- the most headline-grabbing being the introduction of a
living wage, but with other significant policies such as a reduction in the
rate of corporation tax to 17% in 2017 and 18% in 2020, £3,000 removed from the
National Insurance contributions made by employers, and increasing the personal
income tax-free allowance to £11,000 and the higher rate tax threshold to £43,000
all make this budget key for attempting to improve the economic outlook (in
terms of GDP at least) of the UK as a whole.
Outside of the UK, one of
the fastest growing economies, China, looks set for a slowdown across labour
(possibly as a result of the children of the One-Child Policy now reaching
working age, leading to a decline in those of working age in the economy),
capital (China has seen its debt climbing to 250% of GDP[i]
through the most recent financial crisis- allowing it to keep growing but
leaving it with huge future burdens) and productivity (largely fuelled by
labour falls and rapid wage rises in line with the cost of living[ii]);
initial signs of these fears were confirmed in the stock markets on `Black
Monday’- Monday 24th August 2015, when the Hang Seng fell by 5.17%,
and the Shanghai Composite Index fell by 8.52%- its worst single-day fall in
eight years. The most reasonable cause is appropriated to the government’s
recent decision to devalue the Yuan in an attempt to boost economic confidence
in the markets (through making exports cheaper), although the government’s
abilities in pretence were weakened by poor results from industrial growth,
which sent other markets relying on Chinese industry spiralling in addition to
the country’s own. The foreign markets recovered, but China’s are still
suffering. Economic confidence in the country is weakened, but for productivity
to improve there need to be significant structural changes such as automation
and greater research and development, reducing the dependency on a decreasing
labour force and repetitive investment on credit.
 |
| Copyright The Economist Newspaper Limited, London (September 24th, 2013) (used with license) |
There is also the
possibility that increased pay will increase the chance a worker will work
longer hours to maximise income, although the motivation is also to maximise future leisure time (e.g. for a pension or large saving
target). Increased hours may lead to inefficiency and a fall in productivity,
while a worker wanting to maintain a steady income will work at the same level
or possibly harder in the shorter period of time, maintaining or increasing
productivity. Research and development is also key to German productivity, with
17% [v]more
workers in this sector than the UK, often spurred on by a more friendly
relationship with the EU and tax relief encouraging investment.
 |
| Copyright The Economist Newspaper Limited, London (December 24th, 2013) (used with license) |
The UK’s productivity
problem is generally assumed to have arisen as a result of the recessions
between 2007 and 2010. Figure 2a clearly shows that productivity has, on
average, remained one or two index points below 2008 levels since 2008, whereas
the trend line assumed that productivity would continue rising. This change
fits the trends for GDP and employment in Figure 2b until mid-2011, when there
was a significant decline in productivity by 2 index points on average. While
the economy recovered from the worst financial crisis in recent times,
productivity did not.
The cause of Britain’s troubles
has been up for debate by economists and politicians alike for over 5 years,
and still no-one seems able to draw a solid conclusion. Some argue businesses
found it hard to make workers redundant following declines in demand,
effectively becoming overstaffed for the output they were producing. When
demand increased, the workers continued to produce as if they were overstaffed-
at a lower output than possible- reducing productive efficiency. Alternatively,
theories have centred on the idea of family-run firms hiring on relationship
and not productivity or efficiency, the use of cheap and inefficient labour, or
the financial crisis reducing access to loans for businesses, reducing
investment and reducing the long-run ability of the economy to expand.
I therefore
propose three categories of problems and possible solutions to the productivity
puzzle. The first of these categories relates to government policy decisions,
such as those outlined in the most recent budget, the most groundbreaking of
these being the introduction of the National Living Wage, which could be both a
help and hindrance to UK productivity. As already suggested, increased pay may
lead workers to work longer hours, which should increase the output, and thus
GDP of the UK economy. However, there are a number of points to consider, not
least the fact that productivity may fall as a result of this change. John
Hicks put this argument most succinctly, reasoning that if longer hours were
worked, employees lose energy and produce less output.[vi] The health of workers is
likely to suffer, increasing the strain on the NHS and government spending, as
well as leading to the deterioration of the workers’ skills over time,
exacerbating the decline in productivity.
It is good
then, that this is not how this was presented by the Chancellor. The
almost-jovial tone with which he announced this policy- `Britain deserves a pay
rise[vii]`-gave the impression to
Britain’s media and citizens that they were working hard and deserved a reward.
This gives credit to the latter of the earlier theories- that an increase in
pay would allow workers to work for fewer hours while maintaining the same
income. This is one of the simplest and easiest ways to try to raise
productivity- reducing the hours worked, which in the reverse of the argument
above should have a smaller effect on output, so output per hour increases. However,
does Britain really deserve this pay rise? If we treat the entire economy as a
single firm, is giving all of the lowest-paid employees a pay rise more
effective than performance-based pay? The problem is that the UK economy is so
diverse that it is not possible to treat the entire economy as a single firm-
performance means so many different things to different firms, that attempting
to force a method of pay on firms would be a political disaster. The minimum
and living wages aren’t necessarily meant to provide motivation or encourage
rest- they are there to sustain a reasonable quality of life and avoid employee
exploitation, but political spin can have unintended consequences.
The
government could therefore need some policies that are intended to influence
productivity. A possible new fiscal policy could be an adaptation of another of
the Chancellor’s clichéd phrases- the `Northern Powerhouse`. The intention of
this government is to create a belt of cities in the north of England that when
combined can rival the economic juggernaut of London. It plans on achieving
this in several ways- the promotion of Manchester as the `capital of the north`
by developing industrial parks such as MediaCityUK, as well as beginning to
devolve powers northward- starting with Greater Manchester’s control of its own
NHS services. This is likely to be helped by electrification of Trans-Pennine
rail routes in an attempt to cut journey times and make the belt more
attractive to firms, as well as attempting to reduce road congestion and air
pollution, making the region more pleasant, dispelling the image of the old
industrial, coal-mined north.
 |
The MediaCityUK site. Courtesy of the University of Salford
(image used under Creative Commons license)
|
Some regions
(particularly in Tyne and Wear[viii]) argue that the
benefits will be so skewed that Manchester will simply mirror London and the
inequality surrounding it on a smaller scale. I tend to agree with this
sentiment, in that it cannot be possible to link several far-flung cities with
an improved rail line (currently Liverpool to Newcastle can be achieved in 2
and ¾ hours, falling to just under 2 hours in aspiration), build some new,
equally spread infrastructure for each city and expect economic performance on
par with the second most competitive global city in the world[ix]. If the goal really is to
compete with London, then the expectation must be that funding will be skewed
towards the new `capital`- however misguided the intention. Productivity should
improve for those in the north as the improvements in infrastructure should
improve logistics and increase the provision of services for firms, increasing
output, as well as the increase in labour mobility allowing more suitable and
more productive workers to be selected from across the region. However, this
still leaves a large proportion of the UK (and all home nations apart from
England) without an economic hub. In order to
boost productivity, the UK needs more individual economic hubs-
self-functioning centres of commerce, research and development that do not
depend significantly on outside infrastructure.
 |
Cambridge Science Park. Courtesy of cmglee
(image used under Creative Commons license)
|
It is also
possible that the productivity gap could be solved by fixing the structural
problems in the economy. The most commonly referenced problem in Britain is the
lack of labour mobility- most often geographical, as many parts of the labour
force are unwilling to leave their home regions to find work, resulting in
either under-qualified workers being unable to produce the optimum level of
output for the role they hold, or underemployed workers producing the optimum
level of output for the role, but who would be able to produce more output in a
different role. This is a very simplified form of the problem Britain and the
world faces, in that the whole world really is going to university, and in
developed countries this has led to a sense of entitlement, where an excess
supply of graduates and lack of supply of graduate-level jobs results in
disequilibrium. The resource of graduate labour is not allocated efficiently-
so labour productivity is, in theory, lower than its potential.
In the UK
labour market as a whole, the excess graduates attempt to find work at
lower-qualified levels, although the search theory of unemployment tends to
suggest that it may take some time for a graduate’s expectations to fall in
line with a job vacancy. An increasing proportion of graduates are now choosing
to take part-time work or enrol in further study. While both the graduate[xi] and general [xii]employment rates have
increased from March 2014 to March 2015, the impact of migration on the UK
labour market should be taken into account. From 1993 to 2013, the share of
foreign-born workers in the UK increased from 7.2% to 15.3%.[xiii] While this includes
those who were born overseas then migrated to the UK as children, the average
age of UK immigrants was just above 26 in 2014[xiv]. Some may be asylum
seekers or refugees- the Home Office received 25,020 applications in the year
ending March 2015[xv]-
a mere 3% [xvi]of
UK immigrants. This suggests that the vast majority of UK immigrants are
economic- and therefore increase the size of the labour force.
The
proportion of foreign-born workers is increasing most significantly in
low-skilled jobs- the largest being in process operatives (e.g. logistics and
food production), increasing from 8.5% in 2002 to 29.3% in 2013[xvii]. These low-skilled
roles (such as those in manufacturing of clothing or domestic service) are typically
low-paid roles in the secondary or tertiary sectors, requiring few
qualifications and more experience-based recruitment, however basic. These
roles are attractive to migrants, offering a stable rate of pay greater than
the average wage in several origin countries, and enabling the migrant to gain
transferable skills and send remittances if necessary. These roles are less
attractive to graduates as the graduates believe that their qualifications
warrant a higher-skilled or higher-paid job, so the graduates remain
unemployed- and less productive. As the migrants become more skilled, they
become able to take higher-skilled jobs- potentially preventing graduates from
taking graduate-level roles. This isn’t necessarily a bad thing, apart from the
fact that a graduate’s qualification may now lead to lower output for the
economy- but reducing job prospects for graduates could just be a potential
solution. The key is making sure potential productivity is always achieved at
every level of skill or pay- as well as allowing workers to appreciate or
depreciate as they become more or less productive.
This solution
is very radical, in that I suggest the education and employment systems are
combined. The situation detailed above suggests that high-skilled workers might
not become employed in a job which harnesses their potential level of output-
affecting productivity. The converse can also be true- similar to the situation
in family businesses depicted earlier where staff may be chosen for their
relationship to the firm rather than how suitable and qualified they are for
the role and the firm is less productive as a result. A lower-skilled worker
could rise through a firm to a job that requires more skills then they have- so
output and potential productivity in that role is lost.
The education
and employment systems are entirely separate: you learn for qualifications, and
apply for jobs which may or may not use them. If the education system offered a
view to employment, either through strengthening the currently weak careers
advice in state-funded schools, or by ensuring young people stayed in
education, employment or training for as long as possible (an ideology already
put in place by this government). This is a good solution for building skills
with a view to employment, but what would be better is if more firms took an
active role in education- not so much as operating schools, although the
actions of MEI in offering their own A level maths qualification[xviii] are a strong step in
the right direction. The government could offer incentives to local firms in
exchange for offering career-based courses in schools alongside typical
qualifications, with the intention that pupils who do well could move directly
from education into employment as the most suitable and productive candidates,
reducing recruitment costs for firms and government spending on social
security, as well as maximising productivity for local business and ensuring
that labour mobility has less of an influence. However, more-able pupils should
always be encouraged to continue to university or into apprenticeships for more
technical roles.
Perhaps the
most cost-effective for a deficit-reducing government, changes could be made to
working life and the workplace itself in order to improve productivity. This is
the realm of nudge behaviour- adjusting small conditions in order to have a
more significant effect. Strategies such as loss-aversion could motivate employees
to work harder, as was proved in a Chicago research paper in July 2012[xix]. The researchers used
teachers to measure the effect, since the output could be clearly measured
through the test scores of the students. Two sets of teachers had the same standard
pay, and one set was given the traditional end-of-year bonus based on student
performance, but the other was given the bonus at the start of the year and
asked to pay back as much as required at the end of the year. If two teachers
had classes performing equally, the bonus would be equal. The teachers who had
been given the bonus early saw increases in the test scores by `an equivalent
of increasing teacher quality by one standard deviation`. The other set had
statistically insignificant results. The output of the loss-aversion set had
increased, and the hours they spent working outside of teaching were lower than
the other group. This suggests loss-aversion is a very credible method of
motivation.
Loss aversion
may work well for medium-to-high-skilled jobs such as teaching, where the wage
level is able to facilitate a bonus and performance-related pay scheme, but in
lower-skilled roles where the National Minimum Wage is paid, an employer would
have to allow an effective pay rise in order to introduce a bonus system. On
top of the new National Living Wage being phased in over the next couple of
years, this would cause significant upward inflationary pressure, and although
many employers may set the wages of employees in the current NMW-to- future-NLW
bracket to only increase to the NLW, thus giving a smaller pay increase (and
more demotivation) than those who were on the NMW, the number of workers who
could use this system will fall significantly.
Alternative
nudge ideas could also be considered. The Behavioural Insights Team, a
part-public-owned social purpose company, experiments with behavioural
economics in public policy. A recent experiment was commissioned by the
Department for Work and Pensions to attempt to get more people back into work
through Jobcentre Plus in trials in Essex[xx][xxi]. Making claimants make
commitments to future goals as part of a daily, not weekly, routine in an
encouragement-based system worked better than the previous control-and-restrict
methods- the off-flow rate from benefits to employment was 4% higher if
claimants were encouraged, and on an even more positive note the wellbeing of
staff also improved. Other experiments include the use of repeated SMS prompts
to remind claimants of an appointment or job fair they were booked on to or
might be interested in- attendance increased by over 4%, while including
personal information or a good luck message increased attendance even more. All
these measures should have the effect of increasing employment, if roles are
available.
 |
Courtesy of J J Ellison
(image used under Creative Commons license)
|
With each of
these possible solutions, both those existing and proposed, there will be
impacts beyond productivity, and beyond the UK’s economy. I shall evaluate
these policies on three key criteria- the international impact, equity, and the
effects on inflation. Introducing the NLW should increase the average wage in
the UK, which may well increase immigration as working in the UK becomes more
attractive compared to other developed countries. However, the costs of
production for firms are likely to increase significantly- increasing the cost
of exports and likely decreasing the balance of trade. Developing more regional
hubs should have an influence on foreign direct investment- but innovation must
be already present to encourage research and development to improve
productivity, and not simply production or manufacturing. Combining education
and employment will have less of an international impact, although over time it
should make UK labour more attractive to the global labour market, which could
cause the wages for some roles to rise in other countries to attract British
workers (this is, however, a very long-term view). Introducing loss-aversion
pay or nudging JSA claimants back into work should have no external impact.
Introducing
the NLW is equitable only if the pay of workers above the NMW increases in line
with it, which employers have a choice to do- but with this cost of production
rising significantly, some smaller firms are unlikely to want to do this, under
a pay increase which may already have threatened their viability. Developing
more regional hubs will only ever deliver benefits to that region and the
surrounding area; although as these spread the improvements in infrastructure
should spread across the country as the hubs become the economic focus points
of their regions. Combining education and employment by using local firms will
restrict the career-based courses on offer; however this could be justified by
initiating the scheme in areas of low labour mobility such as the north-east of
England or Northern Ireland. If loss-aversion pay is introduced in some jobs,
even though the rewards should be the same for the same levels of output, there
may be a psychological impact on workers who feel under pressure to perform or
pay the money back- some workers may even keep the bonus for themselves and
leave the job- increasing the risk of extra costs for these firms. Apart from
the unemployed applying from Jobcentre Plus now being more likely to be
employed by attending more, this nudge incentive should be fairly equitable.
Inflation
remains the key topic of this essay, since in the coming months both the Bank
of England and Federal Reserve are expected to make decisions to raise base
rates after long periods of low rates with no change. Introducing the NLW,
while mainly a boost to living standards, is likely to have a significant
impact on inflation in an attempt to restore steady 2% inflation to the UK
economy, after cutting rates to 0.5% for several years has only resulted in low
(and at one point, negative) inflation. Firms are likely to increase their
prices as a result of the increasing cost of labour, although will be aided by
falling rates of corporation tax and reduced NI contributions for small
businesses. The development of regional hubs will be a boost to aggregate
demand- creating demand-pull inflation, but the hubs are likely to offer
reduced costs for businesses in order to make the hubs attractive, so cost-push
inflation could fall. Combining education and employment will provide a small
boost to demand-pull inflation with the increase in government spending, although
the counterargument is that the scheme will reduce government social security
costs, offsetting the cost of implementing this scheme. Increased employment as
a result of nudge behaviours should increase consumption and demand-pull
inflation, while adjusting pay schedules is unlikely to create any inflationary
pressure.
The most
important policy indicator for the Chancellor currently appears to be the
government budget deficit- several years of austerity are promised to result in
the UK holding a budget surplus by 2020; however this is only given a 55%
chance of happening by the Office for Budget Responsibility[xxii]. Introducing the NLW
may have an impact on productivity, but it is unintentional and could even
decrease productivity if workers become inefficient. Creating regional hubs is
an effective supply-side solution to a long-term problem, encouraging
productivity-enriching research and development that could give Britain’s
economy a more innovative image and make it even more attractive to international
firms- however the time periods for these to spread across the country are
likely to be long, so some regions may see little benefit for years or even
decades. Combining education and employment will have several positive local
impacts, but for the economy as a whole this is a very small solution to a
macroeconomic problem. The nudge incentives, while a very cost-effective
solution to motivational problems in individual firms, are simply not
applicable enough to the whole economy, and on their own are unlikely to have
significant enough an effect.
In my
opinion, the policy which will have the most positive effect on productivity
and output in the UK economy is the development of regional hubs as opposed to
two competing economic centres of London and the `Northern Powerhouse`.
Creating a network of self-sufficient settlements capable of facilitating
innovation will attract firms to the UK and increase the concentration of
innovative firms in these areas, potentially allowing firms to work together
more easily and increasing their output even more. The potential for the
multiplier effect in these areas should develop settlements with high living
standards which can improve the health of their inhabitants (and decrease NHS
pressure). Attaching the first experiment to a government project already
agreed to reduces the risk should the project fail- however given the high
quality international infrastructure links at Ebbsfleet this is unlikely to
happen.
 |
| Courtesy of Katie Chan (image used under Creative Commons licence) |
[i]
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[ii]
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2014) (http://blogs.wsj.com/economics/2014/09/01/chinas-productivity-problem-drags-on-growth/)
[iii]
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2015) (http://www.theguardian.com/business/2015/apr/01/uk-productivity-growth-is-weakest-since-wwii-says-ons)
[iv]
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[v]
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[vi]
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[vii]
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[viii]
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north-east (last accessed September 2nd, 2015) (http://www.ft.com/cms/s/0/52d121f2-2fc5-11e5-8873-775ba7c2ea3d.html)
[ix]
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2015) (http://www.economistinsights.com/sites/default/files/downloads/Hot%20Spots.pdf)
[x]
The Economist: Getting to Cambridge (22nd August 2015) (http://www.economist.com/news/britain/21661670-political-philosophy-britains-most-successful-city-getting-cambridge)
[xi]
GOV.UK Graduate Labour Market Statistics (last accessed September 2nd
2015) (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/432873/BIS-15-304_graduate_labour_market_statistics-January_to_March_2015.pdf)
[xii]
ONS Labour Market Statistical Bulletin (last accessed September 2nd,
2015) (http://www.ons.gov.uk/ons/dcp171778_412021.pdf)
[xiii] BRIEFING: Migrants in the UK Labour Market:
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[xiv]
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[xv]
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[xvi]
Calculated from ONS Migration Statistics Quarterly Report (last accessed
September 2nd, 2015) (http://www.ons.gov.uk/ons/rel/migration1/migration-statistics-quarterly-report/august-2015/stb-msqr-august-2015.html)
[xvii]
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September 2nd, 2015) (http://www.migrationobservatory.ox.ac.uk/sites/files/migobs/Briefing%20-%20Migrants%20in%20the%20UK%20Labour%20Market_0.pdf)
[xviii]
MEI Syllabus (last accessed September 2nd, 2015)
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Acronym Index:
EU: European Union
GDP: Gross Domestic Product
HS1: High Speed One, rail line from London St Pancras
to the Channel Tunnel
HS2: High Speed Two, proposed rail line from London to
destinations in the north
JSA: Jobseeker’s Allowance
MEI: Mathematics in Education and Industry
NHS: National Health Service
NI: National Insurance
NLW: National Living Wage
NMW: National Minimum Wage
OECD: Organisation for Economic Co-operation and
Development
SMS: Short messaging service
Notes:
1. While
productivity in its simplest definition is the output generated measured in terms
of the input used, several references in this essay refer to labour
productivity (output per hour worked per unit of labour) or productivity of
another factor such as capital or land.
2. This
essay was written with the aim of being economics-oriented; however I think over
time some areas strayed more into general interest politics and/or economic
journalism, with more focus on case studies and evaluation than quantitative
analysis.
3. Final
word count: 4727 words
Self-evaluation:
·
I wanted to include more in terms of
quantitative data like in the opening paragraphs from the ONS, but any data I
found was not relevant enough to my arguments
·
There may be some ambiguity/ `waffling` in
several places, which I tried to avoid but in several places couldn’t
·
If I wrote this essay again, I would make a
greater emphasis on the international aspect of productivity throughout the
essay, not just an opening comparison.
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