"tech" to London's media does not mean what you or I would call "tech".
Possibly because they're all freelance now, and so have no idea what they're doing.
Nathan Barley, the insufferable "self-facilitating media node" of Charlie Brooker's TV series, may be a prime culprit for Britain's lack of productivity growth. Not Barley, personally, but as the number of self-employed has risen – particularly in media and tech – real output per hour has remained in the doldrums, notes Dhaval …
Oh, that's one of the things they do do - ask for updates
Also, they ask if everything else under the sun is connected to this problem - and you have to explain why the repairs being carried out on the ISS are unconnected to a local routing issue
They also suggest possible root causes without any shred of evidence or bothering to do any problem determination - again you have to "prove" what they are saying is rubbish whilst also trying to some proper PD
And then every hour, or so, let's have a conference call to review progress
Thank deity it's time to go home....
Oh, and I forgot, when you do find time between the interruptions to understand & resolve the issue, they all think they have done a wonderful job!
Time for beer
All these claims about falling or stagnant productivity don't convince me, even though that's what the official stats are very clear on.
I accept that our manufacturing sector is smaller and less automated than Germany, but all of this "falling productivity since 2009" seems to ignore the evidence of my own eyes and common sense. Back in 2009, the economy virtually stalled thanks to the financial crisis, but employers were generally hoarding labour - so productivity should have been fairly crap. Since then we've now got the highest levels of employment ever in the UK, we have the mother of all building booms going ahead, we've got a whole clutch of enormous infrastructure schemes underway, we've seen major employers in several sectors automating (eg retailers moving to automate the checkout process), I'm aware of several sectors actively slashing their workforce despite sector sales holding up (eg energy), the automotive sector has spent billions on additional automation.
Personally, I think there's something in the official method of calculating productivity that is flawed. For international comparisons it wouldn't be the first time - the methods used understate manufacturing productivity if a UK company outsources (say) the cleaning, which immediately becomes a service sector output, and therefore manufacturing productivity appears to decline. In locations (eg Germany) where outsourcing hasn't been embraced with as much enthusiasm, the cost of cleaning the factory and offices is part of the value content of each car.
I wonder if the difference is down to some fundamental mis-handling of off-shore services, or lack of data that means ignoring the output of small contractors? I'm not suggesting that we have the levels of output to match Germany, but according to the data we're behind the French, with their 9.7% unemployment, over 1 in 54 of under 25s unemployed, and their shorter average working hours than the UK.
"For international comparisons it wouldn't be the first time - the methods used understate manufacturing productivity if a UK company outsources (say) the cleaning, which immediately becomes a service sector output, and therefore manufacturing productivity appears to decline."
Surely if this were misrecorded the productivity would appear to have risen in that a given manufacturing output would have appeared to have risen as the product had been produced with less input hours.
A more feasible explanation in manufacturing is that labour costs have been held down so that it makes more sense to employ people to do a job less efficiently in terms of time than to invest in new machinery. And as interest rates eventually rise it will seem even less attractive to invest in machinery.
A more feasible explanation in manufacturing is that labour costs have been held down so that it makes more sense to employ people to do a job less efficiently in terms of time than to invest in new machinery.
That's a theory, I've worked on capital investment in the automotive sector, and in practice, employing anybody even on minimum wage is bloody expensive because you need to factor in the employer's NIC, the pension cost, holidays, sick pay, training, shift pay, cost of hiring, payroll, HR support, workstation costs, tools, rework costs, everything from canteens to prayer rooms etc. The case for automation does take account of saved wages, but it is rarely driven by a comparison of simple labour costs against the machine's cost, because there's other often more important drivers, like the automated links to (say) logistics systems, the usually much better quality and very high availability of automated production. With interest rates having been so low for years now, the fact that wages have been held down is immaterial because the cost of money has been so low.
Which is partly why I don't concur with the official interpretations. Consider what it means if productivity has stagnated for the better part of a decade? It says that in that time, major manufacturers like JLR, Honda, Toyota, Nissan, Rolls Royce, Airbus, JCB, down to medium-large sized outfits like Worcester Bosch have either failed to invest in any incremental automation, or their automation investments have in aggregate terms completely failed. And likewise, all those automated tills have apparently done nothing to improve productivity, nor has the expansion of very lean, low overhead retailers like Aldi and Lidl.
Another thought for the productivity loss - what about the syphoning off of large amounts for the purposes of tax avoidance by the major US tech companies? If Apple, Microsoft, Google and others are saying that they barely make any profit here, and they make oodles in Luxembourg, Dublin, the Channel Islands and so on, then the productivity of a few lawyers and accountant in those places will be phenomenal, and by simple logic, the productivity in the UK has to register as lower.
We really are looking for a more profound, systemic explanation of the data than low wages and under-investment.
"Another thought for the productivity loss - what about the syphoning off of large amounts for the purposes of tax avoidance by the major US tech companies?"
An excellent point. We have created a competitive international market for corporate taxation and are failing to compete because our economy's too big. I suppose we'll have slimmed down post-Brexit and will
be able have to become a tax haven.
"Which is a real bummer for those of use that work in the public sector and so don't actually exist to make money for someone."
That would be service sector, which is different. Productivity is measured by how good a service can be provided at the lowest cost (preferably to high standards too, but we know what "austerity" has done to that)
"If Apple, Microsoft, Google and others are saying that they barely make any profit here, and they make oodles in Luxembourg, Dublin, the Channel Islands and so on,"
Don't believe everything you read in the Guardian.
Taxes are levied, according to international law, not where profit is made, but where value is added. So, most of the value of an iPhone is created in Cupertino, not London or indeed China. Ditto for Google, Microsoft etc. The concept, software design, development, marketing etc. etc. is mostly done in the USA.
So, that's where they are liable for tax. If the USA decides to levy that tax only when the money arrives in the USA, not if its in the Caymans, that's a matter for the US government.
>We really are looking for a more profound, systemic explanation of the data than low wages and under-investment.
You've been given a couple (freelancers who can't 'make' more & low wages). Add to this immigration.
Productivity is (roughly) GDP divided by population. We've added a few million to the population (without whom we'd be up shit creek), so that equation doesn't improve much, even though GDP has risen (a bit).
There may well be an unprecedented level of economic activity going on in the UK, with correspondingly high employment rates, but that doesn't tell you anything about productivity. Productivity is measured in terms of economic output per employee hour, so it's independent of how much activity is going on across the UK as a whole, it's all about the average return of all that activity.
France and Germany generate more GDP per employee hour than we do. We compensate by having more people working longer hours. This does improve our GDP overall, but doesn't improve productivity - indeed, it's often suggested that making people work longer hours may be one of the factors leading to the lower average productivity figures.
but according to the data we're behind the French, with their 9.7% unemployment, over 1 in 54 of under 25s unemployed, and their shorter average working hours than the UK
We're behind the French because of those things, not despite them. Productivity is output per employee hour. Make a bunch of people unemployed and it will generally be the less productive ones who are sacked first. Mostly employ over 25s who are already trained and experienced and your productivity improves. Go home early and you might get less work done in total but the amount of work you've done per hour will probably be higher.
So I don't see any reason not to trust the productivity data. Though there is a very good reason not to see it as the only thing you need to worry about.
There are so many things wrong with how we measure this thing that TBH, it is not worth it.
I was told by one [redacted] that my productivity was based upon the release of something not how good it is, if it works and all the rest. The time spent fixing it is another productivity metric. There was no incentive to 'do it once, do it right' goal. Madness if you ask me.
Then there is the hours worked scam.
You work all sorts of hours getting the job done but the company timesheet system will only let you book 37.5 hours. Not a minute more, not a minute less. So you log all the extra time and take time off in lieu.
But by the time you want to do that the PHB in charge has changed and won't honor the time outstanding. The new one is fearful of his bonus and .... well, it does not take a genius to work out why.
I am so glad that I was offshored (job went to India where they continue to F**k things up) and am now retired and really don't miss IT now.
If someone is treated well where they work then they will be willing to "go that extra mile".
If they think they are just another cog in the wheel and their job could vanish at any time then chances are they will not.
.. some people might be of the "traet em mean and keep them keen" mindset, but if job loss is quite likely, it will not make all the people work frantically so they miss the cut and their colleague gets it in the deck, quite likely to demotivate and people think, well if its not this time then I will go at some later point and so will not bust a gut.
Productivity is $$ produced / worker hour.
You can boost productivity by downsizing and making your wage slaves do more $$ with fewer people.
Or the experts can charge you the same $$ do it fewer hours and work less. The experts have captured the productivity increase but use it to take time instead of the bosses adding it to GDP.
My productivity is busy being absorbed by imbeciles who seem to think I should hand-hold them through developing an application when that's their job and not mine. It's not even my field. I am not a developer.
I can point to *exactly* why my productivity is in the doldrums. Could even make a list of names...
Its tax credits, which have pulled low and medium earners with kids out of FT work and into PT jons with *huge* tax payer top-ups.
A quick scan of my local tonw's FB Jobs' page shows everyone is self-employed selling make-up, dog grooming. Or asking for jobs - 'Looking for 16h work ...'.
I know people who've jacked in FT jobs, pulling in 24k (North), to go self-employed for bugger all. And then get the rest of the money from UK's hard pressed tax payer. They are giving up 38h/w + travel time + cost, to pretned to work for 16h.
Thats where the UK's productivity has gone. The only puzzling thing is why anyone, with a grasp of the UK's tax credit setup, regards it as puzzling.
I think there are a few reasons for the productivity puzzle. Here are some:-
1) Taxation - labour, brains and adding value are taxed (income, NI, VAT) while unproductive hoarding sometimes gets rewarded (farmland subsidies, landbanks). Surely productivity is largely a function of adding value? Massively over-complicated tax system - full of scams, lack of clarity. Replace all taxes with Land Value Tax (LVT) and you'd see an economy fly. Pair with a low rate of Citizens Income to allow people to pop in and out of the labour market as childcare, elderly care, retraining etc dictate.
2) Admin, infrequent tasks - You have to be pretty senior to have any kind of admin helper. There aren't many shared admins who you can just provide your info to and then get on with your real job. Wasting hours on useless timesheet, expenses, booking systems which you have to relearn every time you use. One of the higher ups here does get the admin(s) to print out reports for him though. Everyone else does it electronically - guess who it's optimised for?
3) Training - when systems are introduced with little or no support, achieving tasks - especially if done infrequently wastes your time and often the time of someone who knows a bit more about the system (and may be more experienced and more valuable to the company).
You get to pay no NI, and you can pay yourself a low-tax wage and up to 40k in dividends at 7.5%. And corporation tax is super low for you. That's why we have so many contractors these days. It hasn't added up to much additional productivity because people's skill hasn't gone up; you just pay loads more.
(Having said that, you don't get the crushing pension burden down the road, but then with the removal of defined benefit schemes that's not a problem anyway.)
"You get to pay no NI, and you can pay yourself a low-tax wage and up to 40k in dividends at 7.5%. And corporation tax is super low for you. That's why we have so many contractors these days. "
Let me guess: you've never been a freelancer yourself. You're too high-minded? Or is there some other aspect you don't think you can hack - perhaps you can't take the risk of not landing a contract for a month or six?
Perspective from NL:
I get the impression that in the UK and the US there is perhaps a greater emphasis at the number of hours you spend at your desk than how much you produce. That is unlikely to encourage employees to be productive and the associated resentment/fatigue also won't help. Here in NL (with a higher productivity of labour than the UK) the culture is quite different. Part-time working is also common and valued by many employees as it gives them more time for their family, and may also lead to a higher productivity. One of my customers is currently advertising a job for a software developer and emphasise that they finish work strictly on time (and you get Friday afternoons off).
Note: I've always been self-employed here, so the above is based on what I hear and read rather than personal experience. Incidentally, although the self-employed have to do tasks licking stamps, wrangling computers, etc. which in larger businesses would be done more efficiently by specialist support staff, we also waste less time in meetings :)
How do I determine my own productivity?
I complete every task given on time however over the years I have extensively automated every part of what I do and work from home leaving me with free time though I do generally complete my tasks outside work hours.
Has my productivity gone up or gone down?
Or your productivity could just leak away as perfectly good and responsive tools are replaced by whizzy shit ones - a shared drive becomes the execrable Sharepoint; word/excel/visio become cloudy and hang or lose work. Outlook stops being a local service with IT support on call and you have some other cloudy thing that fails randomly, but no-one knows why. Productivity disappears with "we've open up a ticket with the software vendor" while your 10,000 staff sit on their holes remembering what it used to be like getting stuff done.
I sell 100 widgets for £1 each. I decide to double the price to £2. They still sell. I am now somehow 100% more productive, despite still only creating 100 widgets. Somehow we allow this bullshit, accept it, and allow it to be used it to insult people, blaming them for not working hard enough.
Not sure the blaming for not working hard enough thing is right. If we were doubling the price of everything we sell for the same labour then productivity wouldn't be an issue. Its a much more complicated issue than your example.
Much of productivity is not about how 'hard' people work, but about how 'well' they work. Example: I am working on some service management tooling at the moment. Process maturity stuff, getting people off spreadsheets for managing software licenses and hardware stocks and the like and into a proper tool - make their lives easier . . . more productive. Lots of other stuff - more self help for end users, save them sitting in a queue on the phone to the helpdesk for stuff they could fix in 3 minute.s themselves. Those things once done will improve the productivity of the organisation.
<Rant on> however my f_ing productivity is being blown out of the water by the f_ing shite bug ridden piece of shit Service Management tool I am stuck with which refuses to do any f_ing thing I ask without throwing an ODBC error and crapping out. Or other random obscure behaviour. GGGGGGGGGGGGGGGGRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR.
My productivity is shot to fuck at the moment - working same hard as always.
There may be an association between the rise in the number of self-employed and UK productivity being stagnant. But economists ascribe this malaise to UK businesses not investing in productivity boosting tools and technologies. That is, making existing staff more productive.
The productivity issue has been hanging around the UK economy for well over a decade and for this reason alone, attributing it to the rise of the gig economy seems a bit of a stretch. Maybe even a little desperate.
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