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Prosperity Britain

The productivity myth

Stop trying to measure workers’ output – the figures don’t mean anything

9 December 2017

9:00 AM

9 December 2017

9:00 AM

Britain has a new disease: low productivity. Or at least it does if the statisticians are to be believed. Measured in terms of output per hour worked, we are trailing the G7 average by 15.9 per cent. A German worker, we are always told, could knock off for the week on Thursday afternoon and still produce as much as a bumbling British worker does by 5 p.m. on Friday.

But I am not convinced. I am always a bit shy of comparing statistics between nations as inevitably they are subject to different recording standards. I am especially suspicious of statistics which appear to show the French as super-productive. You have to take into account the effect of legislation in that country to enforce a 35-hour week. As a result, employers have a strong incentive to under-report working hours in order not to breach the rules. That need not necessarily involve outright fibbing, but if you are an employer filling out a form for the French Official Statistics Authority on how many hours your employees worked last week, you might just be inclined to exclude tea breaks, or the time changing into and out of work clothes. In Britain, on the other hand, you might be inclined to include the full time that your employees were on the premises.

There is also the question of self-employment, which is more prevalent in Britain (one in seven UK workers fall into this category) than, say, Germany (where one in ten do). When you are working at home, as I do, output per hour becomes a somewhat esoteric concept. If I break off from work to watch a YouTube video of a cat riding a bike am I being lazy and unproductive, or am I relaxing at home before getting back to work?

I am regularly asked by the Office for National Statistics for details of the amount of hours I worked last week. I don’t know how to reply because I don’t count my working hours. I have no need to because I am not paid by the hour. I tend to say about ten hours a day because that covers the time when I get to my desk in the morning to when I go down to dinner. Yet the truth is that I often have an afternoon nap within that time, or sometimes read a book for an hour. Occasionally the book might be connected with work, or vaguely linked with work, so do I count that as working time or not?

It isn’t just the self-employed who have thrown a spanner into productivity statistics. Employees, too, find their working lives merging with their private ones. If you spend half an hour in the bath thinking about a work-related problem, does that go down on the timesheet or not? What about doing a deal on the golf course — is the whole round working time, just the bits where you discussed business, or is it all leisure time? When people used to clock in and out, productivity really meant something, but less so now.

Even if you could come up with a reliable, internationally comparable figure for output per hour, does it signify anything? If you are enjoying your work and producing good output, so what if you are spreading it out over a larger number of working hours? There is also commuting to take into account. It doesn’t add to your work-life balance if you are super-productive at work, leave on the dot after your seven-hour day — and then face a two-hour commute home.

Productivity is also sometimes measured — and compared internationally — in terms of output per worker. On this measure, British workers are even less productive: 16.6 per cent less than the G7 average. But there seems little sense in looking at this figure except in conjunction with unemployment data. Take Italy, whose workers are notionally more productive than ours.

Yet in Italy unemployment is 11.1 per cent, compared with just 4.3 per cent in Britain. If you create extra, relatively low-paid jobs you will cause your economy’s productivity figure to fall. Yet surely it is a better, more productive economy where almost everyone is working in some capacity rather than one in ten being completely idle.

To correct this anomaly, how about including the unemployed in productivity statistics to everyone of working age in an economy — and measuring output per person of working age? But that is of questionable use given that the definition of working age varies from country to country. Would you include in the statistics 67-year-olds but not those who are still working at 68? Or maybe we should just include everyone in the productivity statistics — divide total output by the number of people in a country. Well, actually, statisticians do this already. It just isn’t called a productivity statistic. It is called GDP, GVA or output per capita. There is a strong case for saying that is what matters — on this measure we are third in the G7, ahead of France and Germany but behind the US and Canada — and to stop worrying about productivity.

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