Home > Uncategorized > As UK productivity growth falls to zero, John Harris at the Guardian tells readers that technology is making old workplace relations obsolete

As UK productivity growth falls to zero, John Harris at the Guardian tells readers that technology is making old workplace relations obsolete

from Dean Baker

The efforts by many elite types to deny basic statistics and to tout the new technologies transforming the workplace are truly Trumpian in their nature. According to the OECD, productivity growth in the UK was essentially zero between 2007 and 2014 (the most recent year for which it has data). So we would naturally expect that the Guardian would run a column telling us that globalization and new technologies are making old workplace relations obsolete.

As John Harris tells readers:

“In a world in which businesses can survey their order books on an hourly basis and temporarily hire staff at the touch of a button, why would they base their arrangements on agreements that last for years?”

Well, a big part of the story is that the UK (like the U.S.) has a very weak labor market. This was a result of conscious policy decisions. The Conservative government put in a policy of austerity that had the effect of reducing demand in the UK and slowing the rate of job creation. In this context, of course employers get to call the shots.

Serious people would address the context which has denied workers bargaining power. It is not “technology” as Harris and his elite Trumpians would like to pretend, it is macroeconomic policy. But Harris has no time for talking about macroeconomic policy. He dismisses a plan put forward by Labor Party Leader Jeremy Corbyn to produce full employment as, “either naive or dishonest” adding “but they reflect delusions that run throughout Labour and the left.”

There we have it, in elite Trumpland we don’t have to deal with data or arguments; we can just dismiss people and ideas with ad hominem arguments. If the Guardian allowed a serious person to address the set of questions raised in this piece they would look not only at the macroeconomic policies that have denied ordinary workers bargaining power, but also the government policies that allow the winners to win.

At the top of the list would be the policies that have favored the financial sector. Even the I.M.F. has noted that the financial sector is undertaxed relative to other industries. A modest financial transactions tax applied to the non-equity UK market would do wonders for increasing the efficiency of the sector. (The U.K. already taxes equity trades at a rate of 0.5 percent.)

We should also ask about the extent to which government granted patent and copyright monopolies are redistributing income upward. Patent monopolies are created by governments, they don’t grow out of the technology. And we should also ask whether the corporate governance structure is effectively allowing shareholders to control the pay of CEOs and other top executives. The structure clearly does not work in the case of the U.S., I suspect the problems are similar in the U.K., if not as bad.[1]

Not everything in Harris’ piece is wrong. It would be great to see the left more focused on shorter workweeks and longer vacations. (Many on the left already are.) And certainly there needs to be more focus on non work aspects of life. But the diagnosis of the basic problem in this piece has more to do with Donald Trumpland than the real world.

[1] These and other topics are discussed in my forthcoming book, “Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.” Coming soon to a website near you.

  1. September 13, 2016 at 4:13 pm

    What comes to mind first is: What is the state of investment in more productive technology? And if such investments are not being made, why not?

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