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What is Productivity ?

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vrdiver
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Re: What is Productivity ?

#107050

Postby vrdiver » December 31st, 2017, 5:27 pm

colin wrote:The easy importation of cheap unskilled labor is absolutely the issue, how can it not be , its virtually tautological , unskilled labor = low productivity. It is not complicated. Yes the complicated bit is getting out of this situation because we have let it progress so far . It's not just East Anglian farmers who have become dependent on immigrant labor its any business that can make use of such labor as an alternative to using more efficient means of production.


OK:

Step 1: reduce unskilled labour immigration
Step 2: put tariffs on imports that would otherwise be imported rather than produced, with the now higher-costs of unskilled domestic labour.

Impact: Employers like Costa etc. have to put their prices up to cover increased labour costs. Joe Public discovers he doesn't need quite so many lattes and Costa start closing unprofitable outlets, OR Joe really needs the lattes, but now has less money to spend on other items. Barrista-boy has some more money, admittedly, but the tax-man will make this a net-negative for the economy as a whole.

East Anglian farmers put prices up (again to cover labour costs) and supermarket customers start to switch to other products or buy the more expensive produce but then have less to spend elsewhere.

How does this (admittedly straw man example) solve the underlying issue of increasing productivity?

I'm not baiting you (or at least, that's not my intention). I am genuinely interested as to how we, UK Plc can get out of this mess.

colin
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Re: What is Productivity ?

#107068

Postby colin » December 31st, 2017, 6:17 pm

Impact: Employers like Costa etc. have to put their prices up to cover increased labor costs


You misunderstand me . I am not suggesting that migrant workers already here should be sent home, that would be really outrageous. Putting a stop to further unchecked immigration is a necessary part of the solution to the productivity problem, in time economic growth will absorb those already here and provide them with better living standards, yes Costa will put up their prices, the wages of those working in coffee houses will rise and we will all still buy and drink loads of coffee. Without access to a limitless supply of cheap labor in an EXPANDING market Costa will have to pay higher wages to compete with other businesses, the price of a cup of coffee will rise and people will moan but we will still buy because in an EXPANDING market we will be able to afford it. Yes fewer people may well work in Costa Coffee because the owners of the business will be insentivised to INCREASE PRODUCTIVITY such that fewer workers can produce more cups of coffee, the missing staff will find themselves working elsewhere because the EXPANDING economy will require their services elsewhere, or maybe they will just open more coffee houses.
In a CONTRACTING market ie a recession why on Earth would we want the gates open to unskilled labor from anywhere in the EU?

I well remember the headline of the London Evening Standard one day in the 90s '' The 1£ cup of coffee has arrived!'' well we probably drink even more coffee now the price is more than twice that.

dionaeamuscipula
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Re: What is Productivity ?

#108204

Postby dionaeamuscipula » January 5th, 2018, 5:29 pm

colin wrote:
The easy importation of cheap unskilled labor is absolutely the issue, how can it not be , its virtually tautological , unskilled labor = low productivity. It is not complicated. Yes the complicated bit is getting out of this situation because we have let it progress so far . It's not just East Anglian farmers who have become dependent on immigrant labor its any business that can make use of such labor as an alternative to using more efficient means of production.


Its a shame this only affects the UK and not any of our competitor economies in Europe.

DM :?

colin
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Re: What is Productivity ?

#108249

Postby colin » January 5th, 2018, 10:10 pm

I think Britain is/was in a peculiar position ,we must have many thousands of East European migrants doing unskilled low paid jobs who have earned degrees and did professional but relatively low paying jobs back in their home countries, i think that the attraction was the strength of the pound before the Brexit vote coupled with the fact that our factories and work places are no where near as automated as they are in Germany

colin
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Re: What is Productivity ?

#108298

Postby colin » January 6th, 2018, 10:31 am

Oh I forgot to add... when Poland first joined the EU Britain allowed it's citizens to come here to work but Germany and other European countries imposed a seven year ban so Britain offered them their first opportunity to emigrate to a more developed economy which did not require that they have specific skills, our employment agencies seized the opportunity and set up offices in Poland and later other East European countries offering work and accommodation , many of them could speak English already but it was not a necessity, work places only need to offer simple instructions for unskilled jobs and notices are put up in several mostly East European languages. The role of the employment agencies is key because it make it easy for business owners to hoover up any amount of such labor that they need and let them go at any time with no notice whatsoever. An easier and cheaper option than making investments to boost productivity when demand increases.


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