Since the financial crisis a decade ago, the UK economy has been in the grip of a well-publicised productivity crisis. The economy has grown over the past 10 years, meaning we’re producing more goods and services as a country, but the size of the workforce has also increased – and so, most importantly, has the total number of hours we’re collectively working.
Indeed, the number of hours the workforce as a whole has been putting in has risen more or less in step with the growth in the economy, meaning our national productivity – our output per hour worked – has pretty much flatlined for the past decade.
This is such a serious economic malady because rising productivity is the central main means by which we increase our prosperity. Flat productivity means flat wages after inflation, as the past decade attests. In every decade since the Second World War productivity rose steadily, making the past decade an aberration.
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