Low Productivity is Saving the UK

That is the argument that Martin Wolf makes in a recent column in the Financial Times:  The reason the UK didn’t see the dive in employment numbers that the US did was due to low labor productivity:

The overall story . . .is one of a fall in productivity that cushioned the expected impact of a big decline in output on jobs and joblessness: in the first quarter of 2011, UK gross domestic product was 4 per cent lower than three years earlier and only 2.5 per cent above its trough in the third quarter of 2009. But the number of people with jobs has fallen – and the number of unemployed has risen – surprisingly modestly. Wednesday’s data show total UK employment only 1.1 per cent below its pre-crisis peak and just 1.5 per cent above its post-crisis trough. Similarly, the most recent rate of unemployment is only 7.7 per cent, against 5.2 per cent just before the crisis hit in 2008, despite the depth of the UK’s recession.

And that lack of productivity spared UK workers.  Compare their experience with those of workers in the US, often lauded as the most productive workers in the world.  (Click on the Mojo graph at right to see a larger version.)  Which work force would you rather be in, in this current situation?

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