Mismatch In Pay And Productivity In U.K. – Most Impact Seen In Brexit-Voting Areas

Hikes in pay in some parts of Britain do not match the enhancement in worker output, warns a new report also highlighting the possibility of a split of the British economy widening further after the initial lines were drawn by Brexit vote.

A collapse can be seen in the connection between the increasing degree of productivity of workers, which is crucial data used for measurement of economic output in terms of per hour of work, and the enhancement of pay and the feelings of self-worth among employees. This has bene repotted by the thinktank Localis.

The impact is most apparent in areas which had more of leave voters, while the areas where there was an overriding sentiment for remain apparently did better. In spite of economic output increasing, there has been noted decrease in the rates of pay and worker satisfaction during the previous five years in some areas such as Lancashire, Cumbria and the south east midlands, says the report.

And in the past five years, there have been a shift in the opposite direction – often along with a slight improvement in productivity, in some of the other areas like parts of London and Oxfordshire.

In the 2016 referendum, almost 60 per cent of voters had voted in favor of leaving the EU. while London was amongst the most pro remain areas in the referendum, 55 per cent of people voted for leave in the south east midlands and 56 per cent in Cumbria. A strong remain area was Oxfordshire.

Improvements in the economy have not been taken advantage of by workers in large parts of the country, the report found. This trend is a possible roadblock on the plans of the government to enhance payments of workers through increased productivity.

In situations when there the economy does well or when the employers do well financially, little or no benefit is felt by about two-thirds of the 1,641 respondents of the survey by YouGov. There is also a feeling among half of the respondents that as though the colleagues were underpaid in relation to the worth of their work.

Jack Airey, head of research at Localis, a cross-party not-for-profit thinktank, said: “The alarm bells should be ringing for some places like Cornwall, the Black Country and the Isles of Scilly, where they’re being left behind by the rest of the economy.

“We need to put some more thought into the industrial strategy. We’re basically asking people to work harder, but for what?”

There were areas in the U.K where productivity had been increased by workers and still have been experiencing slow and sometimes negative increase in wages, the report found out. For example, between 2010 and 2015, there has been a rise in wages of less than 3 per cent in the Dartford area on the edges of London even though that very same area has reported an increase in economic output per head by nearly 30 per cent.

(Adapted from TheGuardian.com)


Categories: Economy & Finance, Sustainability, Uncategorized

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