(THE WEEK) Ryan Cooper — The recent British election was fought almost entirely over which party could better demonstrate its commitment to murdering the deficit. But the real economic problem for that nation is something else entirely: productivity.
As economist Simon Wren-Lewis demonstrates, productivity has declinedsomewhat under the five-plus years of Conservative government — a result basically unprecedented in U.K. history since World War II at least. Let’s call it the “British disease.”
Productivity is economic output per hour worked, and it’s one of the best ways to measure the prosperity of a country. High productivity means more potential for both wealth and leisure, since one can produce the same amount with less work. Stagnant or falling productivity means the opposite — particularly troubling in nations that are getting older, like the U.K.
So why should Americans care? Because it appears that the U.S. is getting a case of the British disease. After a huge spike following the Great Recession, productivity growth has fallen to historically low levels. For the first quarter of 2015, the Bureau of Labor Statistics reported that productivity actually fell at a 3.1 percent annual rate.