The UK government should focus on raising the pay of the poorest in Britain and encouraging greater worker representation to tackle the country’s long-running productivity crisis, according to a new study published by the Royal Society of Arts (RSA).
Increasing productivity – the amount produced per hour worked – is vital to the long-term growth of an economy. But it has barely grown in Britain since the financial crisis, worrying policymakers.
Although the jobs market has boomed in recent years, average incomes have stagnated since 2008 and millions are battling in-work poverty.
Research published today by the Carnegie UK Trust and RSA said the two problems can be tackled together.
The findings, from professor Chris Warshurst and Derek Bosworth of Warwick University, said that a focus on improving working conditions and pay in sectors where “bad work” is prominent seems to deliver the highest productivity gains.
The study said such an approach would be more effective than trying to improve productivity across all forms of works.
It came in a new Carnegie UK Trust and RSA collection of research that was introduced by Bank of England chief economist Andy Haldane.
“Working out how to address this crisis is the biggest challenge facing UK economic policy makers today,” Haldane said.
“Improving work quality, on issues such as security, training, progression and engagement, offers one potential route to overcoming this challenge. This is particularly true amongst the least productive sectors of the economy.”
RSA chief executive Matthew Taylor, said the research was particularly relevant following the Tories’ victory in the December General Election, which saw them pick up seats in many struggling midlands and northern towns.
“If prosperity isn’t shared with workers and if the labour market doesn’t deliver good work, then we stand little chance of boosting our productivity in the long-run,” he said.
“Government cannot do everything, but it can focus on creating the conditions for good work for all.”