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The Times:
Margaret Thatcher's legacy: We've kept our jobs, but earn less

6 April 2013

Margaret Thatcher's demolition of the trade unions in the 1980s has helped to keep Britons in work through the latest financial crisis, leading economists suggested yesterday...Economists have been baffled by the conundrum that employment in Britain has remained high despite the fact that productivity has collapsed. Output in Britain is about 3 per cent lower today than it was before the downturn, yet more people are in work. In a session held by the Institute for Fiscal Studies and the Centre for Economic Performance at the Royal Economic Society yesterday, economists attempted to solve the puzzle. They said that a sharp fall in the real value of wages was the driving factor behind the contradiction. They also cautioned against any expectations of real-term wage rises in the near future. "The good UK jobs performance is the silver lining in the cloud of our low productivity numbers," said John Van Reenen, director of the Centre for Economic Performance.

This article was published in The Times on April 6, 2013
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Related links
John Van Reenen webpage
Productivity and Innovation Programme webpage

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