Whose Productivity? Whose Wealth?

Liverpool economic productivity has shot up since 2004, but who’s benefited?

This week, the Liverpool Echo gushed that the Liverpool city region was being “hailed for a remarkable rise in its productivity”. It was referencing research published by Capital Economics, who claim that Liverpool’s productivity growth of 34% since 2004 is the highest in the country. But is the average Liverpool area resident one third better off as a result, or are we simply being exploited more?

According to the figures, Inner West London scores highest with £43 output per person per hour in 2012. Canary Wharf is second with £37 per hour, Liverpool is far behind, on £27 per hour, four pounds ahead of North Manchester. But Liverpool’s growth is the highest in the UK.

If the average Liverpool worker received the £27 pounds per hour of wealth they produce, this would amount to around £972 per week, or fifty thousand per year! Enough for a very comfortable lifestyle for all in employment, and their families. But in the last year for which figures were available, the average Liverpool wage was £23,000.

In other words, the average Liverpool worker receives around 45% of the wealth they produce. The rest – more than half – goes to their employer. In a way this should surprise no-one – it is the basic foundation of capitalism. But under conditions where the inflation-adjusted value of the average Liverpool wage has fallen by a few pounds per week in the time period covered by Capital Economics study, it would make more sense to report that the average Liverpool worker is about 35% more exploited than they were in 2004. Increasingly too, this newly-created wealth quickly leaves the city for richer areas, with multinationals dominating the Liverpool economy.

Averages conceal a lot of things. For instance, a fall of a few quid in the value of the average wage can not really be used to explain a recent fivefold increase in food bank usage for those at the very bottom. But maybe it can help us see why increasing productivity is not necessarily a good thing in of itself, especially when it has a cost in sweat and tears. And also, perhaps we can imagine how comfortable all our lives could be if working class people owned the fruits of their own labour.