S/E/12. The UK economy's productivity gap and Mrs. Thatcher's industrial relations reforms.

There are various means to measure ratios between the output of goods and services in an economy, and the inputs of resources used to produce them. That is: there are different ways to measure productivity. This essay will examine these different measures and will explain why different ratios paint a different picture with regards to the performance of the UK economy relative to its main competitors. Each measure has its advantages and disadvantages, and looks at productivity from a different angle. I will explain why the government uses output per worker as its preferred measure and I will also attempt to explain why I believe, in contrast to many economists, that they are not wrong in doing so. The analysis will then move to Mrs. Thatcher's industrial relations reforms, and assess whether these closed the productivity gap between the UK & France and Germany; or whether the Labour Government's 1998 pre budget report statement of a productivity gap stands.