Friday , April 20 2018
Home / Adam Smith Institute / We do find this productivity story amusing

We do find this productivity story amusing

Summary:
Apparently it is just terrible that market competition is going to lead to some Asda workers losing or changing their jobs:More than 800 senior Asda shopfloor workers are facing a pay cut or redundancy in the new year after the supermarket chain embarked on another cost-cutting exercise.Store staff have been briefed this week on a proposal that could mean 842 section leaders being removed from its store management teams. Thousands of other workers will also be affected by a wider move to cut the number of hours spent on stacking and tidying shelves at 600 supermarkets.In a document given to staff, and seen by the Guardian, the retailer said it needed to cut costs so it could “close the price gap” with rivals Aldi and Lidl.It said: “We need to continuously review our operating model. …

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Apparently it is just terrible that market competition is going to lead to some Asda workers losing or changing their jobs:

More than 800 senior Asda shopfloor workers are facing a pay cut or redundancy in the new year after the supermarket chain embarked on another cost-cutting exercise.

Store staff have been briefed this week on a proposal that could mean 842 section leaders being removed from its store management teams. Thousands of other workers will also be affected by a wider move to cut the number of hours spent on stacking and tidying shelves at 600 supermarkets.

In a document given to staff, and seen by the Guardian, the retailer said it needed to cut costs so it could “close the price gap” with rivals Aldi and Lidl.

It said: “We need to continuously review our operating model. … being the cheapest of the big four is no longer a viable business model. We need to be able to look at ways to reduce our operating costs in order to close the price gap.”

No, that's not the amusing part.,What is amusing is to compare this with the very loud complaints currently being made about British productivity.

For this is exactly the sort of thing which increases productivity, that very thing which all are shouting must be improved. To use less labour to perform a task is the very definition of increased labour productivity. So, why isn't this being hailed as a - partial to be sure - solution to what ails our economy? 

Note also how this comes about. Aldi and Lidl have shown that the Great British Public appears to be just fine with hauling their comestibles out of their packing boxes, not actually requiring teams to shelf stock for them. The competition from that lower labour using - and thus more productive - method of retailing being exactly what is pushing Asda into similarly trying to be more productive in its use of labour. Market competition leads to productivity rises.

Except, of course, when people insist that there's something wrong with anyone increasing the productivity of their use of labour.

Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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