Universal Credit will not solve the UK Productivity Problem

On the 10/10/2016 university educated astrophysicist and now MP Heidi Allen stated in a Work and Pensions Committee that Universal Credit will help UK’s productivity problem.

The aim of Universal Credit is to get the lowest paid workers to increase their hours worked and pay to reduce the amount of benefit they receive.

Productivity of a country is a measure of GDP (output) divided by the number of hours worked. By simply increasing hours worked UK productivity will go down.

Most low pay low skill workers who will receive Universal Credit are employed in areas such as retail, hospitality, as teaching assistants or as carers. The government will demand for example a carer on 30 hours now works 35 hours or lose their benefits. The fact that she [usually she] may be driving for 10 hours unpaid doesn’t get calculated. Or a retail worker may be standing for 30 hours with 5 hours on site unpaid — or hotel or school cleaner may have to clean a room in 15 minutes and will be totally exhausted at the end of a 20 hour weekly shift. A teaching assistant can’t ask for more school hours — so they would have to change jobs. So an excellent teaching assistant might have to leave to a different job to avoid a benefit sanction. Even though this may be their passion — they may have to get a job they hate just because it says 35 hours.

The government believes low pay low skill workers are not working hard enough. But the only way Universal Credit could increase productivity is if the workers on 10 or 20 hours lose their job when someone takes their hours to get to 35 hours.

For Universal Credit to work to improve productivity it would have to increase unemployment.