At the beginning of the year, Ivan Ostojic, a former partner at the consulting group McKinsey, published a piece that examined Europe’s slow growth and lack of competitiveness. On the subject of productivity, he says that Europe’s productivity has fallen significantly behind that of the United States of America. And obviously, when productivity drops, it affects living standards. He also posits that disposable income in Europe has grown ‘almost twice as slowly as in the US since 2000”. And of course, the impact is that Europeans are now relatively poorer than Americans. He also makes a very profound point that this has a bearing on Europe’s ability to support its generous welfare system. You cannot sustain the welfare state without a rise in productivity, and that’s something that should alarm the powers that be in Europe.
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