Much of what economists know about structural unemployment has been gleaned from the sorry history of continental Europe, where fat benefits and rigid firing rules dulled labour-market efficiency.
The last Labour government attempted to release efficiency savings by creating a network of regional fire control rooms.
If productivity, the efficiency of the use of labour, in China was the same as it was in the US then Chinese wages would be the same as they are in the US. Running it backwards, we can look at wages in China.
Shadow communities minister Caroline Flint said Labour had "not been comfortable talking about efficiency and saving money".
This is a crucial point, for there are good reasons to believe that the growing income inequality in Britain during the past 20 years reflects improvements in the efficiency of the economy, especially the labour market.
In general, he concludes that American labour-market flexibility is not substantially better for economic efficiency.
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In the National Health Service, the government has resisted the Old Labour approach of caring only about the volume of spending rather than its efficiency.
He compared the two parties' differences on the policy to a "great dividing line", with "Labour standing for waste and taxes" while the Tories stand for "efficiency and aspiration".
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Germany has a cheaper-labour hinterland right on its doorstep in central Europe that has helped companies raise efficiency and hold down pay.
However, senior Labour figures north of the Border counter that more people are being treated and the government is progressing with its NHS efficiency drive and will continue to do so if it earns a second term.
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