Why Your McDonald's Order Gets Faster Every Year (And Why That Matters for Your Future)

Why Your McDonald's Order Gets Faster Every Year (And Why That Matters for Your Future)

You're at McDonald's during peak lunchtime madness. Five years ago, you'd be queueing for ages whilst some poor soul behind the counter frantically pressed buttons on a till older than your phone. Fast forward to today, and you're ordering through a touchscreen, watching robots flip burgers, and getting your Big Mac in under three minutes. That, my friends, is productivity growth in action - and it's literally shaping your economic future.

The Farmer's Tale: From Mules to Tesla Tractors

Let's start with a story that'll make this whole productivity thing click. Meet Dave, a corn farmer who's been in the game for decades. Back in the day, Dave and his trusty mules could harvest 2,000 ears of corn after slogging away for 500 hours. Do the maths: that's 4 ears per hour. At 25p per ear, Dave's earning a whopping £1 per hour. Not exactly going to buy him that new iPhone, is it?

But here's where it gets interesting. Dave's got three ways to boost his game:

More Inputs: Dave gets another mule. Now he's harvesting the same 2,000 ears in just 400 hours. His productivity jumps by 25% to 5 ears per hour. Not bad, but adding more workers usually doesn't scale this nicely - imagine trying to fit 50 people around one tractor! The increase in output is smaller than the increase in labour

Better Inputs: Dave ditches the mules for a proper tractor. Suddenly, he's producing 10 times more corn per hour. This is like upgrading from a Nokia 3310 to an iPhone 15 - same job, completely different league.

Better Use of Inputs: Dave discovers TikTok farming hacks (yes, that's a thing now) and learns more efficient planting patterns. Same tractor, same hours, but way more output. This is what economists call "total factor productivity growth" - basically getting more bang for your buck without spending more bucks. This ability to get more output from the same inputs is ultimately the key to almost all growth in labour productivity.

The Productivity Puzzle: Why America Dominated and Europe Caught Up

Here's where things get proper. Throughout the 1800s and early 1900s, America was absolutely smashing it productivity-wise, leaving Europe in the dust. Think of it like Apple dominating the smartphone market - they had the tech, the innovation, and the swagger.

But after 1950, Europe started their comeback story. They had a massive backlog of American innovations to catch up on - like binge-watching five seasons of your favourite series in one weekend. The productivity gap started closing.

Then 1973 happened. The Yom Kippur War kicked off an oil embargo that sent energy prices through the roof. Suddenly, everything got more expensive to produce. American productivity growth slumped to 1.5% yearly, Europe to 2.2%. Everyone was panicking that Japan would overtake America (spoiler alert: they didn't). It was like watching your favourite football team suddenly forget how to score goals.

Recently, in Q1 2025, productivity was estimated to be 0.2% lower compared with a year ago (Q1 2024), according to the latest ONS flash estimate - showing that productivity struggles aren't just historical problems.

The 1990s Comeback: When Silicon Valley Saved the Day

Fast forward to the mid-1990s, and America pulled off the economic equivalent of Leicester City winning the Premier League. Productivity growth shot back up to 2.5% (1995-2000) and then an insane 3.1% (2000-2005). What changed? One word: technology.

The internet, microchips, and computers weren't just cool gadgets anymore - they were revolutionising how businesses operated and became mainstream. American companies realised that just buying computers wasn't enough; they needed to completely rethink how they worked. It's like buying a gaming PC but still playing Solitaire - you're not using the full potential you want to try the big games.

Companies that adapted thrived. Those that didn't? They went the way of Blockbuster Video. This creative destruction (thanks, Joseph Schumpeter) meant only the fittest survived, constantly pushing innovation forward.

The Numbers Game: US vs Europe vs UK (And Why It Matters)

Let's get real with some current stats that'll blow your mind:

• USA (2024): 2.3% productivity growth

• Europe (2024): A measly 0.4% growth in labour productivity per hour

• Asia (2024): Projected 4.5% growth (absolute madness!)

• UK: Output per hour worked was lower (negative 0.8%) in Quarter 4 2024 than in the same quarter a year ago

Ouch. The UK's having a proper mare compared to everyone else. Multi-factor productivity (MFP) in 2024 is estimated to have decreased by 0.6% compared with a year ago, which is basically the economic equivalent of going backwards whilst everyone else speeds ahead.

Why America Keeps Winning (And Europe Keeps Struggling)

Here's the tea: American institutions are basically built for "creative destruction." They welcome new companies, encourage competition, and don't mind if old, inefficient businesses get obliterated. It's like Darwin's survival of the fittest, but with profit margins.

Europe? Different story. Their system is more like that overprotective parent who won't let their kid ride a bike without bubble wrap. European corporatism protects existing businesses from competition, making it harder for innovative newcomers to shake things up. Edmund Phelps argues that many European countries see their productivity growth retarded almost on purpose by corporatist institutions designed to protect established producers and inhibit new entry.

Think about it: American retail giants like Amazon can revolutionise shopping because there are fewer regulations stopping them. Meanwhile, European countries have shop-closing time regulations that would make Jeff Bezos weep into his space helmet.

Robert Gordon identified some key American advantages:

• Unified market: No language barriers like "Is it lift or elevator?"

• Merit-based research: Best ideas win, not who knows whom

• Dynamic capital markets: Investors throw money at good ideas faster than Love Island contestants couple up

• Immigration magnet: Brain drain works in America's favour

• Competitive universities: Harvard vs Stanford rivalry pushes excellence

What Should We Actually Do About This?

Right, so productivity growth clearly matters - it's literally the difference between your generation being richer than your parents or poorer. But what can governments actually do?

Most economists agree on these tactics:

1. Smart Fiscal Policy: 85% of economists agree that good government spending can boost long-term capital formation. That's like having 85% of your mates agree that pizza is better than salad - pretty convincing consensus.

2. Education Revolution: We need more people studying STEM subjects (Science, Technology, Engineering, and Mathematics). Not everyone needs to become the next Elon Musk, but we definitely need more people who understand how technology actually works.

3. R&D Investment: Government funding for research and development is like planting trees - expensive now, but your future self will thank you.

4. Stay Open: Foreign investment brings new ideas, competition, and innovation. Xenophobia is basically economic self-harm.

The Future: Should You Be Optimistic or Terrified?

Here's the million-pound question: will productivity growth continue, slow down, or accelerate?

The optimistic view: Technology is advancing faster than ever. AI, robotics, biotechnology - we're living in the age of exponential innovation. Your iPhone has more computing power than NASA used to land on the moon. Imagine what we'll have in 10 years.

The pessimistic view: Maybe we've picked all the low-hanging fruit. The easy gains from computers and the internet might be behind us. Plus, aging populations and climate change could slow things down.

The realistic view: Productivity growth will probably be lumpy - periods of rapid advancement followed by slower consolidation, like how the internet boom was followed by a more steady integration period.

Why This Actually Matters to You

Look, I get it. Productivity statistics sound about as exciting as watching paint dry in real-time. But here's why you should care: productivity growth is literally what determines your standard of living.

If productivity grows at 2% per year, your income will roughly double every 35 years. At 1% growth? It takes 70 years. At 3%? Just 23 years. That's the difference between your kids being twice as well-off as you or struggling with the same problems you face.

When you're sitting your IB Economics exam, remember that productivity isn't just some abstract concept - it's the engine that drives everything from your salary to your country's ability to afford the NHS.

The Bottom Line

Productivity growth is like compound interest for entire economies. Small differences compound over time into massive gaps in living standards. America's productivity advantage isn't just about being good at business - it's about creating systems that reward innovation, embrace change, and don't protect the old ways of doing things just because "that's how we've always done it."

The UK's current productivity struggles should be a wake-up call. We can't just assume things will get better automatically. It requires conscious choices about education, innovation, competition, and how we structure our economy.

So next time you're at McDonald's marveling at how quickly your order appears, remember: that's not just convenience - that's progress and economic prosperity in action. And whether that progress continues might just determine what kind of world you're inheriting.

Stay well