On the radio just now ($)

Email Print posted by ihavenobias 05/07/2008 11:48:42 AM EST

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On the radio just now I heard a news blurb about how US worker productivity increased higher than expected in the first quarter (or something like that).

Then some company head (can't remember his name) said (paraphrase) "This is a good thing for all of us.  When productivity is higher that means we have more things to spend our money on".

Of course I immediately thought of Cenk's interview with Ravi Batra, and how one of Batra's central points is that wages have not risen to match increased productivity over the last 25 or so years, and that has created many of our economic problems.

Obviously it's a complicated issue and I'm too busy today to turn this into a giant discussion, but I do encourage everyone to think about what that business head said.

Why is it a good thing that productivity increases in a vacuum?  If we don't have any more money to spend on the increased number of goods and services, we either do nothing differently or we increase our debt in order to buy more goods and services, right?

Hello Visa, Mastercard and Home Equity Loan!

Granted, you can blame individuals for spending beyond their means (and there is a lot of validity in that point), but at the same time stagnant wages and benefits coupled with inflation and decades of easy credit were a ticking time bomb waiting to go off.
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On the radio just now ($) | 6 comments (6 topical, 0 hidden)
Class warfare anyone? (none / 0)
Its good for the OWNERS of these companies and investors that productivity increases as much as it does, while the benefits are not passed on to the workers in terms of higher REAL wages. This disproves the economic theory that people are paid according to their productivity, which we should all know is BS. Secondly its about getting more profit out of fewer and fewer workers, and as you claim it has a irrational quality to it. As productivity goes up, more and more people are laid off, because productivity gains not outsourcing the major reason why so many good jobs have disappeared. The accumulation of debt is what keeps the American economy going, financialization of the American economy demands that credit be spread as far as it can. Accumulation in the United States is through financial mechanisms, not production. More and more Americans are now incurring debt because they have no other choice, its not a question of greed. Here is where capitalism and the non-existent free market shows its true face. Its about class people!

Blog: http://perspectivos.blogspo t.com/

by Nick86 on 05/07/2008 01:22:11 PM EST

Sorry it is a question of greed (none / 0)

Blog: http://perspectivos.blogspo t.com/

by Nick86 on 05/07/2008 01:23:02 PM EST

[ Parent ]
Also... (none / 0)
It would seem to me that when jobs are cut, which along with fewer new jobs created means overall employment falls, worker productivity has to increase. In my lazy opinion (I have no desire to research the issue at this point), when jobs are cut at a workplace, the job duties formerly done by the now departed employees pass on to existing employees. True, some of those job duties are eliminated altogether but not usually.

And, as those rare "working-class" Obama supporters on this site (like myself) know very well, a lot of our time at work is spent on doing little to no actual work (I know from my and my mom's experience that this is not true at factories or packaging plants, warehouses etc. I've seen it applicabl e at offices, retail, support centers and the like).
 
A lot of people will also just stretch their job duties to fill their schedule, even if the work shouldn't actually take up the entire day. So when new employees aren't being hired or are being hired at a slower rate, plus the number of existing employees is dwindling, people have more responsibilities thrust upon them in the workplace. An additional factor would seem to be that the fear of losing your job would probably cause you to work harder, longer etc.

Even though I didn't research any numbers or reports about this I'm quite confident that the above reasons are mostly responsible for the rise in worker productivity. Logic and reasoned deduction can be useful in their own right, after all.

by Weapon X on 05/07/2008 10:15:32 PM EST

Dude (none / 0)

don't get too excited. Productivity generally increases during a downturn...it's euphemistically called called rightsizing.

The U.S. government's definition of productivity is , from the DOL:" based upon a manufacturing model. To measure productivity, you simply count the number of "things" produced and divide by the amount of time or cost it took to produce them. "

When you hear CEO crow about how productive his/her company is it usually means the have cut their workforce and / or have reduced wages and/ or outsourced some aspect of the business. (Ocassionally,  rarely in the USA, it may mean they have actually done something other than fire people or move offshore to be more productive.)

"This is a good thing for all of us.  When productivity is higher that means we have more things to spend our money on".

We means CEOs, owners , company boards, those "elite" folk...not you.

Sorry, dont count your new BlueRay discs yet

by MRFred on 05/07/2008 11:39:50 PM EST

I know that (none / 0)
And *you* know that. 

But most of America doesn't.  When they hear the business head say "all of us" they think he means from the CEO up top to the guy mopping the floor at the bottom (and IMO, that's clearly what he *wants* us to think).

And Weapon X is right, often times it just means they laid off some people and passed that work on to existing employees.  Anyone who's worked in an office setting can relate to that situation.

by ihavenobias on 05/08/2008 12:19:05 AM EST

[ Parent ]
Martin S. Feldstein (none / 0)
The level of productivity doubled in the U.S. nonfarm business sector between 1970 and 2006. Wages, or more accurately total compensation per hour, increased at approximately the same annual rate during that period if nominal compensation is adjusted for inflation in the same way as the nominal output measure that is used to calculate productivity.

Total employee compensation as a share of national income was 66 percent of national income in 1970 and 64 percent in 2006. This measure of the labor compensation share has been remarkably stable since the 1970s.

by Twba on 05/09/2008 09:33:19 AM EST

[ Parent ]
On the radio just now ($) | 6 comments (6 topical, 0 hidden)
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