The Dark Side of the Productivity Surge (Sqeezing More Work Out of Employees During Hard Times)

Business Week ^ | 11/6/2009 | Peter Coy

[SeekAndFind]

Rising productivity is usually one of the best things you can hope for in an economy. It means people are producing more for each hour they work. That's the path to higher living standards.

But the huge burst in productivity that the U.S. economy experienced in the third quarter is not entirely good. In fact, it's a sign that the U.S. economy is still in a sickly condition—a conclusion that is likely to be driven home by the latest job-loss figures release on Nov. 6. Economists who cheered the productivity number are ignoring the dark side of its sudden growth.

On Nov. 5, the Bureau of Labor Statistics announced that productivity—that is, output per hour of work—in the non-farm business sector grew at a 9.5% annual rate in the July-September quarter. That was one of the three biggest gains in the last 30 years, and it followed a strong annualized gain of 6.9% in the second quarter.

What could be wrong with that? The problem is how the productivity growth was achieved. It wasn't because of clever efficiency measures or the purchase of wonderful tools that help people get their jobs done faster. Such improvements take years, not mere months. Rather, it was because companies cut jobs and work hours drastically.

Work hours fell at a 5% annual rate even as output increased at a 4% rate, the government said. So people working shorter hours had to do the same amount of work as before, or more. People who kept their jobs had to pick up the work of ex-colleagues. Many workers probably put in extra hours that weren't counted in the statistics in order to get all their work done. That would exaggerate the output-per-hour gain.

Speedups are rarely good for worker morale.

[lentulusgracchus]

Note also the provenience of the article. Business Week, not the Guardian, the NYT, or the New York Review of Books.

[ex-Texan]

Hards Times are going to get a lot worse. The time to wake up is long past:

Video: Bernanke's War on Trade and the US Dollar

Video: A Sign of the Times Ahead -- Not good!

[investigateworld]

Gotta clear the 'bezzele first!

[Kenton]

I retired last year, but I spent most of my working lifetime being affected by this cycle. When the economy got slow, the layoffs came and the 'survivors' wound up picking up the slack for those who got let go.

And by the time they started hiring again, those 'extra duties' usually didn't go away, they just became part of your job, because after all, you'd showed them you could do it, why hire somebody else?

I guess I was one of the lucky ones, I went through 4 or 5 of these business cycles and never got let go, and I retired on my own schedule, but I can't say I miss this kind of thing.

[jdsteel]

Look, I’m not saying we’ve go no problems, and there is NO freakin’ way that I’m a fan of Obamanomics. That said, the 90% of people that have jobs are still spending money. My point was and is that productivity goes up at this point in the economic cycle. And we’ve been through this cycle a bunch of times. Can we double dip or crash and burn? Yes, we can. But right now, unemployment is up and so is productivity. It’s a NON STORY that the MSM are trying to turn into a story.