{"id":468,"date":"2010-08-10T08:24:00","date_gmt":"2010-08-10T12:24:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=468"},"modified":"2018-08-17T15:47:39","modified_gmt":"2018-08-17T19:47:39","slug":"productivity-is-slipping","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/08\/10\/productivity-is-slipping\/","title":{"rendered":"Productivity is slipping"},"content":{"rendered":"

This morning the Department of Labor will be issuing its U.S. job productivity figures.\u00a0 The numbers are expected to show a decline in the efficiency of U.S. workers.<\/span><\/p>\n

Analysis:<\/strong> Much may be made by the press\u00a0about slipping productivity.\u00a0 However, I am not that concerned.\u00a0 Almost two years ago I had said that when the U.S. economy emerged from recession that productivity was likely to surge.\u00a0 This is more because of the way the statistics are calculated than because of any real change in the verve and creativity of the average workers.\u00a0 Productivity is measured as “output per hour” divided by number of employees.\u00a0 Because employers typically fire so many people in recessions, as revenues (i.e. output) return, productivity “surges.”<\/span><\/p>\n

I also stated that these kinds of productivity gains are unsustainable.\u00a0 That’s because you can only ask people to work so intensely for awhile.\u00a0 Thereafter, people become exhausted, or they begin to resent the extra work and responsibility without commensurate increases in pay.\u00a0 Well that’s likely what is happening right now.\u00a0 U.S. businesses are anticipating further economic decline so they are being stingy in both increasing pay and in hiring new employees.\u00a0 Consequently, productivity is going to fall.<\/span><\/p>\n

Another less likely reason for the decline in productivity is that businesses actually are hiring more employees without a similar increase in revenues.\u00a0 That would also cause the productivity figures to decline.\u00a0 However, the employment data seems to suggest that most businesses are holding steady with their headcount.\u00a0 Not only that, but personal income growth is basically flat.\u00a0 Thus, the former scenario\u00a0I described above is the more likely situation.\u00a0 So…<\/span><\/p>\n

In other words, we are still locked in the game of chicken between consumers\/employees and businesses\/employers.\u00a0 Unfortunately, without movement by either party, another recession is almost inevitable.<\/span><\/p>\n

Importance grade:<\/strong> 6; while the change in the productivity trend was fairly easy to predict, that businesses likely still are not hiring or increasing pay is potentially ominous.<\/span><\/p>\n

Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

This morning the Department of Labor will be issuing its U.S. job productivity figures.\u00a0 The numbers are expected to show a decline in the efficiency of U.S. workers. Analysis: Much may be made by the press\u00a0about slipping productivity.\u00a0 However, I am not that concerned.\u00a0 Almost two years ago I had said that when the U.S. […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-468","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/468","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=468"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/468\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=468"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=468"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=468"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}