Vox - May 2019
Americans are working harder these days, but it’s not paying off like it used to.
In the first three months of 2019, employees got so much more work done that they smashed productivity forecasts.
Labor productivity in the non-farm business sector (the biggest part of the US economy) grew 2.4 percent compared to the same period last year, according to new estimates from the US Department of Labor.
That’s the highest jump in nearly a decade, and is slightly above the average quarterly growth rate for most of the post-World War II period. Under a different measure, which compares annual growth to the previous quarter, productivity grew 3.6 percent, the highest in at least four years.
Business investment in technology is certainly making workers more efficient, but that doesn’t explain such a jump in productivity at a time when capital spending growth is falling.
What these numbers do tell us: Engineers, bartenders, supermarket cashiers, and other private sector employees are working harder than they have in the past few years. While productivity fluctuates each quarter, no matter how you measure it, it has been steadily rising overall since 2016.
That’s great for businesses (they earn more money), and for the economy (GDP grows faster). The problem is that companies aren’t rewarding their employees for the extra hard work.
Just look at the table below. Business employees and factory workers were more productive, worked longer hours, and produced more goods and services than they did last year. But their real hourly wages, which are adjusted for inflation, barely inched up. And real hourly pay for factory workers actually fell during that time. ...
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