Labor Productivity Is Just Terrible These Days
Jobs figures for November will be released in a couple of hours, and the consensus forecast is that they’ll be fine. While you wait, however, here’s another chart to look at:
Productivity growth has dropped like a stone since 2005, and is currently hovering around 1 percent per year. That’s terrible. Unemployment is at 4 percent, which means businesses are employing a lot of people, but low productivity growth means this employment is only in lieu of investing in labor-saving machinery. After all, why bother with a big capital expenditure when future growth looks iffy and wages are flat? It’s easier and more flexible to just hire some cheap workers who can be laid off if business sours.
There’s probably something of a pent-up demand right now for labor-saving equipment, and the Republican tax bill’s bizarrely enormous incentive to pull all investment into 2018 might be just the thing to kick it off. If that’s really the case, we can kiss off any chance of sustained wage growth in the near future.
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by Kevin Drum
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Current NT rules allow anyone to post more-or-less anything more-or-less anywhere... so I won't waste our time with pointless rules about behavior. I will simply ignore any member who in my opinion posts in bad faith. (See this article for an explanation of "bad faith".)
Removed CoC violation. (BT)
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Anyone who pays attention is aware that the improvement in employment has not been accompanied by an improvement in wages. There have been lots of (sometimes contradictory) commentaries on this fact.
This is the first time I've seen this particular argument, which seems sadly logical...