Productivity Growth Poised to Recover? Will Workers Benefit?

link to pasutri-makassar.com

Realist, I’m not sure what portion of productivity growth comes from inventions, but obviously some does. There is a strong correlation to age there, as well. Throughout history, virtually all inventions have come from people under the age of 30. In our youth we are creative, and more apt to deviate from the beaten path. That probably also partially explains the big bump in productivity growth when a baby boom hits their mid 20’s, followed by a long, steady decline in productivity growth as they age.

it contains the promise of significant productivity-boosting opportunities, yet the benefits have not materialized at scale.
I think one reason for this is because lower level management can’t deal with data. They were never properly trained on what to do with it, and most supervisors are pretty bad at what they do. Now I’m certain that statement contains a lot of bias because of my current situation, but I’m sure it happens more or less everywhere. We’re all being measured on everything we do, but there’s no context aside from comparison to what was done yesterday, or by our peers, and because supervisors are unwelcome they tend to be overworked.
In my case, my supervisor retired last December. For the last 3 months before that I never heard from him or cared to. But it really didn’t matter if he was around or not because I was being managed by “the system.” I still am today while his replacement (who was just announced last week) gets up to speed, which I imagine will be about 6-8 months. That’s an eternity in today’s world and by then the whole department could be reorganized again. But instead of paying me to do productive work, I instead am paid to sort through massive data dump spreadsheets to find out what I’m supposed to be working on. Then I can work on it, but that usually entails interacting with many different departments and pushing on them to get what I need to complete a task. Sure, it’s all phone and email work but doesn’t seem to be a good use of my hourly wage. A good supervisor would know that and pre-crunch the spreadsheet, run the project, etc. Instead the company seems to think I should be running all that. Again, my anecdotal evidence, but I’ll bet this happens in far more companies than not.

Todays growth is just a mirage.

@Realist

The discrepancy between what most people think of as productivity, and what the Fed measures, has gotten really out of whack since the 70s. Before that, asset values couldn’t be pumped up completely out of proportion to the underlying economy (at least not forever, as 1929 demonstrated), since gold still served as some form of (however tenuous towards the end) sanity check.

Pre Fed, Gold did a much better job, as anyone could call a bank’s, or a bubble’s, bluff. But even under post New Deal Bretton Woods, at least there were “some” external constraints preventing full-blown Zimbabwefication. Now there’s really none. The only constraint being the self-imposed one, of ensuring printed-out-of-thin-air money stays mainly within the realm of the already wealthy. As they can be relied on to spend it primarily on “assets.” Rather than having it trickle down to people who may spend it on so called “consumer goods.”

That way, The Fed can maintain the fiction that “inflation is subdued.” While improving GDP, hence what they call “growth,” by way of, as mentioned above, doubling the GDP contribution of a realtor doing exactly the same thing, just by pumping up the price of the house he is doing it to, to twice what it previously was.

None of which means that what is generally considered productivity hasn’t increased since 1971. It has, at least in some areas. While in many others (try buying a handgun in California. Or get a nurse or doctor to put some bandaid on you after a motorcycle spill), it has gone backwards (Of course, per Fed, all the pointless makework involved in doing something that once was simple, increases GDP in proportion to how well paid the people doing the pointless makework is….).

Instead, my main point was that what the Fed is measuring, and everyone seems bent on bloviating about, has very little to do with this folksier, common sense, understanding of “productivity.” The Fed’s version instead serving, as does most government jargon, as simple Newspeak: Feelgood words specifically chosen to allow those of power and privilege to deceive those not.

Realist: “… we have gone from 90% of the working age population toiling on farms to 2% today …”. Certainly true that the percentage of the population working directly on the land has dropped dramatically. But how do we account for all those who are indirectly working on the land — the guys who make the tractors; the guys who drill for the oil to run the tractors; the guys who make the steel for the tractors; the guys who mine the iron ore that goes into the tractors; and on & on. Even the bureaucrats who sit in their offices, doing whatever agricultural bureaucrats do. Not to mention the guys who build the offices for the bureaucrats, and the ones who produce the electricity to keep the bureaucrats computer screens lit, etc. Now clearly the human race is much better at producing food today than it was 100 years ago, but I have never seen any quantification of the percent of the population which is involved in today’s food production.

While “productivity” may sound all warm and fuzzy and goody-two-shoes, all it measures is GDP versus hours worked. With the result that, like all else that uses GDP as a factor, all it really measures is debt growth.

If debt growth is low, “productivity” growth is low. Since far and away the largest contribution to GDP growth post Nixon taking the country full retard, is asset pumping debt growth. Giving the illusion that a realtor is somehow twice as productive doing the exact same thing, just because the Fed has pumped the price of the house he is getting a cut of the sale price from, to twice its previous value.

Virtually all meaningful purchasing power growth, hence demand growth, hence GDP growth; now go to income tied closely to simple asset price appreciation. Whether directly, as is the case for realtor, or indirectly, for NYC high priced prostitutes and other “luxury goods” peddlers. As a result, GDP is largely a measure of asset pumping debt growth. And hence, so is productivity growth.

Whether “self-driving cars,” or any other currently fashionable sci-fi, actually ends up doing something useful in the real world, matters much less to official “productivity” growth numbers, than whether “self-driving technology” can be used as an excuse for further debt growth and asset pumping. A bunch of guys on (more likely “off” these days…) Sand Hill Road, babbling about all the great things they “own the rights to” automate tomorrow; then using their pumped-up-stock derived “net worth,” to borrow a few million apiece to share a one bedroom with a few hundred roaches; is what adds to productivity these days. Not whether any of the automation the guys whose work they supposedly “own the rights to,” actually end up doing anything worth vile in the end.

I’m also looking forward to automated vehicle car sharing. Why have a vehicle sitting around when you can use an app to “call” an automated vehicle and have it drop you off. As demand increases so will response time and costs will drop. Vehicle ownership will decrease, oil demand will drop as most will be electric or hybrid. We may see a change to public’s transportation with automated vehicles taking that market and also see development of alternative long distance travel as vehicle ownership and demand declines. I’m excited as I think it will be immensely positive all around.

declining* every year. This technology is not going to happen in a few years, it is already here. I’m sorry for this post being in two pieces. My mistake.

I’m looking forward to it to as I’m getting older. The smart money will adopt it earlier rather than later, providing new services to those using automated vehicles.