'02 - '04 US productivity best for over 50 years

[el freako]

Originally posted by DanS
Well then it was a coincidence, I made a one-time error, or you're remembering incorrectly.

Probably a mixture of those actually, anyways many apologies for impuning your integrity sir!

Originally posted by DanS
All of the numbers that I and everybody else use (including WaPo in this article) are taken from Series B -- i.e., the establishment figures.

Hmm, it's interesting that the OECD uses the household figures, as does the IMF.
It's also interesting to note that using those figures the US's employment rate (66.9% of population aged 15-64) is almost the same as Germany's (66.7%) and the EU15's average (66.1%) as both Germany and the EU15 have higher unemployment rates this implies that the US has a smaller share of it's working-age population in the workforce which is difficult to square with a lot of the statements made about europe's supposedly inferior labour markets.

It is surprising that hours worked grew by 0.2% less than employment between Q3 2002 and Q4 2004 - I thought that during a recovery the US usually increased it's average hours worked - or is this due to the difference between the 'business sector' and the whole economy (it's also interesting to note that 'business' GDP has consistantly grown faster than total GDP, which flatters the US figures in international comparisons)

[Lawrence of Arabia]

But there is also a force against productivity growth because of falling revenues.

yeah, thats what i said. but i just explained why the force is negated.

the equation goes up, becase output hasnt decreased by the proportional amount (if it did, then their finances would still be the same relative, and theyd still be losing money, so the firing woulda been pointless [in most cases])

[Kidlicious]

Originally posted by Lawrence of Arabia
yeah, thats what i said. but i just explained why the force is negated.

Ok, well I do think there is some long run productivity growth occuring. We seem to still be on a growth spurt form the 90s, as businesses reorganize and use modern technology more efficiently.

[Lawrence of Arabia]

Ok, well I do think there is some long run productivity growth occuring. We seem to still be on a growth spurt form the 90s, as businesses reorganize and use modern technology more efficiently.

yea, i agree, a certain percentage of this product growth is long term, but we dont know how much, and i would guess its maybe 1/4 or a 1/3 of the figures give.

structural uunemployment in some cases is also productivity growth. you cant always say that the economy is doing well if there is high product growth, but also lots of structural unemployment.

[DanS]

anyways many apologies for impuning your integrity sir!

Thank you. Now lets get on to the business at hand.

When you say that GDP grew 4.4% last year, you are of course correct. However, GDP includes both production by the private sector and the government sector. The productivity quoted in the lead article, and that which is always discussed in this context is non-farm business productivity. As discussed in the BLS news release for these figures, the non-farm business GDP grew 5.3% in 2004 rather than the 4.4 overall figure that you cited.

Now, the WaPo is correct that payrolls increased in 2004 by 2.2 million. However, that includes government payroll increases. For the non-farm business sector in 2004, payrolls increased by 2.1 million. WaPo should have mentioned the non-farm business payroll increase, since the productivity numbers are based on non-farm business productivity calculations. But overall, it was a tiny oversight on WaPo's part.

OK, so 2.1 million new jobs in the non-farm business sector is a 1.9% increase in payrolls. However, our productivity is calculated using hour totals rather than worker totals. Both are collected in the establishment survey. Referring to the news release mentioned above, total hours worked in the non-farm business sector increased by an adjusted 1.1%.

The hours increase of 1.1% plus the productivity increase of 4.1% equals 5.3% non-farm business GDP increase, with rounding errors.

[pchang]

Productivity vs. Standard of Living

Wage increases are not always the measure of increases in your standard of living. You could pay $2000 for a top of the line PC in 1995 and the same now in 2005. With inflation (~3%), the 1995 PC would cost $2680 in today's dollars. In addition, the 2005 PC is more than twice as capable than the 1995 PC. So, if your wage in 1995 was $15/hour and you received no raises to date, you would say that your buying power and thus, standard of living has decreased over 30% because of inflation. But, if we look at what you can buy with those dollars today vs. what you could buy in 1995, your standard of living (at least with respect to computers) would have gone up. Many things we buy today are much better (and at the same price) as earlier models. Many things (like food) are not. Thus, the standard of living calculation is much more complicated and there is no simple way to calculate the answer to the question: Are you better off now than you were four years ago?

[Ben Kenobi]

Bad news for us.

It's like Alice and Wonderland. Having to run twice as fast just to keep pace.

[mrmitchell]

In the left wing, economic growth is really bad. This is really bad news for the leftists on this forum, I think. But to the people this is great news, thumbs up to several of solid economic growth. I expect 2005 to be similiar.

Yes, Fez. In fact when I saw this very thread I pondered my woeful fate as a left-wing anti-growther. But I've made a fetus sacrifice to Marx so that we can have worse times in the future. Allah help us all.

[Whoha]

Re: Productivity vs. Standard of Living

Originally posted by pchang
Wage increases are not always the measure of increases in your standard of living. You could pay $2000 for a top of the line PC in 1995 and the same now in 2005. With inflation (~3%), the 1995 PC would cost $2680 in today's dollars. In addition, the 2005 PC is more than twice as capable than the 1995 PC. So, if your wage in 1995 was $15/hour and you received no raises to date, you would say that your buying power and thus, standard of living has decreased over 30% because of inflation. But, if we look at what you can buy with those dollars today vs. what you could buy in 1995, your standard of living (at least with respect to computers) would have gone up. Many things we buy today are much better (and at the same price) as earlier models. Many things (like food) are not. Thus, the standard of living calculation is much more complicated and there is no simple way to calculate the answer to the question: Are you better off now than you were four years ago?

Well for myself, I haven't bought a computer in the past couple of years, and was riding the Clinton bubbles back then, so personally I am worse off.

You may want to google "The Iron Law of Wages" and ask yourself if lower prices really are better then higher wages.

[chequita guevara]

Re: Re: Productivity vs. Standard of Living

Originally posted by Whoha
You may want to google "The Iron Law of Wages" and ask yourself if lower prices really are better then higher wages.

Why bother with LaSalle? He was only bastardizing Marx, and not very well, either.

[Whoha]

LaSalle did not write the Iron law of Wages Che. I am speaking of what Ricardo wrote on the matter.

[pchang]

I didn't say anything about which one is better. Clearly higher wages is better (it also offers greater freedom of choice). However, I was saying things weren't as dire as the simple calculation made it out to be.

[Kidlicious]

I personally think that 'real' wages are the best measure of an economy.

[Ted Striker]

Yay! Less people doing more work!

Of course productivity is gonna go up.

duh

[Urban Ranger]

Originally posted by DanS
Whoha: You're using a median income growth figure that has been negative once since '72 to bolster Zkribbler's contention that the average worker is no better off now than then.

Then it's very damning. The median is a much more reliable figure than the mean.