Productivity up strongly while labor costs drop [View All]

[Omaha Steve]

Source: AP

By MARTIN CRUTSINGER

WASHINGTON (AP) - The work force was more efficient last year with productivity rising at the fastest pace in eight years. Labor costs fell for a second straight year, something that hasn't happened in nearly five decades.

Productivity, the amount of output per hour of work, rose a strong 3.6 percent in 2010 after a 3.5 percent gain in 2009, the Labor Department reported Thursday. Both years represented the best showing since 2002. Labor costs dropped 1.5 percent last year after a 1.6 percent decline in 2009.

But economists say the two-year surge in productivity is coming to an end as companies exhaust their ability to squeeze more output out of depleted work forces. They look for more hiring in 2011 which will help boost incomes.

Consecutive annual declines in labor costs have not occurred since 1962 and 1963 and underscored the pressure that workers' wages have come under during a deep recession which saw 8.4 million jobs disappear.


Read more: http://apnews.excite.com/article/20110203/D9L5B9101.html

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So workers will get a raise or a profit sharing check?

FULL story at link.