Productivity up strongly while labor costs drop

[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

---

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

FULL story at link.

[BadgerKid]

1. Wondering how much is due to outsourcing, etc. n/t

[Sherman A1]

2. In the tradition of the last 30 years

workers will again be screwed.

[JDPriestly]

3. An businesses complain that Obama is not on their side?

If Obama is not on the side of business, then whose side is he on?

Until the economic gains due to productivity are shared more fairly, there will be no jobs. Demand will decline. And Americans will blame themselves or blame someone else. Obama needs to at least talk about this disparity which is causing some of our problem. The hordes of unemployed in countries like Egypt and China compete with American workers. They are so cheap. But they don't buy much with their meager paychecks. Economics is about the flow of money and resources and the wise employment of labor. When these things are out of balance, society ails. That is what we are seeing everywhere in the world.

[rrneck]

4. Fucked again. nt

[rhett o rick]

5. Wages are dropping like a rock. nm

[pinqy]

13. No, they're increasing

From Dec 2009 to Dec 2010, average weekly earnings for production workers went from $625.82 to $645.46, an increase of 3.1%, while inflation was 1.5%. Average wages for all non-farm employees went from $756.44 to $781.35 (3.3%).
Source: Bureau of Labor Statistics Tables B-3 and B-8

[PassingFair]

6. I wonder how much is do to a combination of over-working employees and

erroneous BILLING.

Companies are billing the shit out of people
and not providing any services.

They don't correct the problems unless the
customers figure out they're not getting
the services they contracted for.

[fasttense]

7. See trickle down does work.

The unemployed just need to hang in there until the corporate aristocracy pisses out another minimum wage, no benefits job.

If your employer pays you minimum wage, he is telling you that if he could get away with paying you less, he would.

[Psephos]

15. Most new job creation comes from small businesses, not big corporations.

70%, in rough numbers.

So the unemployed would be better off keeping tabs on small business for opportunities, not corporate aristocrats.

[defendandprotect]

8. The downward spiral speeds along -- into slavery ...

[Ichingcarpenter]

9. Does the increase of productivity reflect anything in regards

to the well being on the populace?

I think not .... but Wall Street is happy

That's why these statistics are dangerous if not but in their entirety.

kick/n

[Igel]

14. Sure.

It keeps inflation and prices low for manufactured goods. Since it's the populace doing the buying, they benefit.

It means that American manufacturers are more competitive, barring exchange rate problems, with overseas manufacturers. This helps exports *and* helps curb imports. This probably helps preserve more jobs than it costs.

It also provides money for investment, increased stock prices, or dividends, depending how the corporation decides to use it. My retired mother and my mother-in-law both depend on their savings. They count as "populace."

For companies, especially those who survived the recession, it can mean that they're recouping losses (not every company is dripping spare cash), which in turn would mean that they're going to keep on employing people.

The money also is there for increased employment benefits. My wife, for instance, got no salary increase this year at the start of the new fiscal year; on the other hand, she got a decent benefits increase because her employer covered 100% of the increase in her health-insurance costs.



There are drawbacks. Productivity can mean job cuts (even if long-term it saves jobs). It can mean people have to work harder (but not necessarily). And imports can help increase productivity--if I bring in a mostly finished item and finish it here, I've boosted productivity but in a squirrelly way (if the definition they're using allows this scenario).

[Zhade]

18. Keeps prices low? What planet are you living on?

NT!

[raouldukelives]

10. This is good news

Once labor costs have been reduced enough the jobs we lost to China and India will come flooding back. I only think it will take another 35-40% drop in costs and the White/Wall House/St. will rejoice.

[groundloop]

11. There are other not so cynical explanations as well

For example, my empolyer hasn't laid anyone off during this entire financial crisis, which meant that the work of 15 people was being spread among 17. Now that we're getting busier it's getting back to how it was - therefore (statistically) our productivity has increased over the past 2 years.

[county worker]

12. Those still working are working their asses off out of fear of being laid off too!

[plumbob]

16. Productivity is simply a code word for working harder for less money.

Can't give 'em a bonus or a raise, because that would change the ration of work/$, and that would show up as less productive.

Wish management was subject to the same scrutiny, since I doubt any CEO could show that their work output rose 10,000% in the last 30 years, even though their wages+bonuses have.

That's why Wall Street never saw a layoff they didn't like. That means those workers left will be doing more, ie, be more productive.

Like most economic jargon, it's a cover for things getting better for the elite.

[katnapped]

17. +1

More cuts are a comin, no matter what that guy behind the curtain is telling you. CEO salaries are still way too low and the proles are still living high on the hog, which is altogether unacceptable!