MSNBC's "Productivity grows at fastest pace in 6 years" article: Silver lining wraps fat black cloud

[Amerigo Vespucci]

Glass half empty? Glass half full? Your decision.

:patriot:

Productivity grows at fastest pace in 6 years
Labor costs fall; July factory orders increased less than expected

http://www.msnbc.msn.com/id/32655208/ns/business-stocks_and_economy/

updated 8:04 a.m. PT, Wed., Sept . 2, 2009

WASHINGTON - Worker productivity, the single biggest factor determining living standards, grew at the fastest pace in nearly six years in the spring while labor costs fell by the most in nine years, as companies slashed costs to survive the recession.

Increases in productivity can help boost living standards because companies can increase wages financed by rising output. But during the recession, companies have been using their productivity gains to bolster their bottom lines as many struggle to stay in business.

This cost-cutting helped many companies report better-than-expected second-quarter earnings despite falling sales. But economists worry that such aggressive cuts will make it harder to mount a sustainable recovery. That's because the lack of wage growth and shortage of jobs will depress household incomes and make the prospects for a sustained rebound in consumer spending less likely.

Consumer spending is critical to the recovery since it accounts for about 70 percent of total economic activity.

[provis99]

1. so workers are working harder for less money?

why is that a good thing?

[valerief]

2. Rich people get richer. nt

[Amerigo Vespucci]

4. Because MSNBC likes "Productivity grows at fastest pace in 6 years" headlines

"Productivity" has always meant something along the lines of "We just fired the guy next to you, so now you'll be doing your job AND his."

What I get from the story is that workers are working harder, and the money that would normally go into performance / merit increases is being pumped into the company's bottom line instead, which means that the people keeping the company afloat can't afford to buy anything, so the "recovery" looks great to some bean counter in the back room but not the mom and pop trying to put food on the table.

[FarCenter]

10. "Productivity" as economists use the term doesn't have much to do with "working harder"

It is just Gross Domestic Product divided by Hours Worked.

There are lots of factors involved. It doesn't necessarily mean that someone shoveled 17 tons of coal instead of 16 tons.

[Cant trust em]

3. I think the glass half full/empty analogy pretty much sums it up

Some people are comfortable with the idea that things are still on the way down, yet others will snatch at any glimmer of recovery as a sign that things will start booming again.

[ChairmanAgnostic]

6. glass half empty / cup half empty

[KansDem]

5. A couple of years ago, my daughter brought home a kitten...

He was very anemic and frail. We took him to the vet and he diagnosis the kitten has having a worm. A worm that was taking nourishment from the kitten

The vet gave us a prescription for the kitten to remove the worm and after a short while, he began to thrive! He grew quickly as now the worm was gone!*

We might see an analogy here--
1) The kitten is the economy
2) The worm is Bush
3) The health of the kitten is the health of the economy.
4) The vet is the election of 2008
________
*true story...

[MisterP]

11. dunno, Geithner is pretty worm-like

is this a pre-Semmeleis, pre-Lister vet?

[gratuitous]

7. Productivity has gone up pretty steadily since the 1980s

But worker compensation has lagged behind the rate of inflation. The question is, where is all the additional wealth going that's being generated by these productive workers, if not to the workers producing that wealth? Boy, that's a stumper that is. Please remember that if we raise the tax rate on the overrich from 35% to 38%, we risk completely destroying America.

[izzybeans]

8. Interesting the "journalist" can juxtapose these two thoughts in the same opening sentence.

"Worker productivity, the single biggest factor determining living standards, grew at the fastest pace in nearly six years in the spring while labor costs fell by the most in nine years."

Doublethink is pervasive in our economy. Why refute yourself in your opening line? Just leave out the b.s. about productivity and standard of living. Our standard of living is dependent upon what they pay us, and each recession proves that pay decisions are independent of productivity.

The glass is half-empty for the few, yet half-empty for the rest of the lot. And the rest of us are quickly drinking that bottom half to stave off exhaustion from being overworked and underpaid.

[wuvuj]

9. "Productivity grows at fastest pace in 6 years"

...means that the gerbils are running faster and faster in their exercise wheels?

Most gerbils fear the Reaper?

Wall St should celebrate....

[Political Heretic]

12. Productivty is not a good economic indicator unless it is paired with rising employement and wages

If wages are flat or declining and unemployment is rising then all this statistic means is corporations were able to drive their remaining employees even harder and those employees are unable to find better jobs and afraid to fight back for fear of losing their job....

Great for Big Corp, not great for sustainable growth.

[Stinky The Clown]

13. Fewer workers, working harder, for less money = productivity increase

Kiss my productive ass.