I don't believe the productivity figures--do you?

Great Debates
1

Here’s a quote I read on www.nationalreview.com recently:

Americans can produce much more with less — including fewer man-hours — than was required just 20, 10, and even two years ago. In the textile industry alone, productivity increased by 111 percent between 1980 and 2002, while employment declined by 35 percent. This dynamic exists throughout manufacturing and is the primary explanation for negative job growth in recent years. That being said, the unemployment rate still hovers just above record lows.

The link: http://www.nationalreview.com/comment/ikenson200403020852.asp

First off, I have no way to calculate on my own the above numbers. I only doubt them, and similar figures, in a general sense: that is, I don’t think total productivity throughout the economy has increased that much in my lifetime, nor do I think that our lifestyles have improved much as a result.

The figure regarding productivity increases in textile industry would seem to indicate that we now can produce the same amount of clothing with half the man-hours. This may be the case, but it is by no means the whole story. Why? Because those man-hours can be reduced in a variety of ways. The “best” is simply to invent techniques that allow for quicker/better production without extra capital (i.e., machines and physical technology).

However, much of the productivity gains do come from capital. However, the machines themselves must be built, and that labor ads its own man-hours to the total.

Let’s compare two technologies: the steam engine and the computer chip. A steam engine is something that’s relatively easy to build (once you know how) that can massively improve total productivity in an economy.

A computer chip is something extremely difficult to make (even once you know how), and which, it has credibly been argued, has not until recently improved total productivity in the economy.

That is, you may feel much more productive in your job with MS Excel, than did you not have it–but there is a literal army of hardware and software engineers
required to support that application.

I am not going to argue that there have been no productivity or lifestyle improvements in my lifetime (i.e., since 1971), but often the feeling is, “Where’s the beef?” (a poingant phrase from my youth).

Before I talk about what I think has changed, please keep this important point in mind: the new technologies of the day (Internet, etc.) require massive amounts of support. Hence, the overall boost they give to the economy is not as great as one would expect.

Please consider the above a separate discussion. Now I want to reflect on…

Life in the 70s vs. life today–how has it gotten better and more convenient for the average person living in a developed country? I think it’s been a case of 5 steps forward, 4 1/2 steps back.

The Internet is a great source of fun, entertainment, easy research, and convenient communication. I would not want to do without it. But other than the Net, there have been no whiz-bang tech developments in my lifetime. The rest is marginal.

We had cars, clothes, TV, movies, probes on Mars, magazines, airplanes, radio, home audio, etc., and the deal is basically the same today.

Certainly no doctor would choose to go back 30 years for his/her medical technology, but are probably, as patients, worse off than we were. AIDS is one big reason. What’s bigger is that fact that now it’s damn hard to die clean. I saw my dad die of heart disease over a two month period–torture only made possible by technology that could not save–only prolong.

When in the last 30 years have we been able to say, “Whew! Don’t have to worry about that any more?”

But getting back to my dissatisfaction with the productivity figures, here’s what really irks me. We grew up middle-class in Indianapolis. My dad worked, my mom did not. We had two cars, each replaced every 2 or 3 years. We had color TV, a nice house, good food, and nice dogs. My dad worked the basic semi-long hours and did the basic business trip thing. Nothing too hellish. He could get fired and have a decent job again in a month or so.

Fine, so productivity has “improved.” But I don’t see how my own deal is any better than my dad’s in the 70s. We don’t work longer hours than we did then. Every so often you hear one of those reports that says children will be worse off than their parents, etc. etc.

Where’s the beef, indeed!

So, my three questions for you:

  1. What do the productivity numbers really mean?
  2. Do you think lifestyles have improved in the last 30 years? How?
  3. How do the productivity numbers relate to the improvements/lack thereof in lifestyles?

Thanks for your input.

2

That should be “we don’t work shorter hours” than we did then. Among other errors. Forgive.

3

Surely you have some thoughts?

4

Dude, you have to focus your OP if you want a debate.

Offhand, your OP contains the following potential discussions:

a) Are the government productivity figures BS?
1) Something about fixed costs vs labor costs that I can’t figure out.

b) Is increased productivity good for the workers?

c) Has our standard of living improved any since the 70’s?

d) What innovations have made our lives better since the 70’s?
1) Medical?
2) Technological?

I don’t think the government makes any claims about productivity improving the lives of anyone except the companies who get to pay less labor costs for the same amount of product.

5

There is little doubt that productivity (value of output per hour of labor) has increased over the past decade, and certainly over the past three decades.

If, in 1970, your Dad had walked in to buy his car and asked for one with a 100,000 mile warranty, air bags, good gas mileage, 24 hour roadside assistance, and low pollution; what would he have gotten? The fact is that the quality and vareity of almost any class of products has improved markedly in the past decades. Cars are better, medications and surgeries are better, houses are bigger and better, etc…

Has this made us truly happier? Now that is the subject for a great debate.

6

You picked the example that works best: cars. Cars are “better,” no doubt. As to whether a 2004 Chevy gives greater pleasure than a 1970 GTO–well, it comes down to that “marginal” improvement I was talking about.

If you had to go back and live even in the year 1960, would you really suffer all that much? There would be some things to get used to, certainly–no Internet, no pocket calculator. Now go to 1975–you’ve got the pocket calculator.

As to what the other poster said–yeah, this is an unfocused mess–but let’s get sloppy and have a fine discussion, eh?

7

Let’s assume that the answer is no. What is the point, or what is the problem? If an average adult from any point in time had to travel back 34 years would he suffer all that much?

Is it possible that you are looking at advancements made over the past century and lamenting that similarly revolutionary advancements have not been made in your life time?

On another note, it might be instructive to look at the global economy during the decades leading up to 1970 as compared to the decades after that. I think it could be argued (althoug I admit I don’t have any cites or numbers to back this up) that America was at the zenith of decades of rebuilding the economies of the rest of the world. That is as the only large industrial nation not severly bombed during WWII or heavily depleted from WWI, maybe it was inevitable that America emerge as the dominant economy in the decades that followed.

This imbalance was bound to end at some time. It could be argued that it did some time around 1970. (plus or minus a decade or 2 perhaps).

8

It’s nice being anywhere at any time when you have money and good health. IMHO the big difference today (here and now) is the health and comfort of the poor and sick. It’s much better today.

Those motor powered wheelchairs make life a lot better if you need one.

Cataract surgery is available to most anybody who needs it.

Just getting rid of polio is marvelous.

There’s a zillion examples. Today is much better.

9

From here:

And, of course, this isn’t even touching on the millions of adults and children (1 in 6, by some accounts) who can’t afford any health care at all.

10

I think what you are really trying to ask is whether quality of life has increased or decreased since the period of time that you mentioned. In my opinion I believe the U.S. is on a decline in that sense. People tend to work more and make less these days. There’s a growing and greater gap between the rich and the poor. Traditional (non college) vocational jobs aren’t worth a damn if you want a decent middle class living. There are a few exceptions to this but the demand for decent vocational jobs far outweigh the supply. Plus the cost of living seems to be increasing in the U.S. which can’t be chalked up as simple inflation. I know several unemployed college grads with tech degrees who are basically left to mill around in society as unproductive laborers. Quite a few of the skilled jobs that require degrees are being outsourced too. I don’t see a complete collapse but I do see things getting worse as time goes on.

11

Although many would like to believe that the increased productivity numbers of recent years are a function of technology, the reality is that these numbers are more a function of workers spending more hours on the job. Why did workers work more hours? It all comes down to the American dream, Madison Ave., needing more money to maintain your place in society, pay your bills, buy a house, send the kids to private schools, buy an expensive car statement, take exotic vacations and so on. We have so much more today than past generations have had AND we have grown accustomed to luxuries that relatively few had only a short number of years ago. This has been a function of advertising and media. Kids these days grow up thinking that they are entitled to a certain lifestyle and that their parents have to provide this to them. But this can only go on for so long since there is only a limited time in a week. Someone working 80 hours a week isn’t necessarily producing the equivalent of 2 people working 40 hours (in fact, I guarantee that they aren’t), but the government would count them as doing so!

Also, in recent years, many more workers have been given a bigger “piece of the pie” in one form or another - either through stock options, increased profit sharing or bonus opportunities. Many have thought that by putting in more hours now, they would make enough down the road (usually through options) to cut back later or even retire earlier. Wrong! Even without management dictates, once a few workers in a department start working more hours, everyone else generally feels required to do the same for fear of losing their position, not getting promoted, not getting more stock options, being ostracized, etc. It’s like a snowball rolling down the hill.

While working more hours will generally produce more product, one side effect is that productivity numbers will appear to have increased at a faster rate and for a larger amount. You could go to the economic sites and lookup the numbers for increase in the average workweek over say, the last 20 years. You’ll find a steady increase. But the stats don’t show the full picture because, like most government numbers, they don’t trap all the data. Most government data up until recently has been focused almost entirely on manufacturing side of the economy. How do measure economic productivity in a services or software company? More services sold? More lines of code generated (not a valid measure by any means). More product sold? Isn’t that the function of the sales dept., not the whole company? Sure, others in the company may contribute some (particularly marketing) but how do get from here to increased productivity for the whole company? You can’t really make that logic jump. So you adjust and stretch the data, magically adjusting it to fit your needs and cover up anything that looks like an anomaly. People are working, business appears to be making more money, everyone should be happy, right? As long as the real truth doesn’t get out, we can keep up this charade for some time. But as in nature, the truth eventually comes out and we return to the mean.

Having worked for and with many technology companies over the years, I can tell you first hand that few make full use of the technology available to them. Hell, like the cobblers kids, few even use their own products or the methodologies that they pitch to others.

Most government numbers are just a shell game. I have said this for a long time but of course, government and business leaders refuse to acknowledge this. It would burst their bubble and truly show that the emperor (our economy) doesn’t have any clothes, that we haven’t really gained as much as thought over the years, that technology really hasn’t been the driver that people want to believe it is…

12

I’m not sure I can reconcile these two statements. Can you help me?

13

There are little ways that life is easier and much more fun now than it was in the early 1970’s.

Microwaves are in almost every kitchen.

Frozen foods actually taste pretty good.

Fabrics are so much easier to care for that I haven’t used my iron in years.

There are vacuum cleaners that drive themselves.

Air filters that down on the amount of time you have to spend cleaning and decrease allergic reactions.

Disposal diapers were created by angels.

My car air-conditioner doesn’t pollute the air.

I don’t have to take my clothes to a laundromat.

Balancing my checkbook and paying my bills don’t take hours.

I can be my own travel agent, detective, mail carrier, teacher, etc. through the net.

Phone calls are cheaper and clearer and more convenient.

Medications for clinical depression have had major break-throughs so that I have some measure of control in my life.

I can choose from more than thirteen channels on television.

I can own movies that I love and watch them whenever I like.

My piano doesn’t take up half of the living room and it sounds like a grand and several other instruments too.

My convertible does not leak and the top is easy up and easy down.

The sound from the CD player in my purse is better than anything I dreamed of in the 1970’s.

Shoes are more comfortable.

Tests for detecting breast cancer are improving.

I really could go on and on and on. Life is certainly easier and more pleasant for me.

14

What I was trying to say was the numbers are not valid because people are working more hours and in many families, both adults have to work to keep up the expected lifestyle (basically - spend, spend and spend some more). While there have been significant improvements in many areas over the past 30 years or so, the gains haven’t been as great as they seem on the surface and they have come at great cost to our social fabric. We work more hours, spend more on healthcare and pills, have more stress, have more divorces, spend less time as a family unit, feel less safe, etc., etc. But the government and media worship at the alter of improved technology and “productivity” gains as the end-all. Eventually, we will replace ourselves with robots and then we will have achieved the ultimate in productivity gain. I guess we will get what we want for free, since no one will be working and therefore won’t have any money to buy anything. :dubious:

15

But isnt’s productivity, as someone else put it in this thread, defined as value produced per hour of labor? Then if people were working longer hours but not producing any more, productivity would go DOWN, not up. And if the increased value produced were due entirely to people working longer hours, then productivity would remain unchanged.

Ed

16

So when you suggested that we have far more luxuries available to far more people, you were suggesting that this is a bad thing? That would make it clear.

I have said before, that in the future, we will have 2 kinds of people. Those who know how to program computers, and their slaves. :slight_smile: You’ll forgive me if I yearn for such a future in some way.

17

I dont believe the productivity numbers either. Obviously, companies are not reporting accuarately the part that americans build, and the part that foreigners build. All you gotta do, is go to the store, or car dealer, or electronics store, and see all the products and parts that were NOT made in america.

The productivity figures are “high” because american companies include the foreign labor that was used in making japanese steel, asian textile and electronics, and other cheap junk from china as being american made when they report. When the glass and steel of cars is from japan, the engine from Canada, the electronics from asia, and the upolstry from south america, there is less “manufactured” in that car from america than what is reported, even if part of the car was “assembled” in the US. Assembly is not manufacturing.

18

Can you provide us with a list of what is actually “produced” in the United States?

You cant have a genuine “productivity” number, if you are not producing anything.

19

There is absoluetly no doubt that things have improved even in the last 30 years. Its just those improvements are more intangible than previous ones. Think about say 1860 - 1960. You see the standard of living rising very visibly because more people can travel around, have houses, healthcare etc. That period was about satisfying human needs. Giving people ample food, shelter, running water and sanitation, healthcare etc.

Think about 1960 to now. The changes since then aren’t quite so visible. People still wear clothes, live in houses, have running water etc. But access to information has improved massively. The obvious example is the net of course. Even in the last 10 years i can think of one major change that has affected our lives profoundly. 10 years ago, most people only had land lines. Now i can make or receive a video call wherever i want.

So yes, things have improved even in the last few years. Its just because those improvements tend to be about information they are less tangible, and therefore less immediately noticable.

20

But if you had LESS people working more hours to produce the same amount, it would still appear that productivity was rising. And in pure statistics, it would be - less input, more output. But the quality of life of those working the extra hours and the quality of life for those not working any longer would be less. So the point is that productivity increase, in and of itself, is not always good. Something Alan Greenspan and the government don’t want the general public to understand.