Labor Productivity Is Looking Distinctly Unhealthy

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.


Labor productivity is in the dumps:

The longest stretch of productivity declines since the end of the 1970s is threatening to restrain U.S. worker pay and broader economic growth in the years ahead. Nonfarm business productivity, measured as the output of goods and services produced by American workers per hour worked, decreased at a 0.5% seasonally adjusted annual rate in the second quarter as hours increased faster than output, the Labor Department said Tuesday.

How big a deal is this? Just as a point of reference, here is labor productivity since the Great Recession:

Productivity increased considerably in 2009-10 as businesses shed workers but kept producing the same amount of stuff. In 2011 that stopped, and ever since productivity has increased at a modest rate.

Now, this is a bumpy series, as most series are, and you can see that there have already been two periods just since 2011 in which productivity stalled for a full year or more: 4Q10 through 4Q11 and 2Q12 through 3Q13. We’re now in our third: 3Q14 through 2Q16. The recent nature of this series is that it goes up, then plateaus for a while, and then goes up again. So in that sense, it’s too early to get too panicked about the current plateau.

On the other hand, it has lasted seven quarters now, so we ought to be a little nervous about it. Productivity growth is probably the single most important component of national economic activity, and it doesn’t inspire a lot of confidence to see it dog paddling along like this. So don’t panic yet, but definitely stay tuned.

DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate