Labor Productivity Is Just Terrible These Days

Jobs figures for November will be released in a couple of hours, and the consensus forecast is that they’ll be fine. While you wait, however, here’s another chart to look at:

Productivity growth has dropped like a stone since 2005, and is currently hovering around 1 percent per year. That’s terrible. Unemployment is at 4 percent, which means businesses are employing a lot of people, but low productivity growth means this employment is only in lieu of investing in labor-saving machinery. After all, why bother with a big capital expenditure when future growth looks iffy and wages are flat? It’s easier and more flexible to just hire some cheap workers who can be laid off if business sours.

There’s probably something of a pent-up demand right now for labor-saving equipment, and the Republican tax bill’s bizarrely enormous incentive to pull all investment into 2018 might be just the thing to kick it off. If that’s really the case, we can kiss off any chance of sustained wage growth in the near future.

WE'RE TAKING A SHORT BREAK…

from the big banner at the top of our pages asking for the donations that make Mother Jones' nonprofit journalism possible. But we still have upwards of $300,000 to raise by June 30, whether we get there is going to come down to the wire, and we can't afford to come up short.

If you value the reporting you get from Mother Jones and you can right now, please join your fellow readers who pitch in from time to time to keep our democracy-advancing, justice-seeking journalism charging hard (and to help us avoid a real budget crunch as June 30 approaches and our fiscal year ends).

payment methods

WE'RE TAKING A SHORT BREAK…

from the big banner at the top of our pages asking for the donations that make Mother Jones' nonprofit journalism possible. But we still have upwards of $300,000 to raise by June 30, whether we get there is going to come down to the wire, and we can't afford to come up short.

If you value the reporting you get from Mother Jones and you can right now, please join your fellow readers who pitch in from time to time to keep our democracy-advancing, justice-seeking journalism charging hard (and to help us avoid a real budget crunch as June 30 approaches and our fiscal year ends).

payment methods

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