Are we working smarter — or harder? darker side of U.S. productivity

[dArKeR]

For several years now, economists from Alan Greenspan on down have been praising the tech-driven improvement in the productivity of the U.S. work force. The theory is that, as computers allow us all to produce more with less work, our incomes will continue to grow and our standard of living will rise. But there’s a darker side to productivity that some economists are now beginning to look at more closely. Simply put: Are we all really working smarter? Or just a lot harder?

UNFORTUNATELY, the answer can’t be found in the blizzard of economic data churned out by the government every month — for the simple reason that the formulas used to measure productivity don’t care whether you’re working harder or smarter.
       But some economists are beginning to acknowledge that as cellular phones, home computers, and fax machines lengthen the tether to our jobs, a big chunk of those rosy productivity gains are really coming from a fundamental shift in the workplace that is leaving us all toiling longer and harder.
       “I believe that is a permanent and unreported, unrecognized outgrowth of this expansion of information technology,” said David Jones, a longtime Wall Street economist and now a private consultant. “Everybody works harder in their own ways. But some of that is misread as higher productivity.”

http://www.msnbc.com/news/952422.asp?0cv=CB10

http://darkerxdarker.tripod.com/

[rapier]

1. Bullshit

THe computer aspect of the 'productivity revolution' touted by Greeenman is simply bullshit. Much of this 'productivity' is a statistical game having to do with computers themselves. As you know a 2Ghz computer costs half of what a 1 Ghz did 18 months ago. So the statisticians can say that new computers are 400% more productive. (this example is a shorthand explaination of the thinking that goes into the adjustments cooked into the numbers, exactly how they produce the numbers I don't know.) They have a term for this sort of thing, hedonic adjustments, and the productivity numbers are filled with these things to the point that they are totally without meaning.

The 1 Ghz computers processer was idle 90% of the time and the new 2Ghz one is idle 95% of the time. Nothing is being produced more efficeintly. in this case. Sure, the porno page pops up a second quicker. Oh boy, that's productivity, Greenman style. It is total BS.

There has been some productivty increase due mainly to cutting of jobs. Some of these were pure waste. We all know there are lots of dead meat in any company. Often a certain number of workers can be cut and actually nobody has to work any harder and all is well. Of course more often more work is required by those left.

Still, the productiviy gains are mostly statistical voodoo and companies suffering stagnant or falling orders can get by with lean oranizations but if they need to ramp up production many compaies will not be able to , efficiently, productively.

[Code_Name_D]

2. Scribble scribble…

That is me taking notes.

But I have some notes of my own. Lessons learned from another thread where this subject came up.
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=114&topic_id=492#514

The arch argument given is that "technology, by achieving grater efficiency, has reduced the need for human labor." Some would even argue that new technologies have rendered manufacturing itself irrelevant, moving us to information technologies.

But we now see Enron-style book keeping (one of these days, we are going to have to define what the Enron effect truly is.) at work on our productivity side. Enron said that they were making my by looking at all of the incoming receipts, while also ignoring the outgoing expenses being sent to the vary same companies that they were getting the receipts from. Well obviously we have the same thing going on with out data. He have increased productivity, but because we can toss an encyclopaedia between New York and Tokyo fifty times a second.

The drive for this is simple. Explain away the most significant indicator of depression. No, not unemployment, but your close. It’s the size of the labor force vs its wage. Both are shrinking, rapidly, and its difficult to argue that this contraction in the labor force and wages earned do not also represent a contraction of the over all economy. In the 1920's, it was the labor side that was arguing that automation was costing jobs, prompting them to resist automation. But today, the argument is twisted around to a freakish dimension that now it’s the CEO that makes the same argument, in order to justify the lay offs and pay cuts. Also to argue that this is a natural part of the changes that globalization brings.

But this is false. At an economic level, the role of technology is way over blown. At its root, economics is born of human existence. Humans need to eat, drink water, have shelter, and fuel to cook with as well as fight the winter. Fulfilling these needs is the sole function of economics.

In a primitive economic system, nearly all recourses must be directed to this simple task. There are few extra recourse remaining. But with a modern economy, basic needs are far more easily met, leaving more resources such as time and energy to other pursuits. But this is less to do with technology, than with how human organize their society. The Greeks, or arguable the Egyptians were the first to master it in what we think of as the Western Sphere of influence. But China may have managed this even sooner. But the isolation between the two spheres doesn’t diminish the accomplishment. When humans started to specialize in their tasks, and trading to fulfil the rest of their needs. This specialization promoted additional efficiency that freed up recourses for other things such as art, music, entertainment, even worship, and exploration. These things produced demand for new products and services above the basic necessities. Greater productivity, only results for grater demands, fueling that which we call the economy.

The flaw in the supply siders think in that increased productivity doesn’t result with less labor, but more demand for other things, demand shifted from necessities, to luxuries. Technology only adds to this, it hasn't enabled any thing. But this still depends on human existence and human nature remaining the center of the economic system.

But this isn't the case. Today, the center of the economic sphere, are profits for investors. But profits for profits sake neither has needs, nor demands. As it has no demands, it has no need for luxuries, and demands for services and goods contracts. All the innovations in the world are futile against this reality. But human beings are no more than teeth on the cog. We are no more than cattle driven to the mall, to buy things for no more than others will it, while still not sparing us even the means for us to pay for that which we are expected to buy. Those outside the machine, are irrelevant, a waste of space who drink water and eat food better fit for the holders of profits. They may as well die, for they have no place in this economy. And thus, the economy contracts even more.

[ThJ]

3. Productivity

Rapier,

As you know a 2Ghz computer costs half of what a 1 Ghz did 18 months ago. So the statisticians can say that new computers are 400% more productive.

I think they are taking the reduced into account as it increases profits, which is the aim of increasing productivity. I can't prove that; it's just an educated guess.

Sincerely,

[Code_Name_D]

4. It dosn't reduce accouts however

It increses them. To fully ruelize this technoligy, you must replace your whole computer system every 18 months. And doing this is expensive, especualy when you keep doing it.

Usualy, these updrages are listed at "one time expensises." But how one time is it if you keep doing it? This is where corpreate debt is comming from.

[TrogL]

5. There's added costs

to replacing your computer system besides just the purchase price.

You've got to install some sort of OS, re-install all your software, setttings and preferences and then retrain in the idiocyncracies of the new system.

Your IT person has to dispose of your old computer, especially its hard drive, which may contain sensitive data.

It's an absolute minimum of four man-days, all just to support a word-processor whose functionality hasn't changed significantly in five years. Oh, and solitaire, the greatest waste of man-hours ever invented.

[swinney]

6. check basic question

PRODUCTIVITY INCREASE

PER HOUR IS KEY

YOU CAN PRODUCE 8 IN 8 HOURS AND 10 IN 10 HOURS BUT YOU ARE NOT MORE PRODUCTIVE.

PRODUCE 8 IN 8 HOURS AND 12 IN 10 HOURS YOU ARE MORE PRODUCTIVE.

[German-Lefty]

7. I remember hearing Bush say worker productivity is a good sign.

I thought it was funny. All the unproductive jobs and companies were liquidated. That's probably not a good thing.

[rogerashton]

8. Productivity numbers are produced in this way:

If "real" output per person is greater today than it was in, say, 1990, it means (matter of arithmetic) one or both of two things:

1) The average person is able today to afford a standard of living (comprising all sorts of goods and services) that she could not afford in 1990.

2) The average person today is purchasing different goods and services today even though she could afford to buy the same goods and services that she did in 1990.

If both of these are true at the same time -- the average person COULD NOT afford in 1990 what she buys today and she COULD AFFORD to buy today what she bought in 1990 but CHOOSES NOT TO -- then it is hard to avoid the conclusion that she is better off.

And, despite all the stories people tell, it turns out that both 1 and 2 are true.

Of course, this considers only goods that can be bought for money. Those that cannot (clean air, safe streets) may tell a quite different story.

Despite all the talk about productivity being "voodoo," the rapid growth in that number means that the existing standard of living for 250 million workers can be produced by fewer workers than before, and the number required to do that is dropping at an increasing rate, which in turn means one of three things:

1) Workers' standards of living rise,

2) Fewer jobs are available, or

3) Income and consumption by the rich increase more rapidly than production does, making the distribution of income and consumption more unequal.

Do 2 and 3 ring any bells?

[Code_Name_D]

9. Well, my bull shit alarm went off, if that is what you mean.

1) The average person is able today to afford a standard of living (comprising all sorts of goods and services) that she could not afford in 1990.

2) The average person today is purchasing different goods and services today even though she could afford to buy the same goods and services that she did in 1990.

And, despite all the stories people tell, it turns out that both 1 and 2 are true.

Not so fast. While technicaly true, you have to take into acount a list of other facters.

1) Savings vs debt. - Ever sence 1970, we have seen not only the depleation of saviongs but an ever deeper dive into debt to pay for these things. Things such as equity must also be taken into acount. Folks use to own their own home, now they tend to have three or more morgadges on it. Retierment savings is also erroding rapidly.

2) Income security. - Today, no job is safe, and credit lines for most folks reflect this as the bank is begining to not trust even secure jobs. Here today, gone tomarow is the rule of the day. But banks don't perticuler care any more becase they hand off loans to finacing companies, who then hand the risk back to the tax payers to eat.

3) Esenchal spending vs. non-esenchal spending. - Things such as health care is skyrockiting, and is now so expensive as to be prohibitive for most. And cost are still climbing. As these cost go up, productivity (as you seem to define it) must go down.

4) Public infrastructure. - Having a good public transportation system, or bridges across rivers also has an effect on personl productivity. When these things are removed, productivity is hurt, as well as cheaper alternitives for basic neads taken away. This has a nasty effect of turning a luxture, such as a car, to a necasity, for the need for transportation to and from work.

[rapier]

10. link

http://www.morganstanley.com/GEFdata/digests/20030905-fri.html#anchor0