That drop in worker productivity? Don’t blame us!

John Ydstie’s story on All Things Considered last night about the stagnant worker productivity was distressing in so many ways, not the least of which is the subtle suggestion that we’re somehow goofing off at work.

The mystery for economists is exactly why the productivity of U.S. workers has stagnated in recent years. Their ability to increase their output per hour has been a pillar of economic growth.

Let me take an anecdotal stab at that: There’s only so much blood we can deliver.

Productivity gains have fueled the nation’s economy because employers adopted a slash-and-burn mentality, chopping employee after employee and forcing those left behind to pick up the slack.

And they did, to their own detriment. They started working more from home instead of spending time relaxing. They stopped taking vacations. They went to work sick. They started giving more of themselves to their employers because they were afraid of what would happen if they didn’t.

Americans now take a full week less vacation than they did between 1978 and 2000, according to Project Time Off. More than half of American workers left vacation time on the table in 2015, the research says.

As worker productivity increased in the past, wages stumbled to keep up.

Meanwhile, 35 percent of employed adults say the Internet, email and cell phones have increased the amount of time they spend working, according to the Pew Research Center.

Curiously, the very inventions that allowed employers to tether us at home are blamed because they infiltrate the workplace.

“Things like … tweeting, Snapchatting, things that to me are unlikely to raise industrial productivity and may, by the way, reduce that. I’m thinking of things like Facebooking when on the job and other things like that,” Princeton professor Alan Blinder says.

They’re spending some time on Facebook at work? Here’s a tissue, America’s bosses.

… Blinder says productivity may sound a little bit boring but, he says, “that is the well from which wages come and wages are, for most people, the well from which their standard of living comes.”

If that well runs dry — as it nearly has — you’re in trouble. If you can’t produce more output in every hour you work, your employer can’t afford to give you a raise. And if you don’t get paid more, your standard of living stagnates.

Blinder says during most of the past century, U.S. workers increased their hourly output by about 2.3 percent a year, and at that rate, standards of living rise rapidly.

Economist Robert Gordon of Northwestern University tells Ydstie that the lack of innovative technology having any impact is a leading reason for our stagnant productivity.

Washington Monthly offers another view: American worker productivity is a myth. It cites two New Hampshire firms, one just increased its investment in its production in the Granite State. One just moved it operations to Texas and Mexico in search of cheaper labor. Both will likely show gains in productivity, but only one was good for the worker.

How, then, can we become a nation where it makes economic sense for more companies to behave like Hypertherm and invest and create jobs in the U.S.? As is often the case, the first thing we need is a better understanding of the problem. We honestly don’t have a clue about what’s really going on in the U.S. economy. What’s worse, we think we do.

Often, despite all the signs that the blood is draining out of our economy, and particularly our manufacturing sector, our highly problematic national productivity statistics can make it seem like we already live in a nation full of Hypertherms—companies honing their operations at home. Journalists and politicians can easily enough find examples of companies that are genuinely increasing efficiency of their U.S. operations, and generalize these examples to the entire economy. A mostly upbeat April 2011 Associated Press article, for example, attributed the weak job market to rising productivity, claiming that “U.S. workers have become so productive that it’s harder for anyone without a job to get one.” The proof? National productivity statistics, plus one example of a plastics company that was able to produce a part with fewer people. The growth of global supply chains was not mentioned.

The American workplace in the last decade is to do more with less. It was doomed to eventually fail.

  • >>“Things like … tweeting, Snapchatting, things that to me are unlikely to raise industrial productivity and may, by the way, reduce that. I’m thinking of things like Facebooking when on the job and other things like that,” Princeton professor Alan Blinder says.<<

    NewsCut…they forgot "commenting on NewsCut" as one of the chief time-suck platforms.

    • Jeff

      I’m pretty sure NewsCut makes me a better informed and hugely more productive employee.

    • jon

      It isn’t even the commenting that takes that long, it’s the hours of research and number crunching, to ensure that the post is accurate that really eats up the time…
      And that isn’t even taking into account the hours of following various wikipedia links…

  • Mike

    There’s a theory that the Cold War was indirectly responsible for progressive economic policies. Meaning: as long as there was the threat of the big, bad USSR and to a lesser extent China, it prompted capitalism to mitigate its worst tendencies by allowing the creation of a social safety net, benefits, etc. The idea was that this took the wind out of the sails of leftists in what we used to call the First World, making socialist revolution much less likely.

    With the demise of communism as we knew it in 1991, according to this theory, capitalism has reverted to its former self: maximizing shareholder value and enriching those at the top of the social pyramid at the expense of everyone else. Whether this theory correctly identifies the root cause is debatable, but no one can dispute that inequality has risen in the last 25 years, or that workplaces in many ways are less hospitable to the interests of the average employee than they used to be.

    • Tim

      This idea goes back even further than that; Teddy Roosevelt was touting these economic policies for the same reasons in the very early 20th century.

  • Fred, Just Fred

    In my experience, it is automation that has peaked productivity, not overworked employees. Workers are not being tasked with more work; when a process is automated, it simply takes less people to produce more products. Capital automation projects are sold using highly accurate, measurable, return on investment numbers.

    We are at a technology plateau right now, but that doesn’t mean production won’t see new heights in productivity. 3D printing, nanotechnology and AI will soon reach a state of viability that will increase production, but result in less employment for unskilled human beings. The days of an employees value being measured in widgetshr is long gone, and barring a collapse of society, will never be coming back. Unions will soon be relegated to unskilled services, and until it is outlawed, government employees; bet the farm…or agribusiness.

    Unfortunately, I don’t think the memo has been distributed widely enough.

    I have marked a decline in young Americans entering engineering, science and medicine; I now see more kids from other countries in our intern programs than American citizens. We really need to start focusing our resources towards productive fields; every time I see someone touting an advanced degree in some specious “studies” field I cringe. What a waste of intellectual and financial resources!

    Contrary to what we’ve heard from leftist politicians, I don’t believe everyone should go to college; not everyone needs to go to college. There are excellent technical trade schools (Dunwoody for instance) that not only provide the education needed to land a very high paying, secure career, but save the taxpayer millions of dollars being wasted on building an obsolete, and yes, unproductive university system.

    If you are working a job that requires you to work yourself to a frazzle to feel secure, the memo is writ large on the wall; you are working a dead-end job.

    • I’m always intrigued when people equate the trades with being uneducated or less educated. Reminds me of Mike Rowe’s commencement speech in which he suggested people shouldn’t chase their passions; they should do jobs that are needed in the trades. As if people in trades aren’t chasing their passion.

      • >>As if people in trades aren’t chasing their passion.<<

        No kidding.

      • Fred, Just Fred

        You are imputing my observation with a feature it never had. Skilled trades, and yes, the “skilled” part is important, inherently implies education. Education is not relegated to leafy institutions of higher learning; it happens where it happens.

        Though I haven’t heard it, I have heard *of* Rowe’s speech. If I understand his point correctly, he is saying chase your passion, but don’t count on your passion to provide you with a viable means of support. That is simple common sense [if your passion happens not to be one that has a marketable value]. The market for crochet plant holders is not very hot, as an example.

        As to trades, in my opinion, you have confused a passionate interest with a passion for doing excellent work. No one enjoys hauling shingles up on a roof in the summer heat, but a passionate tradesman might stand back and admire his straight rows and edges. Another job well done…nothing wrong with that.

        • // he is saying chase your passion, but don’t count on your passion to provide you with a viable means of support. That is simple common sense.

          It really isn’t for the reasons previously mentioned. He is making a false equivalency between passion and a viable means of support. As if we should choose.

          The same with a passion for doing excellent work with a passionate interest. Why are the two different. My guess is that nobody lasts long in any job in which they don’t have a passionate interest.

          This is the flaw of Rowe’s argument and it’s also where it betrays his view of the tradesperson.

          I remember meeting a guy in Vermilion some years ago. An Iraq War veteran. He didn’t know what he wanted to do post-war and he didn’t come home unscarred. Then he stopped in at a water treatment plant and he discovered his passion. It’s the wastewater process.

          Sometime we don’t know what our passion is until we find it.

          http://blogs.mprnews.org/newscut/2009/01/on_campus_the_wastewater_treat/

          As with so many things in public discourse, we are inclined to draw lines that says “there’s this” and “there’s that”. You can either be on this side or on that side. The world — life — is far, far more nuanced than that.

          Everytime people flush their toilets, we should remember that there are people who are passionate about the work.

          • Also, how do we measure this guy’s productivity?

          • Fred, Just Fred

            Just read the link. I detect plenty of common sense in this fellow, but zero “passion”.

            On a lark, he decided to take a tour of some water treatment plants, “and every time I went there I noticed all the employees were older and getting ready to retire.” It’s an interesting fit in a bad economy, he says.

            “I like the process of it because it’s a little bit hands on compared to most jobs,” he said. For example, someone’s got to keep the bugs and protozoa that eats the waste alive and happy. “If you can handle the smell, it’s not too bad,” he says. “They’re still hiring at a decent rate,” he says

            This fellow has read Rowe’s book. He’s gonna do just fine.

            BTW, there is a connection between this guy and me. He noticed the staff was getting long in the tooth, with no young Turks ready to take their places.

            After my 2nd year in college, I had an internship that changed my path with kind of the same epiphany. I was going to declare a ME major, but while working my summer job I noticed the mechanical engineering department was huge, while the electrical engineering department only had a few guys. I liked the odds in competing with fewer candidates and declared an EE. Worked out pretty well for me, and I hope for him.

          • Except that I asked him about where his passion came from and that’s his response. He said he had a passion for it and it’s not really up to us that says he doesn’t.

            In fact, I probably asked 100 people about what led them to their choice of career during that “tour” I did that year and was quite uplifting.

            So, again, I think people do it a serious injustice when they denigrate the people who choose a career that can offer them a viable means to support themselves as somehow not being connected to a passion.

            In fact, the only people I ran into during that “tour” whose choices didn’t reflect a passion were frightening. One was the woman studying to be a social worker with an eye toward getting into child protection. Why ? Because her kids were taken from her and she wanted to get back at the system , and chose to do it from the inside. She coulda used a little passion.

            I also think “passion” has been used as a substitute for chasing unrealistic dreams.

            I met these young people in the spring and they ALL had incredible stories of what passion brought them to this point. They’re going to be able to write their own check and employers will be falling over themselves to hire them.

            http://blogs.mprnews.org/newscut/2016/05/when-shakespeare-harry-potter-and-yoda-explain-science/

            As I indicated before, I think it’s a far complicated issue that Rowe simplifies because that’s his show. The choice of a career shouldn’t be merely passion. Obviously marketplace and situation has a great to do with it, too.

            By and large, I think kids are making pretty good decisions. And it is human nature for us to insist that they’re fools, and that they’re not. Just as our parents’ generation did. It’s how people feel good, I guess.

          • Fred, Just Fred

            I apologize, but I’ve got to push back. Your final words in the linked story are a counterpoint to the argument you’re making now:

            Not that the economic downturn hasn’t stung. “My retirement fund I’ve been working since I was 18 has taken quite a hammering. There’s recessions every once in awhile and you just have to go with the flow.”

            Which is his plan.

            Going with the flow doesn’t really speak to following one’s passion, in my opinion. I don’t for a minute doubt you asked him about his passion Bob, but his answers all suggest his passion is pragmatic self-reliance and planning of the sort our friend Mike Rowe would approve of.

            Now your second link does speak about people that have a passion for their work. But it also speaks to my point about professional careers in science and engineering vs skilled trades. Scientific research is fueled by passionate interest in the subject being studied; it’s an inherent part of the process.

            Who knows, maybe someday Kristian will wax eloquently about his love for waste treatment in a way that illustrates a passion for it, but for the evidence you’ve provided, we have a guy making good decisions irrespective of what might interest him personally.

            I also must push back on the notion I’m denigrating trade labor in any way. If your work provides you with a living in return for something of value, it is worth doing in my opinion; and there can certainly be pride in doing any job well. The catch, as I see it, is there is less opportunities in the future of many trades, and none in unskilled piece work.

            As I’ve said, not every one should go to college or needs to go to college to get an valuable education or a good job. And not every good job requires a passion for the work to provide value to the person doing it.

            As to Rowe, well I guess we’re just looking at his position from different sides of the prism of life.

          • Fred, Just Fred

            He is making a false equivalency between passion and a viable means of support. As if we should choose.

            Behind every waitress is a passionate actress that knows her shot is just around the corner. This is America; home of the free. We can be what we want to be….

            Except that life, miserable crusher of dreams, forces choices on most of us that are passionate about paying for our dinners.

          • >>Everytime people flush their toilets, we should remember that there are people who are passionate about the work.<<

            Then there's THIS guy:

          • JamieHX, reducing productivity

            Although usually my least favorite part of any Red Green show, this is a nice humor break here.

        • Joe

          Everyone has a part they don’t like about their job, and their passion. Whoever has the job of making crochet plant holders probably also hates the part where they have to go buy more yarn at Michael’s. Does that mean they are no longer chasing their passion? No.

          My dad is a laborer. Loves it. If we could pick any job in the world, maybe he’d find a better one, but the one he has is certainly in the top 10. He doesn’t make a ton of money, but he does what he wants. It is his passion.

    • Tim

      Except that the data for PhDs awarded in the U.S. goes against what you are claiming, per the NSF:

      https://www.nsf.gov/statistics/2016/nsf16300/digest/index.cfm

      As of 2014, the most recent year for which there is data, 75% of all research doctorates awarded in the U.S. were for science and engineering fields, and the numbers have been growing since the early 2000’s, so we’re already doing what you say we need to do.

      • Fred, Just Fred

        Lot more to digest in the data than that, Tim.

        In every broad field of study, the share of doctorates awarded to
        temporary visa holders is larger in 2014 than it was 20 years earlier.
        Temporary visa holders are most prevalent in engineering and physical
        sciences. In 2014, temporary visa holders represented 55% of doctorate
        recipients in engineering and 45% of those in the physical sciences.

        The fields where American citizens are holding their own are Humanities and “other non- S&E fields”.

        And to my point:

        Historically, postdoc positions have been a customary part of the early career paths of doctoral scientists in the life sciences and physical sciences; such positions are also becoming increasingly prevalent in engineering and social sciences.

        However, the proportion of doctorate recipients taking postdoc positions in the United States declined in 2014 in physical sciences and engineering, and the proportion increased only slightly in life sciences and non-S&E fields. The proportion of doctorate recipients accepting U.S. postdoc positions has increased more sharply in social sciences than in other fields over the past decade, climbing from 31% in 2004 to 37% in 2014.

        Don’t misunderstand, research is critical, and the work cannot be measured in mere “productivity” calculations. But the number of PhD’s isn’t really an important measurement of our country’s educational focus taken as a percentage of the whole population.

        • Tim

          I guess I’m not going to get worked up about just over a third of doctorates going to temporary visa holders, especially when the percentage is down from what it used to be. And engineering is the only field where the majority of doctorates are going to non-US citizens or permanent residents.

          Plus, every field has seen an increase in temporary visa holders getting doctorates — “Other non-S&E fields” has seen the same percentage change as engineering. And even among the sciences, the social and life sciences have seen fairly modest changes.

          And no, research doctorates aren’t the be-all and end-all of educational focus; that is true. I’d like to see this data for master’s degrees, for example, and professional degrees. But it’s a counterpoint to the idea that nobody is studying the sciences or engineering in this country anymore.

          • Fred, Just Fred

            There isn’t anything I can see to be gained in getting worked up at all; it is what it is. With respect, I don’t think I said no one is studying science or engineering, in fact I’m sure I didn’t. I merely made an observation based upon first hand experience, that the data you provided lends credibility to. Less Americans are pursuing technical degrees than in the past.

          • Tim

            But your last sentence is demonstrably untrue when you look at the actual numbers to which I linked. In terms of overall doctorates granted, more Americans are pursuing these technical doctorates now than did so in the past — go look at the data tabs if you want to see what I mean. It’s the percentage of who is getting these degrees that is changing.

            While you didn’t say nobody was studying science or engineering, you did say you cringed when you heard someone had an advanced “studies” degree and felt it was a waste. The point I was trying to make with my data was that there really aren’t that many of these out there relative to other types of advanced degrees.

            Now, if you want to argue that across all degree types, less Americans are pursuing technical degrees than in the past, fine — but let’s see some data for that.

          • Fred, Just Fred

            OK, let’s stick with the data you’ve provided.

            The number of doctorates in S&E fields awarded to temporary visa
            holders grew to 13,739 in 2014, a 45% increase since 2004 and a 2%
            increase since 2013. The number of S&E doctorates awarded to U.S.
            citizens and permanent residents also grew in 2014 at a comparable
            rate—a 42% increase since 2004 and 2% growth since 2013.

            In 1994, 29% of all S&E doctorates were awarded to temporary visa
            holders. The proportion of S&E doctorate recipients holding
            temporary visas increased to 41% by 2007 but has since fallen to 37% in
            2014.

            Permanent residents are not American citizens. Although some, perhaps many, will apply for citizenship it doesn’t support your argument. The tables mix the two demographics, which is a shame, but taken together with this chart ( https://www.nsf.gov/statistics/2016/nsf16300/digest/theme2.cfm ), we see an undeniable decrease in US citizens studying hard sciences and engineering.

            Over the past 20 years, temporary visa holders earning doctorates have
            been increasingly likely to stay in the United States immediately following
            graduation, a measure referred to as the stay rate. In 1994, more than
            half of doctorate recipients holding temporary visas reported definite
            post graduation commitments for a postdoc or other employment in the
            United States; by 2014, the stay rate had risen to three-fourths.

            Because there is more opportunity here for them.
            https://www.nsf.gov/statistics/2016/nsf16300/digest/theme4.cfm

          • Tim

            Correct, we don’t know how many of them are permanent residents and how many are citizens, so I don’t see how it would hurt or help my argument either way. It would be nice to know the actual numbers, but we don’t. It’s entirely possible that there are both more citizens getting these doctorates at the same time that more permanent residents are too.

            And again, those graphs show that the *percentage* of doctorates being granted to citizens/permanent residents vs. visa holders is decreasing, *not* that the total numbers are. This is clearly shown when you go into the tabs and look at the actual totals. There are more doctorates being earned across the board.

          • Fred, Just Fred

            There are more doctorates being earned across the board.

            Well there we agree.

          • JamieHX

            FEWER!

          • JamieHX

            I couldn’t hold back any longer — it’s the fourth or fifth time In this conversation. You guys are pretty smart — how don’t you know that?

          • Fred, Just Fred

            I stand corrected; you are right.

          • Tim

            We’re going to play that game? Okay:

            1. “in” should not be capitalized in the middle of a sentence.
            2. “how don’t you” is grammatically incorrect; “how come you don’t” or “why don’t you” would be correct.

            We all make mistakes.

    • Carl Crabkiller

      A decline in worker productivity indicates that workers are working more hours and producing less. I have no clue as to why, just an observation.

      • The second link provides some really good material on that.

      • kennedy

        To be more specific, workers are producing less value. This is not necessarily the same as producing less. Fax machines are not as valuable as in the past, and the labor spent assembling them is less productive. Someone assembling fax machines today would produce less value than 15 years ago even if they produced the same quantity per hour.

        Assigning productive work is the job of management. The declining productivity of labor hours could result from management not making the best use of the labor hours.

    • Rob

      And AI isn’t just displacing unskilled workers; more and more legal, medical and engineering functions are being done by algorithms. Also, I think if you pay attention, you’ll note that it isn’t just rightist politicians who talk about the value of education/learning/training options that aren’t college-centric.

  • MarkUp

    All that research and not a single mention of Parkinson’s Law.
    https://en.wikipedia.org/wiki/Parkinson%27s_law

  • wjc

    “We honestly don’t have a clue about what’s really going on in the U.S. economy. What’s worse, we think we do.”

    This was my biggest takeaway from the piece, and I agree 100%.

    In most offices where widgets aren’t being produced, the mere attempt to measure productivity is fraught with all kinds of problems. Also, the attempts to increase productivity leads to all kinds of negative results.

    If you call to report a problem to a service provider, how often do you feel that the person on the other end of the conversation is trying to short-cut the process to get you to say that the issue is solved? If you are measuring call center workers on number of support tickets closed, tickets are going to get closed, whether they should be or not.

    We wind up measuring things that can be measured whether or not they are the right things to measure.

  • DavidG

    “If that well runs dry — as it nearly has — you’re in trouble. If you
    can’t produce more output in every hour you work, your employer can’t
    afford to give you a raise.”

    For quite a few years now, workers haven’t been sharing in the rewards of increased productivity.

    • jon

      Yeah, and they like to hide (or outright lie) about that….
      I ran the numbers the year they cut our paid time off (and claimed they gave us more because they took 5 days of sick time we used to get and gave us 3 days of PTO, so we had more PTO than before… unless you look at it inclusively, then we lost two days) that was 4% more hours they expected us to work each year… which pretty much took that 2% cost of living increase look like it was absolutely nothing…

      that isn’t even including the increase in health insurance, and the cost of other “benefits” that we were getting…

  • Mike Worcester

    I’m gong to start my comment with a quote from one of Bob’s responses to another commentor — //I’m always intrigued when people equate the trades with being uneducated or less educated.

    You are not the only one.

    I may have a college degree and work in a semi-professional field but my family is cross-sectioned with folks who do all sorts of jobs. They are concrete masons, architects, teachers (retired now), highway engineers, truck drivers, etc. To me, *all* their contributions count towards the betterment of society.

    We should not tolerate an accountant looking down upon a brick layer any more than we should tolerate a mechanic looking down upon a college professor. This idea that some vocations are more important than others, that some vocations deserve scorn or judgemental attitudes is maddening and does nothing to help keep our society cohesive and functioning.

    Whew, I feel better now….thanks for listening 🙂

  • Joe

    In regards to education, the trades, and passions, here is a great article about a program at Dunwoody to help women pursue careers in the trades:

    http://www.startribune.com/welding-hvac-construction-and-more-scholarships-help-minnesota-women-trade-fields/392433971/

  • Khatti

    Forgive me if I’m wrong but wouldn’t fixing this problem involve:

    A near, one-party takeover of the Federal Government–the Dems.

    A massive purge of the politicians in the Democratic party removing all congressional and senatorial candidates who have ever taken money from big business (or small business for that matter).

    I willingness to pass laws that would include stiff, lengthy jail sentences for CEOs, business owners, and corporate boards. The sort of sentences we now hand out to people for drug use.

    The hope that the Supreme Court wouldn’t find any of those laws unconstitutional.

    The willingness to actually throw those CEOs, business owners, and corporate boards, into prisons for fifteen, twenty years at a time.

    Have I missed anything?

    • Fred, Just Fred

      Forgive me if I’m wrong but wouldn’t fixing this problem involve:

      A near, one-party takeover of the Federal Government–the Dems.

      Using the Obamacare method of problem solving, ie; pass it to find what’s in it and hope for the best?

      What crimes with stiff lengthy jail sentences would the Dems concoct that are not available today? How would incarcerating CEO’s business owners, and corporate boards help productivity or unemployment?

      How many Dems do you think would be left standing after your purge?

      • Khatti

        The implication of this piece is that the work environment needs to change. The part of the discussion I never hear is the: “What would be needed to make that change,” and “What are we willing to do–really–to make that change. If there is one thing employers will game shamelessly it’s labor laws–I know of what I speak from personal experience. Fines won’t really change a business’s behavior. Having to share a cell for four or five years with someone who raped and ate their grandparents might prove more motivational.

        To answer your second question, virtually none.

        • Ah, we’ve already reached the Dems v. Repubs stage. That was quicker than usual.

          I think a reading of that Washington Monthly piece will reveal the entire situation to be far more complex than the usual us v. them of political discussion.

          • Fred, Just Fred

            I think that is right.

        • Fred, Just Fred

          The Democrat party is joined at the waist with various labor unions. Do you think unions have the long term viability of business as a priority, or does the near extinction of the auto industry have a lesson for us?

          How have employers gamed labor laws the past 8 years under the vigilant gaze of a Dem president? Why would we believe that any government comprised of new, or purge withstanding Dems would be any different than the old bunch?

          How can a self serving bureaucracy the size of the US government ever be expected to reform itself? Even St. Wellstone came to believe he was too important to lose, and chucked his word out the window.

  • Rob

    The notion that many companies can’t afford to give raises is fatuous. Many times it’s a question of how much profit is enough, or how many more millions of dollars does the CEO get in pay raises from one year to the next, at the expense of the company’s’ rank and file? And there’s hundreds if not thousands of companies sitting on big piles of cash; they could certainly use some of that largesse for pay raises.