6 ms·

> amount of labor being generated per person has not really changed not true, labor productivity has been steadily increasing: https://fred.stlouisfed.org/seri

by rsalus 3mo ago

> amount of labor being generated per person has not really changed not true, labor productivity has been steadily increasing: https://fred.stlouisfed.org/series/OPHNFB https://fred.stlouisfed.org/series/OPHNFB workers are simply capturing less of the economic value generated by their labor.

bko 3mo ago
Chart goes up, but you really need to look at percent change. Over the last 25 years it's averaged about 2% observation_date OPHNFB_PC1 2000-01-01 2.99256 2001-01-01 2.58092 2002-01-01 4.27146 2003-01-01 3.68422 2004-01-01 2.97991 2005-01-01 2.18582 2006-01-01 0.99665 2007-01-01 1.58927 2008-01-01 1.30737 2009-01-01 4.07061 2010-01-01 3.15513 2011-01-01 -0.02491 2012-01-01 0.93870 2013-01-01 0.59941 2014-01-01 1.00795 2015-01-01 1.27023 2016-01-01 0.61567 2017-01-01 1.49513 2018-01-01 1.40965 2019-01-01 2.13337 2020-01-01 5.30657 2021-01-01 2.06281 2022-01-01 -1.46786 2023-01-01 2.13277 2024-01-01 2.91010 2025-01-01 2.25154
- rsalus 3mo ago
  2% is average. 1-1.5% is considered a slump, while anything over 2.5% is considered a boom. for instance, the post-ww2 boom (1947-1972) averaged 2.9%. at that rate of growth, a country's total output per worker doubles in roughly ~25 years.
- ijidak 3mo ago
  Is this inflation adjusted?
zer00eyz 3mo ago
The chart you're showing, absolutely reflects the reality of some of the most productive segments of our economy. Ford now makes more cars, with fewer people. Sears used to have people who took photos, laid out catalogs, opened envelopes (with checks in them).... Amazon has none of that. We replaced switch board operators, with mechanical, then digital switching. More calls routed, fewer people required. go back 45 years and "draftsmen" was a job - replaced by auto cad. All these industries have seen massive productivity. Are the people flipping burgers more productive? Plumbers? Welders? Teachers? Nurses? -- to some extent yes, because of technology but not to the same extent as the previous businesses. Anything that qualifies as "service economy" work has not seen the same gains as Ford (see: https://www.aei.org/carpe-diem/phenomenal-gains-in-manufacturing-productivity-2/ https://www.aei.org/carpe-diem/phenomenal-gains-in-manufactu... )
- boelboel 3mo ago
  Construction notably has had productivity losses since the 80s afaik.
  - zer00eyz 3mo ago
    Good call out, and an interesting case I was unaware of. It looks like this is another facet of the "bitter medicine" that we're seeing around housing in general. The first article that I saw pointed out that there is a correlation between productivity and regulation (of construction permitting etc). I would believe that because it has a corollary with "housing starts" (a measure of new construction) and its regional strength in the red/south portion of the country.
- PaulDavisThe1st 3mo ago
  One cause for lack of productivity gains is Baumol's cost disease, which generally affects organizations involving N different people (for N>1) where for one or more reasons N cannot be meaningfully reduced, if at all. Orchestras are the canonical example. There's a variant of this, however, in activities that are done essentially by 1 person (as is true for most of the examples you mention in your last paragraph). You can improve their individual productivity - more pipes fixed, more joints welded, more patients well-attended to (*) - but in the end you cannot get rid of the individual doing the work in the way automated manufacturing has. (*) even with a nurse though, this starts to break down for activities where time is a critical part of whatever is being done. Sometimes caring well for a person is primarily a matter of spending time with them, and this is certainly true for teaching as well. In such cases, you cannot make the person "more productive" no matter what technologies you might provide them with.
legitster 3mo ago
Fair, but the year over year growth of labor productivity has been really consistent, as has consumer prices: https://fred.stlouisfed.org/graph/?g=tjto https://fred.stlouisfed.org/graph/?g=tjto So in terms of how much consumers are making in relation to their expenses, it's been remarkably steady this whole time.
- rsalus 3mo ago
  yes, but wage growth has not tracked productivity: https://fred.stlouisfed.org/graph/?g=1X020 https://fred.stlouisfed.org/graph/?g=1X020 household expenses have been increasing without commensurate wage growth, resulting in lower savings: https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT
ijidak 3mo ago
Is this inflation adjusted?
missedthecue 3mo ago
Increases in labor productivity is a curious thing to think about. Do I deserve more wages for using AutoCad instead of drafting paper? - The amount I'm working hasn't increased. Still an 8 hour day. - My job honestly is easier than it used to be; certainly less menial. - Strictly speaking, the education requirement is actually lower. It's easier and a lower bar to learn to become a decent designer in AutoCad than to learn to effectively use old drafting tools (even though the formal four year engineering degree still takes four years). But it's also true that in spite of this, my output is higher. Should I capture the increased output or should the innovators of the tools? What about the firms that invest in procuring these tools and production technology? Should the customers capture the increased output through lower prices? Or should the innovators, firms, and customers all get less, and instead my wages should get bigger?
- jacobolus 3mo ago
  In practice what happens is that on average the tool-user's wages go up slightly but most of the jobs in the field are eliminated, and the resulting large profit mostly goes to managers and financiers.
- smallmancontrov 3mo ago
  r>0 is not the problem, r>g is the problem, and that one's a lot less morally ambiguous.
- limagnolia 3mo ago
  And many laborers have retirement accounts and pension funds that are also capital owners, so they benefit from increases in capital too.
  - FatherOfCurses 3mo ago
    Assuming you don't retire during one of the periodic market bust cycles. I think a lot of workers would rather see more return on that increase in capital now.
- 3D30497420 3mo ago

by rsalus 3mo ago

bko 3mo ago

Chart goes up, but you really need to look at percent change. Over the last 25 years it's averaged about 2% observation_date OPHNFB_PC1 2000-01-01 2.99256 2001-01-01 2.58092 2002-01-01 4.27146 2003-01-01 3.68422 2004-01-01 2.97991 2005-01-01 2.18582 2006-01-01 0.99665 2007-01-01 1.58927 2008-01-01 1.30737 2009-01-01 4.07061 2010-01-01 3.15513 2011-01-01 -0.02491 2012-01-01 0.93870 2013-01-01 0.59941 2014-01-01 1.00795 2015-01-01 1.27023 2016-01-01 0.61567 2017-01-01 1.49513 2018-01-01 1.40965 2019-01-01 2.13337 2020-01-01 5.30657 2021-01-01 2.06281 2022-01-01 -1.46786 2023-01-01 2.13277 2024-01-01 2.91010 2025-01-01 2.25154

rsalus 3mo ago
2% is average. 1-1.5% is considered a slump, while anything over 2.5% is considered a boom. for instance, the post-ww2 boom (1947-1972) averaged 2.9%. at that rate of growth, a country's total output per worker doubles in roughly ~25 years.
ijidak 3mo ago
Is this inflation adjusted?

zer00eyz 3mo ago

The chart you're showing, absolutely reflects the reality of some of the most productive segments of our economy. Ford now makes more cars, with fewer people. Sears used to have people who took photos, laid out catalogs, opened envelopes (with checks in them).... Amazon has none of that. We replaced switch board operators, with mechanical, then digital switching. More calls routed, fewer people required. go back 45 years and "draftsmen" was a job - replaced by auto cad. All these industries have seen massive productivity. Are the people flipping burgers more productive? Plumbers? Welders? Teachers? Nurses? -- to some extent yes, because of technology but not to the same extent as the previous businesses. Anything that qualifies as "service economy" work has not seen the same gains as Ford (see: https://www.aei.org/carpe-diem/phenomenal-gains-in-manufacturing-productivity-2/ https://www.aei.org/carpe-diem/phenomenal-gains-in-manufactu... )

boelboel 3mo ago
Construction notably has had productivity losses since the 80s afaik.
- zer00eyz 3mo ago
  Good call out, and an interesting case I was unaware of. It looks like this is another facet of the "bitter medicine" that we're seeing around housing in general. The first article that I saw pointed out that there is a correlation between productivity and regulation (of construction permitting etc). I would believe that because it has a corollary with "housing starts" (a measure of new construction) and its regional strength in the red/south portion of the country.
PaulDavisThe1st 3mo ago
One cause for lack of productivity gains is Baumol's cost disease, which generally affects organizations involving N different people (for N>1) where for one or more reasons N cannot be meaningfully reduced, if at all. Orchestras are the canonical example. There's a variant of this, however, in activities that are done essentially by 1 person (as is true for most of the examples you mention in your last paragraph). You can improve their individual productivity - more pipes fixed, more joints welded, more patients well-attended to (*) - but in the end you cannot get rid of the individual doing the work in the way automated manufacturing has. (*) even with a nurse though, this starts to break down for activities where time is a critical part of whatever is being done. Sometimes caring well for a person is primarily a matter of spending time with them, and this is certainly true for teaching as well. In such cases, you cannot make the person "more productive" no matter what technologies you might provide them with.

legitster 3mo ago

Fair, but the year over year growth of labor productivity has been really consistent, as has consumer prices: https://fred.stlouisfed.org/graph/?g=tjto https://fred.stlouisfed.org/graph/?g=tjto So in terms of how much consumers are making in relation to their expenses, it's been remarkably steady this whole time.

rsalus 3mo ago
yes, but wage growth has not tracked productivity: https://fred.stlouisfed.org/graph/?g=1X020 https://fred.stlouisfed.org/graph/?g=1X020 household expenses have been increasing without commensurate wage growth, resulting in lower savings: https://fred.stlouisfed.org/series/PSAVERT https://fred.stlouisfed.org/series/PSAVERT

ijidak 3mo ago

Is this inflation adjusted?

missedthecue 3mo ago

Increases in labor productivity is a curious thing to think about. Do I deserve more wages for using AutoCad instead of drafting paper? - The amount I'm working hasn't increased. Still an 8 hour day. - My job honestly is easier than it used to be; certainly less menial. - Strictly speaking, the education requirement is actually lower. It's easier and a lower bar to learn to become a decent designer in AutoCad than to learn to effectively use old drafting tools (even though the formal four year engineering degree still takes four years). But it's also true that in spite of this, my output is higher. Should I capture the increased output or should the innovators of the tools? What about the firms that invest in procuring these tools and production technology? Should the customers capture the increased output through lower prices? Or should the innovators, firms, and customers all get less, and instead my wages should get bigger?

jacobolus 3mo ago
In practice what happens is that on average the tool-user's wages go up slightly but most of the jobs in the field are eliminated, and the resulting large profit mostly goes to managers and financiers.
smallmancontrov 3mo ago
r>0 is not the problem, r>g is the problem, and that one's a lot less morally ambiguous.
limagnolia 3mo ago
And many laborers have retirement accounts and pension funds that are also capital owners, so they benefit from increases in capital too.
- FatherOfCurses 3mo ago
  Assuming you don't retire during one of the periodic market bust cycles. I think a lot of workers would rather see more return on that increase in capital now.
3D30497420 3mo ago