Mar
04

Productivity Problem

ProductivityProblem While 3.2 million new jobs were created in 2014 making it a great year for job creation, GDP grew by a very pedestrian 2.4%. This suggests that labor productivity is either growing very slowly, or worse, may be declining. Either way, it means when labor force slack disappears inflation pressures may quickly build, absent Fed intervention. Moreover, living standards are likely to rise very slowly unless this trend reverses.

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Comments

  1. OK, I got the point, but tell me this. If majority of jobs are already enhanced or even replaced by technology and most of it, like any technology, changing daily, how do you expect companies to maintain employee productivity when they continuously have to re-train employees to use “new and improved” technology? Also, when production is tweaked to maximum efficiency using technology, where is the added productivity should come from?

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