How to squeeze workers to the last drop

Worker productivity jumped 9.5 percent in the third quarter of 2009. The good news? Hard to go higher


Andrew Leonard
November 5, 2009 8:14PM (UTC)

The productivity of U.S. workers, reported the Bureau of Labor Statistics, on Thursday, grew a huge 9.5 percent in the third quarter of 2009.

The figures are stark: Output increased 4.0 percent and hours worked decreased 5.0 percent. Overall, "unit labor costs in nonfarm businesses fell 5.2 percent." The BLS defines that last stat by saying "the increase in productivity outpaced the increase in hourly compensation." What that seems to mean in plain English is that those of us who have jobs are working harder for less pay.

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Or maybe we're just taking better advantage of the technology that we have available to us. Maybe we're not really working harder, but better, more efficiently. The BLS doesn't go quite into that level of detail.

By and large, steady increases in worker productivity are a sign of a healthy economy, but this big a jump is yet another indicator of what a huge shock to the system the U.S. economy has just experienced. The question remains: If the productivity of each still-employed worker has grown so much, what are the prospects for laid-off workers ever finding new jobs?

And here, one economist, quoted by Bloomberg, offers a slight ray of hope.

"Business are being extraordinarily cautious on costs," said Dean Maki, chief U.S. economist at Barclay's Capital in New York. "Employment will have to go up before long."

In other words, so much fat has been trimmed off the bone that there's nothing left to trim.

Do we a see sign of that in today's weekly jobless claim numbers, which fell 20,000 from last week, reaching their lowest point this year since Jan. 3? This week has been chock-full of mildly encouraging economic indicators, but there's also a better than even chance that the overall unemployment rate hits ten percent or higher tomorrow. How much encouragement should we take from the fact that employers have squeezed so much productivity out of workers that it defies expectations that there is any more juice left to wring?


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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How The World Works Unemployment U.s. Economy

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