From an article in the June issue of Kiplinger's Personal Finance:
From 1947 through 2005, the average growth of labor productivity in the U.S. was 2.4% per year. But since 2005, average annual productivity growth has slowed to 1.4%. Last year it fell to zero, despite the fact that productivity growth usually accelerates during economic expansions. And the trend is worsening despite the collapse in energy prices, which would be expected to boost productivity rather than hamper it. In fact, productivity growth in the fourth quarter of 2014 fell by 2.2%. If early forecasts for the first quarter of 2015 prove accurate, productivity growth will once again be negative. If that’s the case, it will be the first time since 1993 that the economy has experienced two consecutive quarters of falling productivity.
Some economists, such as Robert Gordon, of Northwestern University, believe that the drop in productivity is a result of a permanent decline in the number of life-transforming inventions, which were the hallmark of the 20th century. Indeed, capital spending on technology has lagged in recent years as firms have found fewer capital investments that improve the bottom line.
I thought this was interesting because the article says that increased productivity is essential for job creation and wage growth. NJ argues that technology kills jobs but investment in new technology is actually down.
From 1947 through 2005, the average growth of labor productivity in the U.S. was 2.4% per year. But since 2005, average annual productivity growth has slowed to 1.4%. Last year it fell to zero, despite the fact that productivity growth usually accelerates during economic expansions. And the trend is worsening despite the collapse in energy prices, which would be expected to boost productivity rather than hamper it. In fact, productivity growth in the fourth quarter of 2014 fell by 2.2%. If early forecasts for the first quarter of 2015 prove accurate, productivity growth will once again be negative. If that’s the case, it will be the first time since 1993 that the economy has experienced two consecutive quarters of falling productivity.
Some economists, such as Robert Gordon, of Northwestern University, believe that the drop in productivity is a result of a permanent decline in the number of life-transforming inventions, which were the hallmark of the 20th century. Indeed, capital spending on technology has lagged in recent years as firms have found fewer capital investments that improve the bottom line.
I thought this was interesting because the article says that increased productivity is essential for job creation and wage growth. NJ argues that technology kills jobs but investment in new technology is actually down.
