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Stories tagged with “productivity”

Economy

Workers Have Seen Little Benefit From Productivity Gains Since 1979

By Pat Garofalo on Jan 31, 2013 at 11:50 am

Flickr photo by Saad Akhtar

Wages last year plummeted to an all-time low as a percentage of the economy, even as corporate profits rocketed to new highs. This means that corporations have been able to squeeze more and more productivity out of workers, without rewarding them for their efforts.

According to a new report from the Economic Policy Institute, this phenomenon has been a long time coming. In fact, workers have seen precious little gain from increased hours and productivity since 1979:

Workers have been offering more to the economy and the labor market, and what they have received in return — particularly in the form of real hourly wages — has been very disappointing. This trend is particularly evident when considering that the majority of workers — especially those in the bottom 60 percent of the wage distribution — increased their work hours substantially between 1979 and 2007, the last year before the current recession. However, during this period (excluding a brief interlude of strong economic growth between 1995 and 2000), real (i.e., inflation-adjusted) hourly wages of the bottom 60 percent grew modestly — ranging from an actual decline for the bottom fifth to annual growth of about 0.25 percent for the middle fifth. This growth is far less than the increase in economy-wide productivity over that time.

As EPI noted, “In contrast, those at the top fared much better: The stock market grew strongly, CEO compensation grew twice as fast as the stock market, [and] wealth grew for the top 1.0 percent.” In the still-fragile economic recovery, the bottom 90 percent of workers have seen their wages fall, while “the top 1.0 percent of wage earners are likely to quickly recoup all of the ground lost in the downturn.”

Health

STUDY: Higher Health Care Costs May Decrease Worker Productivity

By Sy Mukherjee on Oct 10, 2012 at 4:40 pm

Over the last decade, employers have steadily been shifting the cost of health care coverage onto their employees relative to medical inflation and stagnating wages. This asymmetric cost-sharing is meant to stem the rising tide of health costs paid for by employers by encouraging workers to be more efficient and frugal with their health spending. But a new working paper from the National Bureau of Economic Research suggests that when it comes to medically-needy employees, these health “savings” may actually come at a greater cost.

As Sarah Kliff explains, the study finds that while employers might see immediate savings on their balance sheets by shifting costs onto their workers, the strategy could be a losing one in the aggregate, encouraging sick employees to forego increasingly expensive care and consequently resort to absenteeism:

On average, employees with chronic pain had 76.7 hours absent from work. But with every $5 increase in cost-sharing for pain medications, they saw an increase in absenteeism somewhere in the ballpark of 1.3 to 3.1 percent.

That may seem small, but as the researchers explain, the consequences could be quite large, enough to offset any savings the higher co-payments generate for that employee:

If we assume that a $5 increase in cost-sharing (20%) is associated with a 1 hour increase in absence (~1.3%) this would be valued at $42/hour fully loaded with fringe benefits (workers in private industry, large establishments) (BLS 2012). Alternatively, the average hourly earnings for Americans overall is about $31 loaded.

The $31-$42/hr in absence-related costs would offset any employer savings associated with raising copayments.

This is yet another clear-cut signal for the need for widespread, affordable health coverage. If Obamacare’s cost control measures — such as “medical loss ratios” and federal subsidies to encourage individuals and employers to obtain and offer health insurance — can successfully bend the health care cost curve and make coverage more affordable, companies may see benefits for both their employees’ well-being as well as their own bottom lines.

Alyssa

The Rise Of Coffee — And Personal Productivity

By Alyssa Rosenberg on Oct 28, 2011 at 9:51 am

In my quest to read all of David Liss’s novels, I finally finished The Coffee Trader, a companion novel of sorts or prequel to his Benjamin Weaver novels that explain how Benjamin’s uncle, Miguel Lienzo, became the man of consequence he is. Like all of Liss’ novels, it’s a useful explanation of some part of the financial system — in this case, commodity markets — and why it should be regulated in general (though not in this case, because that would prevent our hero from triumphing over an unworthy enemy). But it’s also a great meditation on the rise of personal productivity.

After drinking coffee for the first time, Miguel reflects:

How many times, after conducting business in taverns, had Miguel’s wits suffered with each tankard of beer? How many times had he wished he had the concentration for another hour’s clarity with the week’s pricing sheets?…The coffee’s scent began to make him light-headed with something like desire. No, not desire. Greed. Geertruid had stumbled upon something, and Miguel felt her infectious eagerness swelling in his chest. It was like panic or jubilance or something else, but he wanted to leap from his seat.

Similarly, coffee for Hannah unleashes a sense of potential, the idea that she should be able to learn more about Jewish law, that she should be able to read. The berries and the drink give both of them the sense that they’re not bounded by fate and the limitations of the body; that they can, if not entirely conquer tiredness, push it back for a time; that they can reach for greater clarity than that normally available to them. Their success in personal and private life is incumbent on them, not on God’s favor, and if they are clever enough, not the approval of their community or their adherence to artificially imposed norms.

As we know from discussions of the current recession, productivity is not a cure-all if we don’t have the resources to consume. If the workforce as a whole is much more productive, tapping into your full productivity doesn’t actually give you the sort of advantage that Miguel Lienzo got from drinking coffee (and, of course, from working as an independent operator rather than for a firm). So there’s something sort of wistful about a look back to a time when the new standards seemed full of nigh-magical promise and opportunity.

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