Thursday, November 5, 2009

Who Needs Workers Anyhow?

Marketwatch reports:

U.S. companies increased their output in the third quarter even as they slashed working hours, driving productivity up at a 9.5% annual rate in the quarter, the Labor Department estimated Thursday.

Unit labor costs - a key measure of inflation - dropped at a 5.2% annual rate in the quarter. Productivity is output divided by hours worked. Output rose 4% annualized, while hours worked plunged 5%. Real hourly compensation increased at a 0.2% annual rate.

With productivity high and real compensation low, companies captured the lion's share of the benefits of higher productivity in the form of profits. Inflationary pressures remained very low.

The huge increase in productivity explains why the U.S. economy could grow at a 3.5% annual rate in the third quarter even as jobs were being lost at a rapid pace.

Obviously at some point we'll need to get everyone back in the labor force to support end user demand . That is unless we create a welfare state in which the working class supports the non-working class... or is that what we already have?

Source: BLS


  1. Now THAT is a graph that deserves widespread distribution. Good news for the bottom line. Not quite as rosy a picture if you happen to be a working stiff - that is, somebody who is being forced to work those fewer hours, or who has no hours of work at all.

  2. Working people pay for non-working, yes that's what we have... socialism... we are heading for U.S.S.A...

  3. That is no socialism at all. In Soviet-style Socialism everybody has to work, no matter how unproductive or menial the task, because it looks bad to have people sitting on their hands. The Central Party and their friends happen enjoy the lion's share of economic output.

    Compare it to fascism, where everybody has to be productive to the benefit of the corporate elite (public or private... can you tell the difference anymore?). The ones that cannot keep the pace are left behind to fall prey of hunger and disease. If so many lumpen are left behind, that's what the gas chambers are for.