FOR A PURITAN NATION IT'S A BRUTAL REALIZATION...:

The Greater Recession: America Suffers from a Crisis of Productivity (Derek Thompson, Sep 7 2011, Atlantic)

Americans have a complicated relationship with productivity. We obsess about our personal efficiency, but we don't think much about efficiency across broad swaths of the economy. Productivity is the not-so-secret sauce in our GDP. We're the second-largest manufacturer in the world even though manufacturing jobs have shrunk to less than 10 percent of our economy. We're the world's third-largest agricultural nation even though only 2 percent of us farm. The reason we can do so much work with so little is that the U.S. economy is incredibly, and increasingly, efficient at making some things cheaply.

Don't ask David Allen to explain this. Ask David Autor. He's the MIT economist who, in last month's cover story, "Can the Middle Class Be Saved?", told Don Peck that technology and offshoring is replacing jobs for the middle-educated middle-class. "Almost one of every 12 white-collar jobs in sales, administrative support, and nonmanagerial office work vanished in the first two years of the recession," Peck writes, and one in six blue-collar jobs disappeared in production, craft, repair, and machine operation.

We know where the jobs are going -- to machines, software, and foreign workers. We also know why they're going away. Global competition gives companies the incentive to be more productive, and technology and foreign labor gives companies the means to be more productive. Automation lets one employee handle the work of three, or three hundred. Off-shoring lets ten Asian workers receive the salary of one. [...]

Poverty is overrated. That was the unmistakable conclusion of a report from the Heritage Foundation released this July.

Most of the 30 million Americans in families making under $21,000 "are not poor in any ordinary sense of the term," the conservative think tank claimed, because they have widespread access to air conditioning, television, and a car. "They are well housed, have an adequate and reasonably steady supply of food, and have met their other basic needs, including medical care," the authors wrote.

Critics savaged the survey by pointing out that many families in poverty rent apartments where fridges and air conditioning units come automatically. But the study made an important point: The ubiquity and affordability of consumer technology is an astounding testimony to productivity in the electronics sector.

In fact, eating and clothing ourselves is getting easier all the time. Before the Great Depression, about 35% of family expenditures went to food and threads. Today, we spend only 10% of our income on food and 3% of our income on clothes. Again, this is an achievement of manufacturing and farming efficiency.

It doesn't end there. Behind the most important technology stories of our time, there is a clear theme: The triumph of software. Consider the rise of Netflix over Blockbuster, music sharing over albums, Flickr over Kodak, Amazon over Borders, wireless Verizon over wired Verizon, webpages over printed pages. Everything getting cheaper feels the touch of innovation -- especially online innovation, IT, and computer software.

...that we'd be more productive if fewer of us had jobs. Most of the bloat is in the managerial class and only our first real recession in thirty years could force minimal cuts in these boondoggles. You'd have to make that one in 12 into about 7 in 12 before you started getting past fat to sinew.

Posted by oj at September 10, 2011 8:21 AM
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