What’s the mystery surrounding current economic productivity numbers? NC State University economist Mike Walden explains.
“I really think productivity may be the sleeper number that we don’t pay enough attention to, especially in the broad media. Productivity simply measures how much workers produce in a given period of time — how productive are they, or how efficient they are.
“The problem we are seeing right now in productivity is that it’s still going up but going up at a very, very slow pace — in fact, about half the rate that it did a decade ago.
“And that is really a mystery to economists. Typically what we see after recessions is a surge in productivity. We haven’t seen that this time.
“Now, a couple potential reasons: Some economists say it’s mismeasurement: We are not able to accurately measure productivity, especially when there are a lot of changes going on in the workforce with new technology, etc.
“Other economists say, ‘You know what? It’s actually the new technology that is hurting productivity.’ And they are saying that because they are arguing that a lot of workers now are using the new technology to play during work: They are playing games, they are on the Internet, etc., and this is actually taking away from their productivity.
“One final explanation could be the influx of new workers. We are seeing a massive shift in our workforce right now (with) baby boomers retiring and millennials coming in and taking their place. Traditionally when you have a large number of new workers coming into the work force productivity goes down until they learn the ropes.”