Productivity gains may be bad news for job seekers

[question everything]

Source: AP

Companies across the economy are finding ways to do more with fewer workers, dimming hopes that hiring will take off anytime soon. Employers became leaner and more efficient in the third quarter. Wages, meantime, remain flat or falling. The result is that productivity -- output per hour of work -- jumped at the fastest pace in six years.

The good news for companies, though, may be bad news for the jobless. As long as companies can get their workers to produce more, they have little reason to hire -- at least until consumer spending picks up. And the squeeze on incomes could depress consumer spending, putting the economic recovery at risk. Still, some economists were encouraged by the productivity report. They say that eventually, employers won't be able to squeeze more from their staffs. They will then have to ramp up hiring -- something that could happen next year, even though the jobless rate is expected to hit double digits.

Productivity rose at an annual rate of 9.5 percent in the July-September quarter, the Labor Department said Thursday. That was much better than the 6.4 percent gain economists had expected. Unit labor costs fell at a 5.2 percent rate. While companies aren't doing much hiring, they're not cutting as many workers, either. The number of newly laid-off workers filing claims for unemployment benefits last week fell to the lowest level in 10 months. On Wall Street, the better-than-expected jobless claims report and an upbeat forecast from Cisco Systems Inc. buoyed investors. The Dow Jones industrial average added nearly 204 points to 10,005.96, and broader indexes also gained.

(snip)

Productivity is the key ingredient to rising living standards. It lets companies pay their workers higher wages. Those increases tend to be financed by increased output, rather than higher costs for products. But as they struggled with the recession, companies boosted productivity while continuing to lay off workers. Many produced more goods; others kept their output down but slashed costs. Companies kept wages down by freezing pay or imposing unpaid furloughs.




Read more: http://finance.yahoo.com/news/Productivity-gains-may-be-bad-apf-1644758630.html?x=0&sec=topStories&pos=5&asset=&ccode=

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So the Dow Jones goes up 200 in one day while employers work employees to death.

And no one dares complaining, knowing that most can be quickly replaced

:mad:

[spinbaby]

1. Well, I'm working harder

But I haven't encountered those higher wages.

[Cant trust em]

2. I think this article is a little dumb. It's not exactly counter-intuitive.

Companies lay people off, but the same work still needs to be done. It just happened at my office and I got stuck picking up the slack.

Here's something interesting though.

"They say that eventually, employers won't be able to squeeze more from their staffs. They will then have to ramp up hiring -- something that could happen next year, even though the jobless rate is expected to hit double digits."

[harkadog]

8. That quote contains a huge assumption

It assumes the companies will need to increase production. If there is not demand for increased production or work product then there is no need for hiring.

[Ruby the Liberal]

3. My former co-workers took a 20% pay cut while

picking up the slack left behind by those laid off.

Businesses are cutting off their nose to spite their face. Yes, they can pay $9/hour while requiring 5-10 years "relevant experience" and a Bachelors Degree today. Good luck with that when the economy turns and all of these folks jump ship.

[Enrique]

4. this is where unions come in

unions put limits on how much the company can squeeze the workers.

[zbdent]

5. Whenever I hear that "worker productivity" has gone up, I think of how

Repugs/Conservatives seem to think of getting the "productivity" up of the workers ...

I think that they would have the idea that productivity would go up (per worker) in a fast-food joint if they laid off half the workforce between the hours of 11am and 1pm ...

[treestar]

6. that's always been the case, and that's why we got labor laws

So with those laws in place, this pressure is reduced. The $$ they company saves can go into something else, too. Making new products.

The media is just always working to make you believe you are at a disadvantage in the job market, vs. the employer, so you'll be so grateful to have a job you won't demand more pay or anything like that.

Only the lowest level can be quickly replaced. Mere manual labor. That depends on the industry and the job position.

[endless october]

7. good luck finding people to buy your shit.

productivity can go up 100 percent, and if the same few workers are still making the same shitty pay, discretionary income won't exist to facilitate increase in sales.

an unemployed consumer base is bad for business.

[xchrom]

9. i'm following this thread -- and i want to point out the obvious --

not all -- or maybe even most of these companies actually make something.

because i come from the bay area i think of service companies of all sorts, high tech, genetics labs, etc

[question everything]

15. Right. And having blackberries so that each employee is "on call"

"24/7" (how I hate this term) is one way to "increase" productivity.

Is there any employee who would dare turning off his cell phone or blackberry, or whatever in the evening, for example, because he wants to have a quiet evening with his family? Or watch a silly program on TV?

And at some point, there will be that straw that will break the camel's back.

Unfortunately, there are too many hungry people who would be willing to fill the spot.

[Renew Deal]

10. Yes!!!! Us workers are kicking ass!!!!

:silly:

[Indenturedebtor]

11. Yep and you can forget raises and bonuses

They squeeze and squeeze and squeeze until there is nothing left to squeeze and then they toss you aside.

[dysfunctional press]

12. "It lets companies pay their workers higher wages..."

maybe someone should tell that to the companies.

[my future me]

13. Efficiency . .

is the goal and bane of every society

[The2ndWheel]

19. Live and die by it. We don't get to pick and choose

[high density]

14. Eh? I put in the effort to work slower

My wages are stagnant no matter how much effort I put into the job. No sense in going above and beyond for corporate America because the only people who consistently benefit are about 4-5 levels above me on the foodchain.

[moonbatmax]

16. Wow! You're really up there!

I mean, just 4-5 levels below?

[moonbatmax]

17. Oh, nice! I see this is getting unrec'd.

Well, I just did my part to counter that, for what it's worth.
Meanwhile, I wrote a little something on this a few months back,
all about reduced labor costs and increased productivity.
That's economist for, "Everything's good when the workers get screwed."

What a wonderful system, huh?

[question everything]

20. Excellent commentary, sorry I missed it

we were having a crisis on our own when my spouse changed from being a salaried employee to a consultant. Certainly cheaper for the employer as we pay for COBRA and the full employment taxes..

Oh, and thanks for the R. I suspect that, as always, the Us are anonymous...

:hi:

[liberal N proud]

18. Companies will not hire until consumers spend money,

Consumers will not spend money until companies hire.

This situation will get us and the economy nowhere.

[question everything]

21. This is the only good thing that I can say about Henry Ford

He chose to pay his employees enough so that they could purchase the products they were making.

How many employers still do this, or even think along these lines?

[Thothmes]

22. He also worked his assembly line

employees eight hours a day without any breaks or lunch time. Need to go to the bathroom, line super has to take your spot on the line. A Ford cop is in the restroom to make sure that you do not spend too much time answering the all of nature. Stop the line for any reason and you are fired on the spot. All for eight dollars a day.