Friday, May 5, 2017

U.S. Productivity Falls by Most in a Year; Labor Costs Climb

 U.S. worker productivity declined in the first quarter by the most in a year as growth in the world’s largest economy weakened, a Labor Department report showed Thursday.

The results reflect the first-quarter slowdown in the economy, which grew at the slowest pace in three years while the job market remained solid. The report underscores the challenge of achieving a sustained acceleration in productivity, which has been elusive through most of this expansion. As wages remained weak in recent years, businesses relied on new hires rather than more investment in efficiency-boosting technology, though that trend may change eventually as weak productivity erodes profits.

What are your thoughts about the drastic decline in U.S productivity? Is it concerning? What are some possible solutions to help increase U.S productivity?

Full article here:


  1. I do think it's concerning. Increasing the wages and benefits for the existing workforce is one incentive for them to be more productive. Efficiency boosting technology would certainly increase productivity, but it would likely do this at the cost some workers' jobs.

  2. It's good to read that the job market has remained solid. It would be beneficial for companies/economies to invest in labor-augmenting technology, which could help increase the productivity of workers. I will say though, productivity has been much lower in previous quarters (as shown in the chart), so it would be more helpful to really understand the determinants of these first quarter results for 2017.

  3. I do think it is very concerning. I think efficiency boosting technology is a good agency to increase productivity, but what exactly is efficiency boosting technology? I feel the investment of this technology is like opportunity cost towards actual worker's jobs.

  4. I think that all technological improvements are accompanied by loss of jobs. It's just the price that has to be paid. However, I think that it doesn't have to affect as many people as it usually does if we take steps to prepare people before we implement new technologies. Because technology is very necessary to improve productivity. It's all about finding the balance and not focusing too much on either side of the debate between improved productivity and job loss.