Productivity Growth in the US Continues to Decline(geopoliticalfutures.com)
geopoliticalfutures.com
Productivity Growth in the US Continues to Decline
https://geopoliticalfutures.com/productivity-in-the-us-continues-to-decline/
67 comments
Meetings, meetings, more meetings and meetings about meetings, meetings about making meetings productive, etc. We need fewer of them and the ones we do have should have a point (i.e. decisive)
They shouldn't by default be thinking out loud brainstorming sessions to be investigated and possibly executed later some day after it's trickled through proper approval requiring additional meetings.
They shouldn't by default be thinking out loud brainstorming sessions to be investigated and possibly executed later some day after it's trickled through proper approval requiring additional meetings.
Excellent point. Let's schedule a meeting to discuss this further.
Here's what I don't get about this though, was there less meetings back in the early 2000s? I'm only 24 so I don't know, but if there is one thing I feel has been passed down from seniors as a software developer it is that in the early 2000s managers loved holding meetings.
You're right, there have been companies plagued by meetings for a long time. The difference is the kind of work we do. Now it's mostly "knowledge work" and service work. Parkinson's law--work expands so as to fill the time available for its completion--is probably the culprit these days. As long as people can complete their jobs before the deadlines, they will also tend their virtual farms and talk about nothing with their coworkers at the virtual water cooler on Slack. It's no longer cool for employers to tell their workers to get back to work and stop talking and playing games.
Productivity measures how much money economy produce per hour of work. It depends mostly on type of industries and such and little on how persobally productive white collar worker is.
The graphs you linked clearly show that the growth is declining.
"Productivity growth is declining" doesn't mean "productivity is declining"
The red line here is going upwards and to the right, but its slope is decreasing:
https://imgur.com/a/M2T7C
"Productivity growth is declining" doesn't mean "productivity is declining"
The red line here is going upwards and to the right, but its slope is decreasing:
https://imgur.com/a/M2T7C
The article title (not the HN title) is "Productivity in the US Continues to Decline" which one could interpret as "productivity is declining" because that's what it says.
But you're right and they should've been more clear about it in the article. Thanks for the proper HN title.
But you're right and they should've been more clear about it in the article. Thanks for the proper HN title.
People will generally be interested in "real productivity", which subtracts inflation. That will make that graph distinctly negative.
I'm not disagreeing but I'm adding the context.
The article is dated May 5, 2016. There was apparently a -1.0% drop in productivity according to the May 4, 2016 BLS news release, but it doesn't seem to be the worst quarter since 1993. In fact, the same article revised the previous quarter's productivity down from a number that was already lower than the May 5 number, so the author seems to be BSing. The BLS timeseries for nonfarm business appears to show 2008Q1 as the worst quarter-to-quarter drop in the span from 1991 to 2017. The worst quarter drop since 1947Q2, was -11.3% in 1947Q3 which was followed by a 17.9% increase in 1947Q4. The data are pretty noisy.
Most of the charts in the BLS articles you mention do show productivity growth in 2009-2017 lagging far behind the trendlines for previous business cycles. The BLS articles are good for putting productivity on an index which I think makes a better comparison than looking at a rise or drop from quarter to quarter. I have read a number of economists who are concerned about the drop in productivity growth, although there hasn't been a persistent drop in total productivity.
The article is dated May 5, 2016. There was apparently a -1.0% drop in productivity according to the May 4, 2016 BLS news release, but it doesn't seem to be the worst quarter since 1993. In fact, the same article revised the previous quarter's productivity down from a number that was already lower than the May 5 number, so the author seems to be BSing. The BLS timeseries for nonfarm business appears to show 2008Q1 as the worst quarter-to-quarter drop in the span from 1991 to 2017. The worst quarter drop since 1947Q2, was -11.3% in 1947Q3 which was followed by a 17.9% increase in 1947Q4. The data are pretty noisy.
Most of the charts in the BLS articles you mention do show productivity growth in 2009-2017 lagging far behind the trendlines for previous business cycles. The BLS articles are good for putting productivity on an index which I think makes a better comparison than looking at a rise or drop from quarter to quarter. I have read a number of economists who are concerned about the drop in productivity growth, although there hasn't been a persistent drop in total productivity.
Here's the raw data on productivity growth visualized in FRED:
https://fred.stlouisfed.org/series/MPU4910063
The author missed the small peak in productivity around the recession but the main premise of the article stands - productivity growth has hit a wall in recent years.
https://fred.stlouisfed.org/series/MPU4910063
The author missed the small peak in productivity around the recession but the main premise of the article stands - productivity growth has hit a wall in recent years.
No it doesn't stand, and your link doesn't back up the article.
Your chart shows an increase every single year. Not one data point on that chart shows a decline.
Your chart shows an increase every single year. Not one data point on that chart shows a decline.
The rate of growth is declining and near zero.
The author is sloppy with his terms but I never claimed that aggregate productivity is decreasing, just growth rate
The author is sloppy with his terms but I never claimed that aggregate productivity is decreasing, just growth rate
Protip: get your stats from FRED:
https://fred.stlouisfed.org/series/MPU4910063
He probably means the rate of increase is falling? Or he doesn't care and just wants to complain about these kids with their damn eye-phones...
He probably means the rate of increase is falling? Or he doesn't care and just wants to complain about these kids with their damn eye-phones...
Ok, we'll add a question mark to the title above unless/until someone finds a clear answer to this.
The author of the article confuses productivity with productivity growth (the rate of change in productivity). While productivity growth has generally declined in recent years, the rate of change has been positive. Consequently, productivity itself has continued to increase (albeit at a declining rate).
Another comment provided a link to the St. Louis Fed’s chart of productivity growth, which illustrates this [0].
From skimming the article, it doesn’t appear to address some of the hypothesized causes of this trend, including insufficiency in the definition of productivity to reflect Information Age work and arguments that the internet has less of a multiplier effect on the productivity of labor than other inventions (electricity, combustion engine, etc.)
[0] https://fred.stlouisfed.org/series/MPU4910063
Another comment provided a link to the St. Louis Fed’s chart of productivity growth, which illustrates this [0].
From skimming the article, it doesn’t appear to address some of the hypothesized causes of this trend, including insufficiency in the definition of productivity to reflect Information Age work and arguments that the internet has less of a multiplier effect on the productivity of labor than other inventions (electricity, combustion engine, etc.)
[0] https://fred.stlouisfed.org/series/MPU4910063
Ok, I've taken out '?' and put in 'growth'.
Not mentioned in the article but a possible source discussed at an Economics of AI conference in Toronto[0] (among other places) is the idea of a restructuring lag[1]. In effect, we as a society are investing an enormous amount of capital in activities that augment or replace existing economic activity but have not yet completed the transition.
For example, auto and tech companies are investing heavily in self-driving vehicles. At the same time, very few vehicles have been economically displaced as a result of that investment. In effect, we went from spending $X on cars to $X+$Y where $Y is self-driving research. Thus, productivity as measured in an aggregate economic sense, starts to fall. If anyone knows of more research on this argument, I'd love to know more.
[0] https://www.economicsofai.com/nber-conference-toronto-2017 [1] https://static1.squarespace.com/static/59c2a584be42d60a2772b...
For example, auto and tech companies are investing heavily in self-driving vehicles. At the same time, very few vehicles have been economically displaced as a result of that investment. In effect, we went from spending $X on cars to $X+$Y where $Y is self-driving research. Thus, productivity as measured in an aggregate economic sense, starts to fall. If anyone knows of more research on this argument, I'd love to know more.
[0] https://www.economicsofai.com/nber-conference-toronto-2017 [1] https://static1.squarespace.com/static/59c2a584be42d60a2772b...
As a Canadian, the thing that always astonishes me about working with my American counterparts is how many calls you want to have, and how often the topics discussed are the exact same points as the previous calls.
No agenda? No Call.
No agenda? No Call.
Are you sure that this is a national issue, rather than a problem with whatever company you're dealing with?
It's dangerous to stereotype but from my experience US companies are much more prone to have meetings for every little thing than German ones. And then meetings to prepare for meetings. And meetings to process results from previous meetings. And hopefully sometimes you get time to work on something.
Funny. I have the opposite experience with US companies (extremely few meetings at US companies in my experience compared to Canada especially), but my experience with German software companies is all about meetings, meetings, meetings, bureaucracy, documents, meetings, very hard to get actual work done.
Maybe culture is a factor. But to me, it's almost as if everyone's experience is completely different from everyone else's and that companies operate differently. None of us have worked at enough companies in enough countries to accurately identify what is what.
It's all anecdotes and none of them matter. Some people are lazy and some people are not. Some people schedule too many meetings and some do not. That's all there is to it.
Maybe culture is a factor. But to me, it's almost as if everyone's experience is completely different from everyone else's and that companies operate differently. None of us have worked at enough companies in enough countries to accurately identify what is what.
It's all anecdotes and none of them matter. Some people are lazy and some people are not. Some people schedule too many meetings and some do not. That's all there is to it.
My only experience with Germany (granted at a telecom company) was calls twice a day on the project I was working on. But it was on topic, made sure everyone was making progress and we had no blockers, and everyone involved seemed to be working on JUST my project for that entire week, so it actually worked. It was quite refreshing compared to my job in the US where I'm working on 100 things at once.
I've worked at several companies that had very different ways of doing things. One place I worked had many complaints on glassdoor.com about "micromanagement" yet I had the opposite experience because I got to work on a project or two for a week and make weekly progress reports, as opposed to another company where we had a meeting every morning and had to account for all our time working on many different things in 6 minute increments.
Everybody says they want to hire someone who can "multi-task" but it totally changes your outlook when you have experience enough to know deep down that it's not necessary and may well lead to lower productivity.
Everybody says they want to hire someone who can "multi-task" but it totally changes your outlook when you have experience enough to know deep down that it's not necessary and may well lead to lower productivity.
I assumed it was mostly culture within my company and industry, but then an article was posted about how there is a major loss in productivity across the nation so I thought I'd share a small example that I have witnessed and see if others notice the same.
edit: for what it's worth, I use to be Canadian focused in my role, and this was not an issue. Then I became more globally focused and it became instantly a problem, but consistently only in America. Not in Europe, not in Asia, Canada still mostly chill, but America wants to have a call to discuss.
edit: for what it's worth, I use to be Canadian focused in my role, and this was not an issue. Then I became more globally focused and it became instantly a problem, but consistently only in America. Not in Europe, not in Asia, Canada still mostly chill, but America wants to have a call to discuss.
As an American I'm astonished too.
Together, we can fix this. Let's have a call to discuss tomorrow 8am.
You forgot the standup meeting, the pre-standup meeting, the endless slack messages, the text to tell me you emailed me... it's crazy making, isn't it?
It’s because the person who wanted the call doesn’t actually write anything down from the call. Nothing gets documented, referenced, rechecked. Emails can at least be reviewed later.
No such luck with calls. Everybody wants to have calls and calls bypass documentation...so they want to have more.
I’ve always wanted a BPM system that hooks to my company calendar and automatically requests meeting notes to post from the person who called the meeting...and blocks them from requesting more meetings until those notes have been posted.
Think of it as spam filter for meetings.
No such luck with calls. Everybody wants to have calls and calls bypass documentation...so they want to have more.
I’ve always wanted a BPM system that hooks to my company calendar and automatically requests meeting notes to post from the person who called the meeting...and blocks them from requesting more meetings until those notes have been posted.
Think of it as spam filter for meetings.
You are really into something. You want a system that will block access to a resource until some process/workflow requirements are satisfied.
Too bad you can't force people to review prior meeting notes before initiating a new call or meeting.
Simple truth: technology will not fix your culture problems. The most technology can do is serve as a scapegoat for organizational policy, e.g. "the system won't let me do X" instead of "my boss won't let me do X".
If you want to change your culture, then reward positive behavior, fire sources of unapologetic cultural toxicity, and hire people who believe and profess the cultural change you seek.
Simple truth: technology will not fix your culture problems. The most technology can do is serve as a scapegoat for organizational policy, e.g. "the system won't let me do X" instead of "my boss won't let me do X".
If you want to change your culture, then reward positive behavior, fire sources of unapologetic cultural toxicity, and hire people who believe and profess the cultural change you seek.
I don't agree, I think the issue is that it is certain people jobs to just have meetings. They have no productive work to do, they measure there progress in number of meetings had. Business people usually.
s/Business /Sales/
If you put a salesperson in charge of a software team, you are; like the man says "gonna have a bad time".
Yeah, who does important meetings without meeting minutes anyway? If it's important, you want to remember it, and the way memory works, you will forget things without notes.
This is an over-generalization. I worked one job in Canada, where we'd waste an hour on a 'standup' scrum meeting, every day, and another job in the US, where we'd spend 30 minutes once a week on a sync-up meeting.
Yes and no. It's generalizing sure, but it's doing so based on my own experience. I have no doubt that there are some Canadian organizations that have adopted this strategy, I just haven't seen it nearly as bad myself.
Take my original post with a grain of unproductive salt.
Take my original post with a grain of unproductive salt.
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I don't disagree that most people are terrible about summarizing and acting after meetings, but just to bring up a contrary stance: Occasionally this approach can be the result of a problem on the opposite side.
For example: Due to circumstances outside your control, you must work with someone who is ineffective, too busy, or simply can't wrap their head around whatever is going on. So you end up having to baby-sit.
In certain cases that will feel a lot like what you are complaining about, particularly when the opposite party is in denial/don't understand that they are the source of the problems.
For example: Due to circumstances outside your control, you must work with someone who is ineffective, too busy, or simply can't wrap their head around whatever is going on. So you end up having to baby-sit.
In certain cases that will feel a lot like what you are complaining about, particularly when the opposite party is in denial/don't understand that they are the source of the problems.
I work with people in Europe right now and they are just as bad as anyone else. I get filled with 30 minute calls.
Last week I had 35 meetings before my noon.
Last week I had 35 meetings before my noon.
Wage stagnation has a hand in productivity decreases. Wages are pretty much stagnant since 2000 even in upperclass compared to costs rising [1]. People are working harder and losing ground, that is exhausting.
The Great Recession gave companies a decade of excuses for not giving real money wage increases, not just real compensation which people can't actively spend as consumers [2]. America has efficiently worked out wage increases of real money, yes 'real compensation' has moved but people can't spend that and most of it is not used.
The velocity of money is decreasing at a scary rapid clip since 2000 [3]. More money goes to wealth as inequality has increased. Less money in lower/middle is changing hands.
All of this leads to less reason for longer term employees to innovate and increase productivity.
Wages do have an impact on productivity and the skills people bring, American businesses have efficiently worked them out for the short term gains and long term drain. Wages are a key aspect in capitalism growth that seem to be the most fought against. Companies today have forgotten that wages are as American as it comes.
[1] https://www.nytimes.com/2014/10/07/upshot/the-great-wage-slo...
[2] https://www.nytimes.com/2018/02/28/opinion/corporate-america...
[3] https://fred.stlouisfed.org/series/M2V
The Great Recession gave companies a decade of excuses for not giving real money wage increases, not just real compensation which people can't actively spend as consumers [2]. America has efficiently worked out wage increases of real money, yes 'real compensation' has moved but people can't spend that and most of it is not used.
The velocity of money is decreasing at a scary rapid clip since 2000 [3]. More money goes to wealth as inequality has increased. Less money in lower/middle is changing hands.
All of this leads to less reason for longer term employees to innovate and increase productivity.
Wages do have an impact on productivity and the skills people bring, American businesses have efficiently worked them out for the short term gains and long term drain. Wages are a key aspect in capitalism growth that seem to be the most fought against. Companies today have forgotten that wages are as American as it comes.
[1] https://www.nytimes.com/2014/10/07/upshot/the-great-wage-slo...
[2] https://www.nytimes.com/2018/02/28/opinion/corporate-america...
[3] https://fred.stlouisfed.org/series/M2V
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Here's the problem with measures of productivity: they are uniformly terrible.
Productivity exists nicely in the minds of economic theoreticians but concrete measures if it so often seem unable to capture nuances of the modern economy. It's not that it's impossible to do, it's just hard to consider all the product offerings available to consumers. If we take some time to think out of the box, we see that productivity has definitely gone up over the past decade.
For instance, let's consider content-delivery-to-consumer productivity. Netflix, Hulu, YouTube, etc have all vastly increased the ratio (video content)/(cost to aquire) and (video content)/(time to aquire). Not only have consumers been spared the once necessary and time consuming trek to Blockbuster, $15 which would have once afforded you a few video rentals a month now gives you access to the entirety of Netflix's library of content. Amazing!
This is a textbook example of productivity, possible only because of technological advances, but it is not captured in traditional measures of productivity.
So we must disregard them.
Productivity exists nicely in the minds of economic theoreticians but concrete measures if it so often seem unable to capture nuances of the modern economy. It's not that it's impossible to do, it's just hard to consider all the product offerings available to consumers. If we take some time to think out of the box, we see that productivity has definitely gone up over the past decade.
For instance, let's consider content-delivery-to-consumer productivity. Netflix, Hulu, YouTube, etc have all vastly increased the ratio (video content)/(cost to aquire) and (video content)/(time to aquire). Not only have consumers been spared the once necessary and time consuming trek to Blockbuster, $15 which would have once afforded you a few video rentals a month now gives you access to the entirety of Netflix's library of content. Amazing!
This is a textbook example of productivity, possible only because of technological advances, but it is not captured in traditional measures of productivity.
So we must disregard them.
Management should in some cases be its own career path instead of the default for good workers who get promoted. Good project management is a skill that we just expect out of people who get promoted.
The pay scale should change so good hackers, analysts, etc can get raises akin to getting promoted, and the same for project managers. Because a good manager should be able to cut out the feckless meetings, get people working where they are most productive, and make a good working environment.
The pay scale should change so good hackers, analysts, etc can get raises akin to getting promoted, and the same for project managers. Because a good manager should be able to cut out the feckless meetings, get people working where they are most productive, and make a good working environment.
This is a great point—management really is its own skill. However, I think it’s also important that managers be skilled in the specialty that they oversee, especially if it is complex work like software development. I think that an excellent manager with no knowledge of software development (aside from attending an “agile summit” or something) would struggle to effectively manage a team of developers.
That’s what makes software development management so hard: to be good at it, you have to be a good manager and a decent developer, which are completely orthogonal skills.
That’s what makes software development management so hard: to be good at it, you have to be a good manager and a decent developer, which are completely orthogonal skills.
At an early age, people are divided into "nerds" and "jocks", but many of the top athletes in school are also the top students. Similarly, management and technical skills are often developed by different people, but some people are good at both. The trouble is just that there is a very limited supply of those who are excellent at both and even so it's difficult to keep up both kinds of skills.
Promoting people who are good technically but don't turn out to be good managers is one pitfall, but another is not promoting people who are good technically, but would be more valuable as managers.
Promoting people who are good technically but don't turn out to be good managers is one pitfall, but another is not promoting people who are good technically, but would be more valuable as managers.
No, I don't want professional managers who are making decisions with no expertise in the actual business unit they are involved in. I have that problem at the moment.
They make a good point about workers not able to stay at a job longer than a few years. I'm sure this impacts productivity quite a bit.
This article assumes that productivity is accurately being measured (GDP/worker hours) and doesn't address this issue. It would be interesting to see a breakdown per industry to see where the ups and downs are. I mean, you've got companies like google that generate a lot of money per worker, and they could do even more if they didn't invest in the future and only worked on stuff they had a monopoly for (search).
Jobs have become increasingly specialized, I wonder if this affects the measurement of productivity.
This article assumes that productivity is accurately being measured (GDP/worker hours) and doesn't address this issue. It would be interesting to see a breakdown per industry to see where the ups and downs are. I mean, you've got companies like google that generate a lot of money per worker, and they could do even more if they didn't invest in the future and only worked on stuff they had a monopoly for (search).
Jobs have become increasingly specialized, I wonder if this affects the measurement of productivity.
Employees aren't really incentivized to stay very long at positions, especially if you're looking for income growth. Most companies will cap you at 2-3% raises that basically incentivize you to switch positions for XX% salary increases
Needs a (2016) added to the title. Article is from May 2016
Communication facilitated the outsourcing and offshoring of the real economy. Want to see where the productivity has gone? Look to Shenzen and Bangalore.
Maybe it will come back in line with wage growth... If wages won't go up, maybe productivity will need to go down. :)
Okay, let's have a huddle where we open JIRA tickets to decide which meetings we should have to formulate the stories for that feature? Because I really don't think we can move the needle on solutioning this without a team-first approach?
How is productivity measured?
Files Created Per Minute [FCPM]^(Creative Insights per hour)
It looks like the BLS measures productivity as the dollar value of goods and services produced over the hours used to produce them.
Not much detail on those the dollar value is calculated, though.
Edit: I found a (somewhat patronizing) slideshow designed for K-12 students: https://www.bls.gov/k12/productivity-101
Not much detail on those the dollar value is calculated, though.
Edit: I found a (somewhat patronizing) slideshow designed for K-12 students: https://www.bls.gov/k12/productivity-101
GDP divided by worker-hours, basically. It's a crude metric, but no one has ever managed to come up with a better one.
U.S. Productivity Measurements Fail to Capture Digital Economy Output
The article fails to discuss executive compensation and stock buybacks, on which companies spend an enormous amount, and do not lead to any productivity gains.
Second Derivative Alert...
i.e. Slack is making everyone in your office less productive.
The way out is up.
Where is the source for this? What is the source for the "long term decline" mentioned in the article?
The first sentence mentions the BLS, so I went there, and this is not what they say. https://www.bls.gov/data/#productivity
If you dont want to go through the various data, here are some articles with charts:
This one covers since the last recession: https://www.bls.gov/opub/btn/volume-6/below-trend-the-us-pro...
This one goes back further, but only up until 2012: https://www.bls.gov/opub/btn/volume-3/what-can-labor-product...