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After 150 Years, the American Productivity Miracle Is 'Over' (qz.com)
An anonymous reader shares an article on Quartz: Economist Robert Gordon has spent his career studying what makes the US labor force one of the world's most productive. And he has some bad news. American workers still produce some of most economic activity per hour of any economy in the world. But the near-miraculous productivity growth that essentially transformed the US into one of the world's most affluent societies is permanently in the country's rearview mirror. In his new book, The Rise and Fall of American Growth, the Northwestern University professor lays out the case that the productivity miracle underlying the American way of life was largely a one-time deal. It was driven by a flurry of technologies -- electric lights, telephones, automobiles, indoor plumbing -- that fundamentally transformed millions of American lives within a matter of decades. By comparison, Gordon argues, today's technological advancements -- Uber, Facebook, Amazon.com -- will touch the productivity of the American economy lightly -- if at all. And a combination of demographic factors, such as the aging of the US population, and sociological problems such as growing inequality and educational performance that's worsened in comparison to many other rich nations, will stymie economic growth for the foreseeable future.For those not following Gordon's work, he has been expressing these views for quite some time now. Here's
his TED talk from 2013 It shouldn't come as a surprise that many strongly disagree with Gordon's views. Kevin Kelly wrote in 2013: I think Robert Gordon is wrong about his conclusion: According to Gordon growth has stalled in the internet age. This question was first asked by Robert Solow in 1987 and Gordon's answer is that there are 6 'headwinds' six negative, or contrary forces which deduct growth from the growth due to technology in the US (Gordon reiterates he is only speaking of the US). The six 'headwinds' slowing down growth are the aging of the US population, stagnant levels of education, rising inequality, outsourcing and globalization, environmental constraints, and household and government debt. I agree with Gordon about these headwinds, particularly the first one, which he also sees as the most important. Where Gordon is wrong is his misunderstanding and underestimating of the power of technological growth before it meets these headwinds. First, as mentioned above, he underestimates the value of the innovations that the internet has brought us. They seem trivial compared to running water and electric lights, but in fact, as billions around the world show us, they are just as valuable. [...] So the 3rd Industrial Revolution is not really computers and the internet, it is the networking of everything. And in that regime we are just at the beginning of the beginning. We have only begun to connect everything to everything and to make little network minds everywhere. It may take another 80 years for the full effect of this revolution to be revealed. In the year 2095 when economic grad students are asked to review this paper of Robert Gordon and write about why he was wrong back in 2012, they will say things like "Gordon missed the impact from the real inventions of this revolution: big data, ubiquitous mobile, quantified self, cheap AI, and personal work robots. All of these were far more consequential than stand alone computation, and yet all of them were embryonic and visible when he wrote his paper. He was looking backwards instead of forward." You might also find Freakonomics' Stephen J. Dubner views on this interesting.
Uber, Facebook, Amazon aren't technological advancements. Christ, people are stupid.
I can tell you exactly what happened. People kept being told if they worked harder they'd be rewarded. So they worked harder and harder.
Now, the loudest voices from the conservatives (the group telling everyone to pull themselves up by their bootstraps and work harder) are saying "we never claimed there was a guarantee of a reward" and "shut your whiny entitled mouth" when the highest-producing people in recorded history ask for their reward.
So now the productivity gravy train has come to a screeching halt. Now that the rug of empty promises has been yanked out from under them, the people are showing no interest in working harder for nothing.
There may have been a pause but with us all being on the cusp of so many different breakthrough technologies, like 3D printing, self-driving cars, advances in AI, and lots more exotic stuff coming to fruition in materials research we can easily have another such burst of productivity.
Don't let the pessimists get you down, greatness is always incomprehensible to them and they cannot see it coming even if beaten over the head with it.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
"TED Talks" ran their course some time ago.
#DeleteChrome
When a MBA degree became desirable than an engineering degree, Americans became more interested in imaginary wealth than creating and improving things
While companies are busy measuring smartphone sales as some proxy for how well the industry is doing (and calling the PC market dead), I see a difference between PCs as machines used to do things, and smartphones as ways to waste time. Obviously this isn't exactly true, but in general it is. This is why smartphones have replaced PCs in popularity - people would rather waste time than do work. The media is so focused on getting our "attention" rather than helping us get things done, and we're so connected to that media now, that in my opinion it's obvious why productivity is falling. People aren't really working when they're "working" anymore. They're just distracted.
Also, don't discount the importance of air conditioning in US productivity, especially in the southern US.
That said, there could be a new jump in productivity as better technologies are developed. What if we counteracted smartphones with a drug or a widget that could make you focus?
"I have never let my schooling interfere with my education." - Mark Twain
For at least the last hundred years, they've been writing economics books like really boring Mad Libs:
"The __(segment of economy)__ is going to __(boom/crash)__ in the next __(time window)__ because __(jaggedy line graph of the economy)__ looks a lot like __(other jaggedy line graph that turns sharply up or down)__."
It must be nice to be able to pick your doctoral thesis with a dart board.
I hope that Gordon's prediction is incorrect, but being in the manufacturing industry and seeing the new hires come and go makes me worry.
The millennials are for the most part lazy and dependent. They can't function without their cell phones and this is inside a plant where cell phones are prohibited except for management and supervisors.
Have you ever fallen asleep at the keybhanusdiog?
The "problem" with interconnection is that it propagates outside of just Internet and device-to-device linking.
During the last few decades it has become increasingly easier for people to not only communicate but to travel and work together (or fight), no matter where they are.
This means:
- Salaries across the world are slowly trending towards a midpoint. This will suck for more developed countries and will boost lesser developed countries.
- Productivity will likewise even out: countries where people work 6h a day will no longer be able to sustain that work style. Similarly, countries where people work 12h a day, 6-7 days a week will slowly roll down to less than that.
- Cultures will clash. They already do and it's not pretty. Some countries' culture is 500 years back: they will have to go through a deep transformation to reach present time, or they will bring down more evolved cultures - and then productivity will be the least of our worries as a species.
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
The real problem is people just don't realize how well they have it these days
That is incredibly true - a big part of this is that the media which should be researching and pointing this out, is instead over-dramatizing every small problem encountered to a degree that over time, things LOOK worse and worse even as they get better.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
He does mention wage disparity, but that is due to Government activity, not the Market.
This why anarchy, a total absence of government activity, always results in everyone having the same wage.
Wait, what?
Chuuch. Preach. Tabernacle.
We could have continued increasing productivity, at least into the foreseeable future.
I remember a couple of decades ago when telecommuting became possible (roughly 1990), and the IRS stepped in with rules that made it less inviting as an option. Among other things, you couldn't deduct the expenses of your home office, and you could no longer be a consultant (1099), you still had to be a regular employee (W-2). Unless, of course, you were a doctor, lawyer, or architect - those three professions were excepted from the rule.
A little later, someone pointed out that GE pays no taxes (among many other businesses), leading to the conclusion that it's nigh impossible to start a business that makes a competing product.
Microsoft did its "embrace, extend, extinguish" thing to a bunch of other companies. Microsoft would "consider purchasing" your software business, sign an NDA and send in some engineers to check out the internals and otherwise determine the fitness of the purchase, choose not to purchase, then come out with a competing product 6 months later.
This happened so many times it became a meme.
(Let's not forget that Microsoft illegally forced itself on many computers. Whole companies sprang up to deal with viruses and other security exploits, while a viable alternative floundered. The first person to purchase a computer and return the Windows software got sued by Microsoft, and had to justify his actions.)
We gave the telecom companies $200 billion to bring everyone up to broadband. They took the money and did nothing - much of the country can't get internet access, Comcast can be the most hated company in America, and mobile phone service is spotty, the quality is choppy, and the communications insecure.
We give away our productivity and resources to other countries for little or no gain, we've been neglecting our roads and bridges, our electric service is outdated and increasingly unreliable, our health care is third-world-class. Our education is top-heavy with administration and mindless rules, and the cost of extended education burdens the student for the rest of their life.
(It's really hard to start a new business, make an innovative invention or do scientific research, when you're burdened with education expenses for the rest of your life, have to hold down a low-paying job just to survive because the high-paying one was outsourced to a H1B, can't get good internet service, and are forced to use Windows compatible software, and have to purchase health insurance at $5,000 per year per family member.)
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This is in stark contrast with, for example, America of the 1920s. Reading newspaper articles of the times shows that the country was hopping with ideas. Just about everyone on the street in NYC had ideas on how to start a business, invent a new machine, or otherwise make their fortune in America.
Immigration was easy, just show up and get registered. Immigration was a self-selecting evolutionary sieve for people who were smart and could get along with other groups. You had to leave your family, community and support system behind, and learn a new language, culture, and laws. But if you could do it, you could make enough money to have the rest of your family come over to join you.
(Nowadays it takes 10 years and $30,000 for a Russian (to use an example) to emigrate to the US... if you win the immigration lottery.)
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My point for all this is that we *could* still be having increases in productivity. If we just eased up on all the arbitrary unfairness and burden we place on the people, The electronics revolution isn't quite over yet, the internet revolution is about half over, there's a ton of room for innovation in medical sciences, and the bio revolution is just getting started. (And the start of the AI revolution might be very cl
is more and more likely to be made of silicon and steel. Automation is rendering the productive capacity of individual human beings less and less relevant. With production efficiencies at historic highs and still increasing rapidly, we should ALL have a great standard of living and a great quality of life - lots of time for creative pursuits, and friends and family, without working our fingers to the bone. But NO - workweeks are getting longer, more people have multiple jobs, and average incomes, (except for the elites), are dropping. Why do you think that is?
Fuck the "headwinds" - the clear and present danger to a healthy, happy future for most of us is extreme-and-still-growing wealth concentration. We need to tackle the truly Herculean task of re-engineering our social institutions, our cultural and historical and religious biases, our mass propag.., er, media infrastructure, and our fundamental outlook on social hierarchies. All the pearls of wisdom from all the pundits in the world are just more circuses - distractions from the job of building sane and fair societies for ourselves and our children.
'The Economy' is a giant Ponzi scheme whose most pitiable suckers are the youngest among us and the yet-unborn.
"de-regulation?"
Economically significant regulatory rules are those that, among other things, "Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities..." (Executive Order 12866)
Clinton issued a total of 361 economically significant rules and Bush issued 358. As of the end of January 2016, Obama had 393 with another 47 on the drawing board (Obama's Midnight).
Obama has been issuing 55 economically significant regulations per year of his administration. Clinton's and Bush's record aren't much better. Over-regulation is a more likely culprit or reduced productivity.
On your other points, I can't recall how unions have contributed to productivity nor how greed necessarily decreases productivity.
I would disagree, at least in the case of Amazon. They've revolutionized Logistics and Distribution, especially in concert with the shipping partners like UPS, FedEx, and DHL.
Better logistics and distribution adds to productivity.
Drastic cuts, old wealth disappearing, new order emerging etc held something at bay in Europe.
America had its own internal frontier. As long as the frontier was moving west and more land came under the till the population growth kept it going. World war II and the baby boom helped it going farther.
Finally we have run out of frontiers both in Europe and America. But that is merely the space frontier, the time frontier is endless. The next generation, always larger than the previous in sheer numbers will provide the demand needed to create more jobs than lost. But the pace is furious and is acceleration. Society does not have the time to adjust or grow to create more demand.
The world simply does not have the energy and material needed to provide first world comfort to the third world. But efficiency gains in material and energy use, as well as labor use, can create the demand needed to keep all the world employed gainfully.
Improving the living conditions of the third world is how we can create jobs in the first world. We need to promote trade that will genuinely improve the lives of the people of the third world, not trade policies driven by tax dodgers, job outsources, and environment scofflaws.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Yes!
He didn't trigger the Great Recession. Financial deregulation is the major cause. We can see this because countries who kept their regulations in place didn't have mortgage crashes.
Although bubbles in general are perhaps inevitable in capitalism, being they've been happening for 400-odd years and nobody has figured out how to stop them. We may learn to prevent a given TYPE of bubble, but we invent new types.
Table-ized A.I.
No, not the welfare recipients. American laws and tax structures favors people who have money, use people to their, and game the system.
Just a though experiment:
A person works to make $100; they can expect to end up with $70 in their paycheck.
If someone's rich relative gives them $100, they get $80.
What utter bullshit. The person doing nothing gets more, and they procreate, breeding more people who provide no benefit.
https://www.youtube.com/c/BrendaEM
The millennials at the company i work for seem to be, on average, hardworking and productive members of the team. The people who are a little older and have been with the company for five or ten years may still have a leg up on them, but that's because of experience which is obviously something that only comes with time.
Perhaps the hiring practices at your company need improvement? Or maybe you need to adapt more? What does "can't function without their cell phones" mean exactly anyways?
"the young men of the governing class, are habituated to lead a life of luxury and idleness both of body and mind; they do nothing, and are incapable of resisting either pleasure or pain."
- Plato, The Republic, 380 BC
This Space Intentionally Left Blank
Where did I say they needed to work harder and write better than previous generations? I said to work hard, not hardER.
I guess you can add reading comprehension to the list, so they actually understand the communications people send. Also the ability to let perceived outrage diminish as it's all too easy to take offense where none is meant. That's just a super valuable life skill all by itself.
Last word for me, I've said what was needed:
but the world accepts this now
And that... is why you fail.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Oh boo hoo.
"I can't do whetever I want with toxic chemicals because of regulations designed to prevent abuse and widespread environmental damage. Woe is me."
Eat the rich.
Let me help you with this.
Let's say you did exactly as you suggested. Using 60 seconds of research and some basic intelligence, I can advise you that:
1) You should probably not have paid cash if FRB reporting was your concern, inasmuch as an $11k transaction not in cash is not reportable.
2) The chemical company is not required to report anything for the sale of potassium ferricyanide.
3) No agencies have standing to prevent the sale of potassium ferricyanide.
4) There are no transportation regulations pertaining to potassium ferricyanide.
Fine, I get it, you chose a bad chemical to try to make your point with. But the problem is, to find a chemical that supports your point, it would actually be dangerous I don't give fuck-all about your fascio-libertarian economics if it means somebody can just drive a truck past my house full of enough hydrogen peroxide to blow up my whole neighborhood, without any public body being involved.
The notion that wage disparity is the direct result of government activity and not the market is absurd as it flies in the face of reason.
The same line of reasoning could be applied to criminal justice. Perhaps if we got rid of the meddling government, we could allow a heretofore unknown or suppressed method of human social behavior to actually do a better job of promoting harmony between individuals in society. After all, look at failed states all over the world. The lack of central government brings with it both economic equality and civil tranquility.
Chuuch. Preach. Tabernacle.
Those regulations you hate so much wouldn't be needed if the shitheel companies hadn't fucked over the environment in countless ways already.
Eat the rich.
It does not fly in the face of reason. Although perhaps it does fly in the face of conventional wisdom today which is why you think it is absurd.
Question: We have government today, and have had such for 227 years (starting at the Constitution). Have wages *ever* been equal? In that entire time?
So why do you believe that it is so impossible that the action of government is responsible for such?
I can't say what you personally believe, but a lot of people have this conception of less government creating things like monopolies and big business which we needed regulation to stop.
Bullshit. You know how railroads and steel companies and oil companies became so powerful? Government grants, government action, government regulations. Government lands and right of ways were handed out to railroads. Government mineral rights were handed out via government corruption to companies with no bidding (Teapot Dome scandal). Governments colluded in running the Indians off lands that got in the way of development (despite treaties signed to the contrary). Party political machines took payments to directly affect policy and people used to line up at the doors for political appointments.
Sure you point to my statement about a completely unknown force stabilizing wages and call that bunk, because on the face of it, it seems like an easy statement to make. But the point I am trying to make is that the conventional wisdom about more regulation == equal wages is that it has similarly never actually been seen. That assertion is just as vague and hopeful as any statement I could make about some mystery force that equalizes wages due to the market. We just assume that if the government is big enough and strong enough and led by the right person making the right laws, that wages will equalize and the market can never compete. That is just as untested an assertion as my admittedly vague statement.
There were 4 causes of the mortgage crisis:
1) politicians of all stripes had their hand in the cookie jar and were in bed with wall-street.
2) libtards forced the banks to give loans to people who had ZERO business owning a house (not nearly enough income, horrible credit scores, massive debt)
3) the federal government (through Fannie Mae) agreed to buy up ANY mortgage after 6 months, meaning the lenders only had to find people who could make 6 payments (instead of the traditional 360), further incentivizing the lowering of standards.
4) Ridiculously low interest rates
What do they all have in common? Big federal government. Limited government would have never allowed this because the banks lending to people who had no business owning a home would simply go out of business.
That's a huge exaggeration. The CRA laws merely meant that loanee's neighborhood can't be used as a factor to reject loans. CRA said ZERO about skipping income verification. Most of the problem loans were NOT in so-called minority neighborhoods. I lived in S. Calif. during the crash, and saw where the foreclosures were with my own eyes. The "minority" houses were usually closer to the center of town, and thus kept a lot of their resell value even during the slump. The outskirts took the biggest hit.
Do you have a link on this?
And if true, why did so many banks croak during the crash? If FM was to back most their loans, they'd still be alive. (Most later bailouts were not thru FM.)
You blame "big gov't", but high interest rates would be more gov't interference. It seems a contradiction. If gov't didn't regulate interest rates at all, the rates would be as low or as high as banks wanted. And the fed rate doesn't prevent banks from charging higher rates from the fed rate, it only sets the floor. Therefore, "low" was not forced upon the banks.
The banks voluntarily got themselves in hot water. They voluntarily skipped background checks, largely because they wanted to quickly re-sell them to a bigger sucker bank before it all crashed down. Ponzi-ish. They knew their slime.
Many did go out of biz. The only reason there were some bailouts is because the banks were too big to fail: they'd take the entire econ with them if most failed. If anti-trust were enforced, they perhaps would not be too big to take econ down with them.
Banks are key infrastructure for good or bad. Key infrastructure usually has to be regulated to some degree, otherwise companies would hold civilization hostage for cash, kind of like OPEC.
Table-ized A.I.