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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.
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.
A rising tide lifts all boats, and that is exactly what has happened. You can't tell me the average worker today isn't better off than the average worker 100 or 150 years ago. Especially when you include the value of all the semi-socialist programs that are in place and funded by payroll taxes - things like social security, unemployment taxes, or medicare. The real problem is people just don't realize how well they have it these days because they were not around back then to understand how bad things were.
The truth is, there are no rewards for working harder or smarter, except perhaps survival.
The rewards only come from making other people work harder and smarter.
That's best done via threats, empty promises and reducing the number of available jobs while increasing the number of people.
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)
Breaking news: older generation deems younger generation to be shiftless and lazy.
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
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.
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.
A rising tide lifts all boats
Which is great if you can afford a boat.
I'd agree that the average worker now is better off now than someone from 100 years ago. That said, I can't always say the same ting about the average worker compared to someone just 30 years ago.
Back in the 80's, you could still get a manufacturing job with a high school diploma that paid about $15 an hour that had decent health benefits and a retirement plan. Sure, it was hard work, but you could raise a family on it.
That same worker today will probably end up working as a Starbucks Barista or Walmart cashier working for $8 an hour with no retirement plan and a health plan that they probably can't afford. These same people end up needing food stamps to feed their family.
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.
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.