Caution: Productivity Is Soaring
A recent Labor Department report showed that US productivity soared at 9.5% pace in third quarter -- more than four times the average productivity growth rate of the past quarter-century. Although fewer workers are working fewer hours, companies still saw a drastic increase in output. And with lower employment costs, reaped healthy profits.
Economists I heard hailed the statistic as a beginning sign of economic health and the capacity of workers to get more done.
Certainly with the economy in near shambles, and over 500,000 weekly unemployment claims being made, employees that still have work are working harder than ever – under the constant feeling of risk for their own jobs or businesses.
I’m all for productivity (I’m personally a HUGE fan of it!). But these recent numbers remind me more of the scene from the movie Schindler’s List when a Nazi Officer demanded (at gunpoint) that a Jewish worker perform a task in a specific – and very aggressive – time frame. The Jewish worker feverishly pulled it off, beating the clock by a fraction of a second, only to has his previous productivity evaluated on the basis of that do-or-die situation. Obviously, he came up short.
That we can drastically increase performance when pressed is a testimony to our human abilities. But just like a sprinter, we cannot keep the fast pace up for long distances. Sustainable productivity growth requires a sustainable pace.
