UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

August 12, 2009

A RECOVERY ONLY A STATISTICIAN CAN LOVE

Annys Shin, Washington Post - The pile of economic data indicating that the worst of the recession is over just keeps growing. In the past few weeks, the government has reported that businesses last month shed the smallest number of jobs in nearly a year. The savings rate, after rising rapidly, held steady at levels not seen in at least five years. And from April to June, productivity surged to a six-year high.

But the same data also explain why any recovery isn't going to feel like one anytime soon for millions of Americans. Its existence will be confirmed by statistics, but, over at least the next year, the benefits are unlikely to materialize in the form of higher wages or tax receipts or more jobs.

"It's going to be a recovery only a statistician can love," Wells Fargo senior economist Mark Vitner said. . .

The Labor Department reported Tuesday that business productivity jumped in the second quarter to a seasonally adjusted annual rate of 6.3 percent, far higher than the annual average of 2.6 percent from 2000 to 2008.

Higher productivity helps raise living standards in the long run and is good for corporate profits because it allows companies to produce more without paying higher labor costs. But the boost in productivity was largely due to businesses slashing hours faster than output. Labor costs per unit fell, but so did the buying power of workers, further constraining already weak consumer spending, which accounts for 70 percent of the economy.

Increased productivity, combined with other factors, could also bode poorly for employment because as long as businesses can do more with fewer people, they can delay hiring. Adding to that potential delay is the fact that employers have slashed hours to an unprecedented degree to survive the recession. The average time spent working each week is at a record low, and just under 9 million people are working part time for economic reasons.

3 Comments:

Anonymous directed at no one in particular said...

If you think it is all just a series of accidents and coincidences that keep further enriching the fraction few continuously at the expense of 99% of the rest of us, you're an idiot. The same is true if you think "recovery" is just around the corner. The unsustainable fraud being perpetrated by these legacy banksters and those in government who are carrying their water is so big that it can't be hidden forever (can you say "toxic assets" are ALL still there just hidden until this fall?), and when it all comes to light you're looking at nothing less than chaotic global mega geopolitical disruption.

Planned Wage Destruction has been going on for decades - and the rightwingnuts' sick social darwinist cheap-labor ideology will not allow the productivity gains to ever be shared with those who produced them. Rightwing nutters cannot even conceive that division of labor is a COMMUNITY effort and the great benefits division of labor provides therefore belong to the community (to all the people who participate, thereby making division of labor possible).

After all, the rich did it all by themselves doncha know, and the working poor are just stupid and lazy and deserve to be kept poor!

August 13, 2009 6:21 AM  
Anonymous Anonymous said...

The elephant in the room on unemployment has been there since automation began. Eventually, industry will need few, if any, workers to get their products out. This sounds like a very profitable idea.

Unfortunately, this would likely lead to 50% or more unemployment. People without jobs will not be able to buy these products regardless of how efficiently they are produced and the whole economy will come crashing down again.

We need to do some serious thinking about how to provide the unemployed with enough income to drive the economy. Any ideas?

August 13, 2009 10:53 AM  
Anonymous pay justice said...

It couldn't be simpler: the gains from technology were always meant to give the human species increased leisure time, time to pursue higher learning, or to do more fishing or playing with your kids or whatever trips your trigger. The natural progression is simply to reduce the number of hours in the workweek for everybody. If everyone gets fairpay (that is if we outlaw overpayunderpay), there is plenty of wealth being produced for everyone on the planet to have great quality of life while working fewer and fewer hours.

August 13, 2009 6:05 PM  

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