People Work Harder in Times Of Recession…BUT
The alliteratively titled article “Painful Productivity Pickup Promises Payoff” in the WSJ yesterday, forecasts that the Labor Department will report an annualized 7% gain in business productivity for the 4th quarter and yet a rise in the unemployment rate to over 10% in December.
ooooook.
See, this number is almost triple the average 2.5% growth from 2000 to 2008 AND last year the 2nd and 3rd quarters saw a 6.9% gain and a 8.1% gain, respectively. So we see here some form of a productivity paradox - where despite the workforce level declining, output is increasing - in times of recession where people are freaked out about losing their jobs and companies are squeezing as much productivity as they can out of their workforce (to protect their bottom lines), people apparently become more efficient workers.
Ok, this is not that new.
But what does this mean in real terms? Are people lazier in good times? Is there a natural propensity to slack off at the job when getting canned isn’t a risk? Will this lead to burn out? Will this have a permanent impact on wage-to-expected output?
Methinks a likely outcome is that when prosperity is restored and the unemployment rate declines, the folks on the front line that are squeezing out this extra bit of output today may expect higher wages or look for greener pastures. The smart money is on Monster.com or CareerBuilder … then again, this paradox may continue for a while…perhaps it is best to invest in a stamp or comic book collection.