You're Working Harder And Faster, But Who Benefits?

It turns out productivity is surging, up more than 6 percent between April and June. That's the biggest jump since 2003, and it's great news for corporate profits. But maybe not so great for workers, who are generating more output without getting more paid hours or seeing their old co-workers return to the job. Guest host David Greene talks to business editor Marilyn Geewax about the sharp rise in worker productivity reported this week by the Labor Department.

Copyright © 2009 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

DAVID GREENE, host:

Work harder, work faster - that seems to be what everyone's doing right now, or at least people who still have jobs. Last week, the Labor Department released new figures on productivity growth. That's the measure of how many goods and services U.S. workers are producing per hour.

Turns out productivity is surging - up more than six percent between April and June. That's the biggest jump since 2003, and it's great news for corporate profits. Maybe not such good news for workers who are generating more output without getting more paid hours or seeing their old coworkers return to the job.

Joining us to discuss what all this might mean for the unemployment picture is NPR senior business editor Marilyn Geewax. Marilyn, welcome.

MARILYN GEEWAX: Hi, David, it's good to see you.

GREENE: Likewise. So, first, tell us why we're seeing productivity growing so fast right now.

GEEWAX: These numbers are telling us that employers are cutting their workers' hours and eliminating jobs at a really rapid pace. At the same time, they're producing the same amount of goods and delivering the same services.

GREENE: That seems impossible.

GEEWAX: Well, that's what we thought, but we sent one our reporters, Frank Langfitt out to a small restaurant just north of Washington, D.C. to take a look. And he found that the restaurant owner there had 10 fewer workers compared with the days before the recession. She's cut her costs by about $4,000 a month and that allows her business to survive, but it means workers have to keep going faster, harder. And that kind of thing's happening all over the country.

GREENE: But there are reports that the economy's actually picking up now, maybe. Does that mean employers are going to start hiring again at some point soon?

GEEWAX: David, that is the key question. Last month here in Washington, a huge crowd of economists packed into a lecture hall to hear Lawrence Summers talk about that. He's the head of President Obama's National Economic Council. And Summers pointed out that in a typical recession, employers are really reluctant to lay off their workers. They spend a lot of time and money training people, so they don't want to cut them at the first sign of a downturn.

GREENE: Right.

GEEWAX: Summers said the credit crisis was so bad that employers were very, very quick to fire their workers in this recession. They were afraid they wouldn't be able to borrow money, so they thought they had to slash payrolls to hoard the cash. Now, the worst of the credit crisis is over and we're not seeing the kind of panic that we saw last fall and early this year.

GREENE: And then why won't we see, then, the jobs sort of snapping back, I mean, if employers, as you say, are gaining confidence and feeling less frightened right now?

GEEWAX: That is the hope right now, so that's a possibility. And especially for businesses that sell their goods overseas. We're seeing that Asia, especially, is snapping back really quickly. And even Europe doesn't look so bad. So maybe we're going to get big orders from overseas for construction equipment or aircraft. And that may mean some U.S. employers are going to have to add workers quickly.

But we shouldn't forget what a very deep hole we are in. We've got nearly 15 million people out of work today. And we're still losing jobs. Last month we saw another quarter of a million jobs disappear. But keeping all of that in mind, David, it is encouraging to see those productivity numbers.

They suggest that companies pretty soon are going to be seeing bigger profits, and once the money rolls in, employers are going to do what they always want to do, which is grow. And they'll put those profits into new offices, into factories, expanded product lines. And eventually that's just got to mean more jobs.

GREENE: Marilyn, thanks a lot for joining us.

GEEWAX: Oh, you're welcome.

GREENE: That's NPR's senior business editor Marilyn Geewax.

This is NPR News.

Copyright © 2009 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.