Top of the News: The recession clobbered manufacturing productivity worldwide, according to the federal Bureau of Labor Statistics. The exceptions: The United States and South Korea. In 2008, American manufacturing productivity increased 1.2 percent.
That doesn’t surprise economist Sung Won Sohn, but it’s also another driver of a jobless recovery: “Productivity gains are another barrier to a rebound in employment. Fearful of losing jobs, employees are working harder and businesses are relying more on technology to trim labor costs.”
Even thriving Caterpillar said Monday it would recall only 550 workers of the 22,000 laid off earlier this year. Another 2,500 will be permanently let go.
Another downside, unfortunately, is that if trends of recent years continue that productivity doesn’t translate into wage gains for workers. It goes into the capital markets as corporate profits. This is at odds with the greater balance between investors and wage-earners that prevailed from the 1940s to the 1980s, when the American middle class reached its apogee.
Worldwide, the biggest loser was Singapore, down 6.6 percent. Singapore is Washington state’s 6th largest export customer.
The Back Story: Speaking of jobless recovery, Berkeley economist Brad DeLong offers this interesting data point. Employers keep cutting jobs even though the sales of American products and services are actually rising. They’re increasing at an annualized rate of 3.5 percent, a development since May.
Today Econ Haiku:
The banks are healing
The meme goes, as bad debt grows
Better red than dead?