Filed Under: Business

BLS: Following pandemic shift, US worker productivity plummets

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According to data from the Bureau of Labor Statistics, worker productivity in the United States suffered its largest drop since 1947 in the first half of 2022. Productivity is strong in manufacturing, but it’s down elsewhere in the private sector, according to Dartmouth Economic Professor Diego Comin. He noted that productivity is particularly tricky to gauge for knowledge workers, whose contributions aren’t as easy to measure.

“It is strange,” Comin said. “The data is very odd these past couple of quarters in so many different ways. It’s hard to even tell a coherent story.”

The productivity plunge is perplexing to employers after productivity took off to levels not seen in decades when the COVID-19 pandemic forced an overnight switch to remote work. Since the pandemic started, “the link between hard work and reward has been broken,” according to ZipRecruiter Lead Economist Sinem Buber. She added this has resulted in “curbed ambition” for many workers.

Part of the reasoning for the lower worker productivity could be the substantial leverage employees gained amid a labor shortage caused by the pandemic. Some exercised their power by participating in the “Great Resignation.” Others set more boundaries at work through quiet quitting.

“People are missing their work hours, they’re showing up late for their shifts, but companies can’t do anything about it because they know it is so hard to replace those workers right now,” Buber said. “Back in 2019, the policy was one strike and you’re out, I’ll get a better person to do the job. Right now it’s 10 strikes, maybe you’ll be out.”

Leaders are under heightened pressure to boost employee performance as firms try to establish a post-pandemic normal. Many employers have started using software to track employee activity. However, Microsoft Chief Executive Satya Nadella has argued that the technology can have a harmful effect on trust and employee engagement.

“Ultimately, for the business, these tools are about really helping their employees thrive,” Nadella told Bloomberg News in September. “The only way a business is successful and productive is if employees feel that sense of empowerment, that sense of energy and connection for the company’s mission and are doing meaningful work.”

The Washington Post contributed to this report.

IT’S A QUESTION THAT’S BEEN MORE OFTEN POSED SINCE THE PANDEMIC…
HOW PRODUCTIVE ARE PEOPLE WHEN THEY’RE WORKING?
WELL ACCORDING TO THE LATEST MODEL…
NOT VERY PRODUCTIVE AT ALL.
IN FACT IT HAS AMERICANS WORKING AT A PRODUCTIVITY RATE AT A 75 YEAR LOW.
THE BUREAU OF LABOR STATISTICS MEASURES HOW MUCH OUTPUT A PERSON CAN HANDLE ON THE JOB WITHIN ONE HOUR.
THIS TIME LAST YEAR THE DEPARTMENT WAS PRAISING SOME OF THE HIGHEST LEVELS OF PRODUCTIVITY WE’VE SEEN IN DECADES.
ECONOMISTS SAY THE RELIANCE ON TECHNOLOGY DURING THE PANDEMIC WAS GOOD FOR SOCIETY…
EASILY PUTTING A JOB IN A PERSONS LAP WHETHER IT’S AT HOME OR IN AN OFFICE.
IT’S WHAT MAKES THE LATEST DATA SO PUZZLING TO SOME EXPERTS.
BUT PERHAPS REMOTE WORK HAS GIVEN EMPLOYEES A ‘BARE MINIMUM’ MENTALITY.
ESPECIALLY AMONG YOUNG PEOPLE ACCORDING TO THE REPORT.
TECH COMPANIES SEEM TO SEE IT FIRST HAND TOO.
GOOGLE AND META BOTH IMPLEMENTING NEW MEASURES TO GET THE MOST OUT OF THEIR EMPLOYEES.
PRODUCTIVITY SHOULDN’T JUST BE AN IMPORTANT FACTOR FOR EMPLOYERS.
SINCE IT’S THE ULTIMATE DRIVER OF OUR STANDARD OF LIVING.
HIGHER PRODUCTIVITY TRANSLATES TO MORE GOODS AND SERVICES CIRCULATING IN AN ECONOMY.
WHICH MEANS SUPPLY IS THERE AND THE COSTS ARE DOWN.
WITH POTENTIAL TO TAME INFLATION…IN A YEAR WHERE IT’S BEEN TUMULTOUS.

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C 50%
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According to data from the Bureau of Labor Statistics, worker productivity in the United States suffered its largest drop since 1947 in the first half of 2022. Productivity is strong in manufacturing, but it’s down elsewhere in the private sector, according to Dartmouth Economic Professor Diego Comin. He noted that productivity is particularly tricky to gauge for knowledge workers, whose contributions aren’t as easy to measure.

“It is strange,” Comin said. “The data is very odd these past couple of quarters in so many different ways. It’s hard to even tell a coherent story.”

The productivity plunge is perplexing to employers after productivity took off to levels not seen in decades when the COVID-19 pandemic forced an overnight switch to remote work. Since the pandemic started, “the link between hard work and reward has been broken,” according to ZipRecruiter Lead Economist Sinem Buber. She added this has resulted in “curbed ambition” for many workers.

Part of the reasoning for the lower worker productivity could be the substantial leverage employees gained amid a labor shortage caused by the pandemic. Some exercised their power by participating in the “Great Resignation.” Others set more boundaries at work through quiet quitting.

“People are missing their work hours, they’re showing up late for their shifts, but companies can’t do anything about it because they know it is so hard to replace those workers right now,” Buber said. “Back in 2019, the policy was one strike and you’re out, I’ll get a better person to do the job. Right now it’s 10 strikes, maybe you’ll be out.”

Leaders are under heightened pressure to boost employee performance as firms try to establish a post-pandemic normal. Many employers have started using software to track employee activity. However, Microsoft Chief Executive Satya Nadella has argued that the technology can have a harmful effect on trust and employee engagement.

“Ultimately, for the business, these tools are about really helping their employees thrive,” Nadella told Bloomberg News in September. “The only way a business is successful and productive is if employees feel that sense of empowerment, that sense of energy and connection for the company’s mission and are doing meaningful work.”

The Washington Post contributed to this report.

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