Commentary
U.S. economic productivity gains translate to decreased quality of life for most Americans.
“Productivity growth, measured as output per worker, has outpaced all other G7 economies in this cycle so far,”
national economic adviser Lael Brainard remarked on Feb. 15.
The White House highlighted U.S.
productivity gains as evidence of the positive impact of “Bidenomics” on the economy. Some economists argue that
increased productivity could mitigate inflation resulting from economic growth, a viewpoint favored by the Biden administration, because of its association with the highest inflation rates seen in decades.
However, the increase in productivity hasn’t been beneficial for the average American. It was driven by reduced costs as a result of telework, increased workloads, and automation, none of which translates to an improvement in employees’ standard of living or an increase in job opportunities.
Since 2020, companies have been figuring out how to make the most of
their digital tools to create the most value. It all started with teleconferencing and other apps that let people work remotely. Companies saved money on things such as office maintenance, supplies, and furniture by having employees at home instead of in the office. They also found it easier to ask employees to use their own laptops. Most companies stopped providing free telecommuting tools since having things such as a ring light, an external mic, and a camera became essential for getting a job.
Significant savings occurred as 10-year office leases expired and were either not renewed or downsized to smaller workspaces. Additionally, with the decline in the need for client meetings, even the reduced office space no longer required a downtown location or even a location within the city. Simultaneously, while companies saw cost reductions, revenues remained stable or increased. Achieving the same or higher revenue with reduced costs inherently signifies an improvement in both efficiency and productivity.
On the personnel side, employees have grown accustomed to telecommuting and the flexibility it offers, such as being able to do laundry in the middle of a Wednesday or pick up their kids from school. This familiarity has led them to accept higher work quotas rather than returning to the office. Surveys
have confirmed that employees generally
put in more hours and manage
heavier workloads than before the pandemic. With this
increased volume of work, company productivity rises.
The implication of a productivity increase, as touted by the White House, is that with increased productivity, the economy is doing better. More people can find jobs, and jobs will pay higher wages. But if the increase in productivity comes from an increase in workload, this really means that each worker is now doing more than one job, and fewer jobs are available for job seekers. For example, 10 employees are now doing 10 percent more work each than before the pandemic; they collectively eliminated one job. This is a win for the company whose profits will increase, adding to one of the indicators of a good economy: increased corporate profits.
Besides increasing employee workload, another reason behind the productivity surge has been the swift adoption of automation and robots. While factories have been progressively automating since World War II, advancements in artificial intelligence (AI) and the decreasing cost of technology, coupled with the rising expense of human labor, have led to a dramatic acceleration in technology adoption.
In addition to the fact that robots require only scheduled maintenance days off, they don’t take sick leave or suffer workplace accidents. Moreover, they don’t file lawsuits against employers, a trend that is complicating staffing issues in the United States. Additionally, by employing robots, companies can circumvent diversity,
equity, and inclusion quotas.
Robots and AI can now handle many tasks previously performed
by low-skilled workers. This includes
entry-level positions, as well as roles in customer service, food service, retail sales, and cashiering. Additionally, up to
20 percent of administrative work—encompassing tasks such as data collection and analysis, presentations, training, and paperwork processing—can already be performed by AI.
According to some estimates, as much as
27 percent of all jobs in developed countries are at risk of being overtaken by AI in the near future. By 2030, it is projected that up to
30 percent of all work hours in the United States could be automated. Once these jobs are eliminated, but companies maintain the same level of output, the White House can claim to have improved productivity and to have built a better economy.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
