Quote:
Originally Posted by Mavdog
^^^ do you understand that I showed what you said previously is inaccurate?
|
I sometimes leave out technical jargon when discussing economics...I do this because I understand what I'm talking about and I try to make it so that non-practioners can follow if so desired...
hence when I say that the bls measurement of output is essentially real gdp, that is just a slightly more comprehensible way of saying output is determined by
"deflating current-dollar industry value of production data from the U.S. Bureau of the Census with deflators from the BLS"....
(...obviously the output metrics for sub-sectors of the economy are based on data for the respective sectors of the economy, duh...)
The BLS measurement which they (and you) call Productivity is a ratio of *output* : *input*, *output* being an index of sector specific nominal dollar product deflated by BLS inflation measurements and *input* being an index of man-hours of employment.
So...
take a look at some actual data....
Period,
output,
input
3q07,
150.3,
83.4
3q08,
144.4,
80.1
3q09,
128.8,
69.3
Now compare a productivity indices for, say, the 3q09 to the 3q07...
3q07 = 100 x (150.3/83.4) = 180.3
3q08 = 100 x (144.4/80.1) = 180.3
3q09 = 100 x (128.8/69.3) = 185.8
So yeah....so-called productivity was higher in the 3rd quarter of 09 than in 08 or 07....
that's because unemployment has been rising faster than production has been falling. This is hardly reason for celebration....
...at most we might surmise that those not yet unemployed are more productive than those who have already lost their jobs, thereby raising the average productivity of remaining worker. This isn't necessarily indicative of any improvement because we don't know whether those who lost their jobs were marginally productive in the first place.
And all of this is based on the very faulty assumption that BLS calculations of inflation are reliable -- they're not. If BLS did a more reliable job of calculating inflation (ie, if the deflator was higher than that used by the BLS), then the *output* (the deflated current dollar industry value of production) would be lower and we'd see that there really haven't been any statistically significant increases in productivity.
So as I was saying, all this "increased productivity" means is that fewer people have a few more (albeit less valuable) bernanke bucks to fling around. It doesn't necessarily mean they're better off and certainly those unemployed aren't any better off.