It's The Economy, Stupid.....

[JoseCuervo]

Some of the "productivity" is kinda funny. I saw an article on the Tax preparation industry, and many of the big accounting firms and preparers are just scanning the documents and sending them to India. The number of returns they said would be done in India this year was staggering. I forget the number, but it was such that my jaw kind of dropped.

So yes, "productivity" is up, and thanks to advances in production scanners and sending, you can ship work to India in a heartbeat.

 

[pawclaws]

Uhhh one small problem, according to the BLS, productivity measures are down over the long term. This is normal too during a declining business cycle. The reason is that business that are retooling and replacing equipment are putting more dollars into the input side of the productivity equation. That is also the reason for few pay raises since dollars are being used for other purposes. I agree that most economic indicators should make gains beginning around the middle of this year, as cycles are fairly predictable. Don't look for any significant pay or benefit raises until around January of next year. Your egghead economist was mistaken. Here is why. GDP is increasing because of increased numbers of outputs (most output unit increases going to support the military); but remember the inputs in terms of capital equipment investments have also increased. Increases in GDP are easily and often misinterpreted as productivity gains. Also consider this; when a plant or factory achieves equilibrium and is manufacturing their product at maximum productivity to meet their highest sustainable customer demand life is grand. Then if sudden greater demands are placed on the factory life begins to suck. This creates an immediate productivity decline, backlogs, shortages, increased market values, etc. And that is pretty much what happened to our industry when Afghanistan and Iraq broke out. Once the retooling is complete and the new level of customer demand is being met and market values are falling to normal levels productivity will begin to rise, then come job losses.