5 ms·

The Sad Statistic That Trumps the Others

17 points by alecperkins 15y ago

jamesaguilar 15y ago
Weird that a decline in productivity is interpreted this way. During the recession, productivity increased substantially. The general interpretation I heard for this fact was that businesses were forced to cut roles with marginal productivity because they didn't have a whole lot of excess money and confidence about revenue was low. I heard this from a variety of news sources and economists and never heard another explanation, so I think it is probably the generally accepted explanation. I guess interpreting things pessimistically is good journalism, but if we're consistent I don't see why we would not apply the same rationale here. Businesses feel more confident about the future now, so they are resuming work that has lower marginal benefit, decreasing productivity relative to hourly wages. It seems a bit inconsistent to interpret both positive and negative changes in productivity pessimistically. I would expect one to be interpreted positively and one negatively, unless we are currently at some optimum amount of productivity and a change in either direction is bad. I can't think of a mechanism by which this would be the case, so I'm inclined to write off this article.
- forensic 15y ago
  How can you say that businesses are rehiring when unemployment is the highest since the great depression? Previously, jobs were being shed and productivity was rising. Now, jobs are still being shed and productivity is declining.
  - alexro 15y ago
    One explanation would be that people at work couldn't keep going on 60 hour week, so at some point decrease in productivity is unavoidable. That means the businesses will start recruiting to get back on track with 'normal' productivity.
  - hugh3 15y ago
    Not actually so. Unemployment has fallen from 10.1% to 9.2% since its peak in October 2009. Businesses aren't rehiring fast, but they are rehiring. Oh, and it's not the highest since the Great Depression either -- there was a spike to 10.8% in 1982. http://www.google.com/publicdata/explore?ds=z1ebjpgk2654c1_&ctype=l&strail=false&nselm=h&met_y=unemployment_rate&fdim_y=seasonality:S&scale_y=lin&ind_y=false&rdim=state&ifdim=state&tdim=true&tstart=-692553600000&tend=1311231600000&hl=en&dl=en&icfg&uniSize=0.035&iconSize=0.5 http://www.google.com/publicdata/explore?ds=z1ebjpgk2654c1_&... Isn't data wonderful?
    - forensic 15y ago
      The main reason unemployment stats look that way is because people give up looking for work and are no longer counted in the stats. Data is not wonderful when it is used to confuse and deceive rather than enlighten. Data becomes a tool of enslavement when a word like "unemployment" takes on an operational definition that does not reflect the public perception.
      - hugh3 15y ago
        Do you have any more reliable data that would contradict this data and support your own assertion that unemployment is actually increasing?
        bandushrew 15y ago
        Its a fact that the data you provided does not take into account 'participation' drop off. If you want to continue presenting statistics like that, maybe you should find a set of data that encompasses the more obvious problems?
        hugh3 15y ago
        I'm sorry, I had assumed that the onus of proof lay with the person making the original (and countrary-to-popular-belief-and-best-available-statistics) claim that unemployment was still increasing. Participation, of course, is a tricky beast. Sometimes people stop participating because they're despairing over being able to find a job, but they also retire, or get pregnant, or go back to university or (if immigrants) their home countries.
  - jamesaguilar 15y ago
    This graph from the Bureau of Labor Statistics refutes your premise. http://data.bls.gov/pdq/SurveyOutputServlet?request_action=wh&graph_name=LN_cpsbref3 http://data.bls.gov/pdq/SurveyOutputServlet?request_action=w...
    - forensic 15y ago
      What is sad is that people are going to see your post and think that unemployment is actually falling. When in reality, those statistics have been cooked. Those numbers don't include people who have given up looking, the underemployed, part-time workers, or even suicides. The Bureau of Labor Statistics is part of the problem. Their measurements are deceptive.
      - NY_Entrepreneur 15y ago
        There actually is a point about suicides and other problems: During the early 1980s when the Rust Belt was suffering, the rates of divorce, domestic violence, infant mortality, alcoholism, and suicide all went through the roof. Sadly I blame the UAW, for then and for what's happened to Detroit since, but it still happened. It was grim. Sadly, a UAW like solution solves some problems but creates some bigger ones including just killing off the whole industry it tried to 'organize'.
      - jamesaguilar 15y ago
        They also don't account for people who have reentered the job force and are keeping unemployment up. So that criticism swings both ways. At any rate, I suspect people on this board who are interested in economics are aware of the limitations of the BLS's measuring quirks. At any rate, all the actual data linked in this thread points to the view that unemployment is not at its peak since the great depression. Unless you post something credible to refute that, I'm going to assume that I was right about this point and that your hypothesis is unsupported.
NY_Entrepreneur 15y ago
Here's one of his first serious mistakes: "The United States spends more per capita on health care than any other country, yet without producing measurably superior results." That situation is always easy to obtain: Just do a sufficiently poor job at measuring the results. The tiny, short-term drop in the quantity he quotes says nothing, not even as much as zip, zilch, zero, about his claim of "trump" and lower productivity for the world. For such a claim, we'd need some data over a longer term and for much of the world and not just for the US. And we'd need more than the data: We'd also need some good candidate explanations. His article has no such and no references to any such. Instead, with so little data, some of the best data is striking and not in the article: Look at 'productivity', for the US and the world, in 'information technology'. E.g., it was not so long ago that 1 billion bytes of disk was in a box about the size of a large SUV and would really set you back, and now can get 1 billion bytes in main memory for about $5, retail. For just disk, about $100 will buy about 3 trillion bytes. It may be that of the 1 billion byte boxes, they never sold in total as many as 3000 for 3 trillion bytes. There was a time with reports that FedEx had, in total, 7 trillion bytes of disk. Now that's about $300 in a mid-tower case for about $100, actually, a whole computer with four processor cores for less than $1000. Did someone mention 'productivity'? Think about telephones: I well remember paying monthly telephone bills of well over $100. Not anymore! Think of mobile phones, useful in many trades, e.g., electricians and plumbers, nearly anyone who in their job spends a lot of time in a car: A mobile phone used to be just some radio in, say, a police car; then a mobile phone was about the size of a brick; then a mobile phone would fit in a shirt pocket; now a mobile phone is a quite capable computer, Web browser, video camera, movie player, electronic funds transfer device, etc. Think about tire life: It used to be that 10,000 miles was good tire life. Now can routinely get 80,000 miles. Better chemistry for better tires! Cars are safer with more air bags, body designs better in crashes, anti-lock brakes, stability control, various warning systems, etc. So, auto insurance rates should go down, and that's 'productivity'. Carbon brake disks are coming to cars, and the disks can be guaranteed for the life of the car. "Look, Ma: No more brake jobs!". Think about car engine life: With all the computer controls, get much less gas and water in the oil and, thus, get much longer engine life. Think about the changes in house building materials and tools: Now can put up a house for many fewer worker hours. And house insulation: Have much better insulated roofs, walls, doors, and windows, with much less air leakage, for much lower HVAC bills. Seen a cargo ship lately? They are HUGE, carrying oil, natural gas, or containers, with much better cost per ton-mile. Bandwidth should count: Kept track lately? Now can put several trillion bits per second on one wavelength, some dozens of wavelengths on one long-haul fiber, maybe 144 fibers in one cable, and several cables along a road, pipeline, high voltage electric line, river, coastline, etc. Remember the 'T-1 leased line' from Ma Bell? That was 1.5 million bits per second (Mbps) for over $1000 a month. Now for less than $60 a month I have 15 Mbps download speed and 2 Mbps upload speed. For another $65 a month I can get a static IP address, 101 Mbps download speed, and 15 Mbps upload speed. We're talking at least 10 times the data rate for about one tenth the cost for a 'productivity' increase of 100:1, before counting inflation. We were talking about 'productivity', right? Heck, now robots are cheap enough that even the Chinese are converting from manual assembly to robots. A guy had some chest pains. In the hospital they did an angiogram, found a clot in a coronary artery, sucked it out, and sent him home the same day. To get home he drove his own car. Did someone mention "productivity"? I still have a nice sack full of gorgeous Nikon camera equipment. But it uses just film. It's still okay, but now a digital sensor can have 48 million individual sensors, four for each pixel, that is, two for green and one for each of red and blue in a little square, giving 12 million pixels giving an array of 3000 by 4000 pixels. So, no film developing! Anyone mention 'productivity'? Maybe ask Kodak? Have a question about something, from how to get stains out of cloth to how to configure SQL Server, etc. Okay. Do a Google search and find blogs, fora, PDF files, etc. Or go to Wikipedia, Quora, or HN. Used to be had to drive to a library, maybe even a university library. Anyone mention 'productivity'? Ask the USPS about 'productivity': They have discovered that the Internet has replaced a significant fraction of their mail volume, so significant that they are in financial trouble and having to close some post offices. Work in some technical field with a lot of math, say, math, physics, engineering? Try to get the typing done? Hope you never had to do that; commonly the typing was more work than the technical work. Now with computers, Knuth's TeX, laser printers, and PDF, the typing is reasonable and routine. The productivity gains here are some factors of 10; for technical writing, we're talking another Gutenberg. Gotten a printed bank statement in the mail lately? I get my bank statements as PDF files over the Internet. 'Productivity' anyone? It used to be that a bank had to physically sort the checks and have someone visually read the check and manually key in the amount. Not anymore! Now at a retail site, the 'check' is mostly just nonsense, just my receipt, and the transaction is all electronic. The amount is keyed in at the cash register for the first and last time. 'Productivity'? anyone? My driveway is steep, and last winter I needed tire chains to get out but had no tire chains. But the Internet worked! So, I ordered some tire chains from Amazon, got them, put them on, and drove out! I didn't have to get towed out or drive to an auto parts store for the chains. We were talking about 'productivity'? Intel is now down to 14 nm line width (Atom processors), and has stated that they see their way clear to putting 1000 cores on a processor and having them work together effectively. We were talking about what, 'productivity'? Let's see: The key to productivity is automation. Now the key to automation is computer control. Computer control is based on computer hardware, which keeps falling rapidly in price, and computer software. The ability to develop software has increased enormously with progress in, e.g., Windows and .NET. We just now have the computers, disk storage, operating systems, middle-ware, languages, libraries, networks, and Web services for some astounding progress: We should be at the beginning of by a wide margin the greatest increase, in percentage and absolute terms, of productivity in all of history. Now what was it we were talking about, hmm, 'productivity'?
bugsy 15y ago
"Productivity has fallen" Yeah that appears to happen when you inflate the money supply yet continue to measure in productivity using cash paid in devalued funny money. Prices in funny money are inflating by over 30% a year right now so of course salaries have to go up to prevent the hapless workers from starving. Productivity is doing great though in terms of real money such as gold, where the cost of labor has dropped significantly. The article conveniently avoids discussing that and distorts other relevant information. For example, when they say "The United States spends more per capita on health care than any other country, yet without producing measurably superior results.", it is pretty misleading since it suggests results are comparable despite the high spending. It should instead read "while producing measurably inferior results compared to nearly all modern economies".
pessimizer 15y ago
I would guess that the sluggish productivity figures are a result of the sluggish capital expenditures during the recession.

17 points by alecperkins 15y ago

Weird that a decline in productivity is interpreted this way. During the recession, productivity increased substantially. The general interpretation I heard for this fact was that businesses were forced to cut roles with marginal productivity because they didn't have a whole lot of excess money and confidence about revenue was low. I heard this from a variety of news sources and economists and never heard another explanation, so I think it is probably the generally accepted explanation. I guess interpreting things pessimistically is good journalism, but if we're consistent I don't see why we would not apply the same rationale here. Businesses feel more confident about the future now, so they are resuming work that has lower marginal benefit, decreasing productivity relative to hourly wages. It seems a bit inconsistent to interpret both positive and negative changes in productivity pessimistically. I would expect one to be interpreted positively and one negatively, unless we are currently at some optimum amount of productivity and a change in either direction is bad. I can't think of a mechanism by which this would be the case, so I'm inclined to write off this article.

forensic 15y ago
How can you say that businesses are rehiring when unemployment is the highest since the great depression? Previously, jobs were being shed and productivity was rising. Now, jobs are still being shed and productivity is declining.
- alexro 15y ago
  One explanation would be that people at work couldn't keep going on 60 hour week, so at some point decrease in productivity is unavoidable. That means the businesses will start recruiting to get back on track with 'normal' productivity.
- hugh3 15y ago
  Not actually so. Unemployment has fallen from 10.1% to 9.2% since its peak in October 2009. Businesses aren't rehiring fast, but they are rehiring. Oh, and it's not the highest since the Great Depression either -- there was a spike to 10.8% in 1982. http://www.google.com/publicdata/explore?ds=z1ebjpgk2654c1_&ctype=l&strail=false&nselm=h&met_y=unemployment_rate&fdim_y=seasonality:S&scale_y=lin&ind_y=false&rdim=state&ifdim=state&tdim=true&tstart=-692553600000&tend=1311231600000&hl=en&dl=en&icfg&uniSize=0.035&iconSize=0.5 http://www.google.com/publicdata/explore?ds=z1ebjpgk2654c1_&... Isn't data wonderful?
  - forensic 15y ago
    The main reason unemployment stats look that way is because people give up looking for work and are no longer counted in the stats. Data is not wonderful when it is used to confuse and deceive rather than enlighten. Data becomes a tool of enslavement when a word like "unemployment" takes on an operational definition that does not reflect the public perception.
    - hugh3 15y ago
      Do you have any more reliable data that would contradict this data and support your own assertion that unemployment is actually increasing?
      - bandushrew 15y ago
        Its a fact that the data you provided does not take into account 'participation' drop off. If you want to continue presenting statistics like that, maybe you should find a set of data that encompasses the more obvious problems?
        hugh3 15y ago
        I'm sorry, I had assumed that the onus of proof lay with the person making the original (and countrary-to-popular-belief-and-best-available-statistics) claim that unemployment was still increasing. Participation, of course, is a tricky beast. Sometimes people stop participating because they're despairing over being able to find a job, but they also retire, or get pregnant, or go back to university or (if immigrants) their home countries.
- jamesaguilar 15y ago
  This graph from the Bureau of Labor Statistics refutes your premise. http://data.bls.gov/pdq/SurveyOutputServlet?request_action=wh&graph_name=LN_cpsbref3 http://data.bls.gov/pdq/SurveyOutputServlet?request_action=w...
  - forensic 15y ago
    What is sad is that people are going to see your post and think that unemployment is actually falling. When in reality, those statistics have been cooked. Those numbers don't include people who have given up looking, the underemployed, part-time workers, or even suicides. The Bureau of Labor Statistics is part of the problem. Their measurements are deceptive.
    - NY_Entrepreneur 15y ago
      There actually is a point about suicides and other problems: During the early 1980s when the Rust Belt was suffering, the rates of divorce, domestic violence, infant mortality, alcoholism, and suicide all went through the roof. Sadly I blame the UAW, for then and for what's happened to Detroit since, but it still happened. It was grim. Sadly, a UAW like solution solves some problems but creates some bigger ones including just killing off the whole industry it tried to 'organize'.
    - jamesaguilar 15y ago
      They also don't account for people who have reentered the job force and are keeping unemployment up. So that criticism swings both ways. At any rate, I suspect people on this board who are interested in economics are aware of the limitations of the BLS's measuring quirks. At any rate, all the actual data linked in this thread points to the view that unemployment is not at its peak since the great depression. Unless you post something credible to refute that, I'm going to assume that I was right about this point and that your hypothesis is unsupported.

NY_Entrepreneur 15y ago

Here's one of his first serious mistakes: "The United States spends more per capita on health care than any other country, yet without producing measurably superior results." That situation is always easy to obtain: Just do a sufficiently poor job at measuring the results. The tiny, short-term drop in the quantity he quotes says nothing, not even as much as zip, zilch, zero, about his claim of "trump" and lower productivity for the world. For such a claim, we'd need some data over a longer term and for much of the world and not just for the US. And we'd need more than the data: We'd also need some good candidate explanations. His article has no such and no references to any such. Instead, with so little data, some of the best data is striking and not in the article: Look at 'productivity', for the US and the world, in 'information technology'. E.g., it was not so long ago that 1 billion bytes of disk was in a box about the size of a large SUV and would really set you back, and now can get 1 billion bytes in main memory for about $5, retail. For just disk, about $100 will buy about 3 trillion bytes. It may be that of the 1 billion byte boxes, they never sold in total as many as 3000 for 3 trillion bytes. There was a time with reports that FedEx had, in total, 7 trillion bytes of disk. Now that's about $300 in a mid-tower case for about $100, actually, a whole computer with four processor cores for less than $1000. Did someone mention 'productivity'? Think about telephones: I well remember paying monthly telephone bills of well over $100. Not anymore! Think of mobile phones, useful in many trades, e.g., electricians and plumbers, nearly anyone who in their job spends a lot of time in a car: A mobile phone used to be just some radio in, say, a police car; then a mobile phone was about the size of a brick; then a mobile phone would fit in a shirt pocket; now a mobile phone is a quite capable computer, Web browser, video camera, movie player, electronic funds transfer device, etc. Think about tire life: It used to be that 10,000 miles was good tire life. Now can routinely get 80,000 miles. Better chemistry for better tires! Cars are safer with more air bags, body designs better in crashes, anti-lock brakes, stability control, various warning systems, etc. So, auto insurance rates should go down, and that's 'productivity'. Carbon brake disks are coming to cars, and the disks can be guaranteed for the life of the car. "Look, Ma: No more brake jobs!". Think about car engine life: With all the computer controls, get much less gas and water in the oil and, thus, get much longer engine life. Think about the changes in house building materials and tools: Now can put up a house for many fewer worker hours. And house insulation: Have much better insulated roofs, walls, doors, and windows, with much less air leakage, for much lower HVAC bills. Seen a cargo ship lately? They are HUGE, carrying oil, natural gas, or containers, with much better cost per ton-mile. Bandwidth should count: Kept track lately? Now can put several trillion bits per second on one wavelength, some dozens of wavelengths on one long-haul fiber, maybe 144 fibers in one cable, and several cables along a road, pipeline, high voltage electric line, river, coastline, etc. Remember the 'T-1 leased line' from Ma Bell? That was 1.5 million bits per second (Mbps) for over $1000 a month. Now for less than $60 a month I have 15 Mbps download speed and 2 Mbps upload speed. For another $65 a month I can get a static IP address, 101 Mbps download speed, and 15 Mbps upload speed. We're talking at least 10 times the data rate for about one tenth the cost for a 'productivity' increase of 100:1, before counting inflation. We were talking about 'productivity', right? Heck, now robots are cheap enough that even the Chinese are converting from manual assembly to robots. A guy had some chest pains. In the hospital they did an angiogram, found a clot in a coronary artery, sucked it out, and sent him home the same day. To get home he drove his own car. Did someone mention "productivity"? I still have a nice sack full of gorgeous Nikon camera equipment. But it uses just film. It's still okay, but now a digital sensor can have 48 million individual sensors, four for each pixel, that is, two for green and one for each of red and blue in a little square, giving 12 million pixels giving an array of 3000 by 4000 pixels. So, no film developing! Anyone mention 'productivity'? Maybe ask Kodak? Have a question about something, from how to get stains out of cloth to how to configure SQL Server, etc. Okay. Do a Google search and find blogs, fora, PDF files, etc. Or go to Wikipedia, Quora, or HN. Used to be had to drive to a library, maybe even a university library. Anyone mention 'productivity'? Ask the USPS about 'productivity': They have discovered that the Internet has replaced a significant fraction of their mail volume, so significant that they are in financial trouble and having to close some post offices. Work in some technical field with a lot of math, say, math, physics, engineering? Try to get the typing done? Hope you never had to do that; commonly the typing was more work than the technical work. Now with computers, Knuth's TeX, laser printers, and PDF, the typing is reasonable and routine. The productivity gains here are some factors of 10; for technical writing, we're talking another Gutenberg. Gotten a printed bank statement in the mail lately? I get my bank statements as PDF files over the Internet. 'Productivity' anyone? It used to be that a bank had to physically sort the checks and have someone visually read the check and manually key in the amount. Not anymore! Now at a retail site, the 'check' is mostly just nonsense, just my receipt, and the transaction is all electronic. The amount is keyed in at the cash register for the first and last time. 'Productivity'? anyone? My driveway is steep, and last winter I needed tire chains to get out but had no tire chains. But the Internet worked! So, I ordered some tire chains from Amazon, got them, put them on, and drove out! I didn't have to get towed out or drive to an auto parts store for the chains. We were talking about 'productivity'? Intel is now down to 14 nm line width (Atom processors), and has stated that they see their way clear to putting 1000 cores on a processor and having them work together effectively. We were talking about what, 'productivity'? Let's see: The key to productivity is automation. Now the key to automation is computer control. Computer control is based on computer hardware, which keeps falling rapidly in price, and computer software. The ability to develop software has increased enormously with progress in, e.g., Windows and .NET. We just now have the computers, disk storage, operating systems, middle-ware, languages, libraries, networks, and Web services for some astounding progress: We should be at the beginning of by a wide margin the greatest increase, in percentage and absolute terms, of productivity in all of history. Now what was it we were talking about, hmm, 'productivity'?

bugsy 15y ago

"Productivity has fallen" Yeah that appears to happen when you inflate the money supply yet continue to measure in productivity using cash paid in devalued funny money. Prices in funny money are inflating by over 30% a year right now so of course salaries have to go up to prevent the hapless workers from starving. Productivity is doing great though in terms of real money such as gold, where the cost of labor has dropped significantly. The article conveniently avoids discussing that and distorts other relevant information. For example, when they say "The United States spends more per capita on health care than any other country, yet without producing measurably superior results.", it is pretty misleading since it suggests results are comparable despite the high spending. It should instead read "while producing measurably inferior results compared to nearly all modern economies".

pessimizer 15y ago

I would guess that the sluggish productivity figures are a result of the sluggish capital expenditures during the recession.