Do Less & Earn More: Declining American Productivity

Do Less & Earn More: Declining American Productivity

Or at least, that's what a quick look at recent productivity numbers might make you think. Q1 productivity dropped for American workers while wages actually increased – workers are getting paid more to get less done. Is it laziness though? As tempting as the assertion might be, there's a lot more to explain recent decreases in productivity. Yes, there's an incredibly tight labor environment. With unemployment near all time lows and multiple job openings for every person looking for work it definitely seems like workers have all the leverage. They can take it easy on the job and know they won't get fired, and even if they do, who cares? There's a position open for them across the street. This comfort factor is definitely part of the productivity narrative, but it's not the only driver. There's more to the story if we really want to understand the productivity and wage situation in the United States. Perhaps the most obvious driver of variance in productivity is Covid-19. While hospital counts have remained low and acute cases are less of a concern than they have been in the past, the new Omicron based strains are more infectious and spread faster. And more