121. The Internet and the Productivity Speedup
June 22, 2009 § Leave a comment
Productivity increases when more is produced by the same number of workers or the same is produced by fewer workers (defined as output per manhour). hence productivity does not in anywat equal the productiveness of society. If we have los of output and no buyers, no productivity in any meaningful way. the rpoblem is, we are moving toa two tier society – wners and hourly workers. Part of the hrinkage of the economy I’ve been concerned about.
I do think it has to do with office workers and, in particular, middle management. I don’t think middle management actually interfered with production, but middle managers and affiliated secretaries and janitors and such count in the denominator of labor productivity. In the 90s there was a wave of downsizing and delayering. Basically top management in many firms decided to thin the ranks of middle management on the grounds that middle managers weren’t doing aything useful. The outcome says that the top managers were ruthless and right.