Newly released figures of the Department of Labor show that productivity has sharply increased in the second quarter of 2009 but employers' labor costs have plummeted. To analyze these numbers, The Real News spoke to Richard D. Wolff, economist at the New School in New York City, who speaks on whether these numbers are good for workers.
BioRichard D. Wolff is an Economist, Author, and Professor Emeritus of Economics at the University of Massachusetts, Amherst and New School University. He has also been a visiting professor at the University of Paris I (Sorbonne). He has authored or co-authored 10 books including The Economics of Colonialism, Bringing It All Back Home: Class, Gender and Power in the Modern Household, and Rethinking Marxism. His recent work has concentrated on analyzing the causes and alternative solutions to the current global economic crisis.
Comments from Registered Members | (Register or log in to make your comment.) | Stendhal 2009-08-20
R.W. is clearly a marxist; and rightly so. On the subject of sleight of hand surplus value, but digressing slightly, the british gov. policy to alleviate unemlpoyment is to subsidise private firms' labour costs; among the schemes, those unemployed for 6 months or more can offer prospective employers the opportunity of full subsidy for part-time employment in low-paid, unskilled work. At the same time the state wages a phoney war against so-called benefit fraudsters, ably assisted by corporate media. Meanwhile, the 'news' is a vehicle for the privileged to dissemble about their egalitarian sentiments and respect for human rights, and one can hear sorrow expressed for only 'our' casualties, always virtuous. At present unsubtle propaganda seems to me increasing. | bru_tiss 2009-08-16
Naserke, what you are talking about is the eternal struggle: the one between the employees who always want more from the employer, and the employer who always wants to pay less to the employees. The outcome will be different for each company, but each side has to weigh the potential reward versus the risk. In an ideal world, the employees would share in both the ups and downs of the company. | dart 2009-08-15
The US economy can only decline.The only growth sectors are offense industries but they are part of domestic expenditure thus adding to budget deficit.The `recovery` will need another bubble but debt to GDP ratio, public and private, is maxed out.US businessese will export more jobs to improve profits.Productivity (as in the clip) is a function of falling wages and wage expectations and can improve even as output falls.Labour pricing power was greatly diminished by Nixon,Reagan and Bush./US govt works for business especially banks and not the people.The US is marching toward fascism and how many US citzens know of the attempted 1933 pro-fascist coup against FDR?(The neo-cons have already outlined ideas for perpetual war- Hitler would have approved!).Plus ca change. | dart 2009-08-15
So it`s goodbye to well paid middle class manufacturing jobs and hello serfdom.With falling investment and lower education rates this process will not reverse.Meanwhile investors are piling into equities driven in part by non existant returns on cash and property.Low wage costs are puffing corporations` bottom line numbers while revenues -top line figures- barely move.The stock market bubble,dubbed Bernank`s Market,will burst leading to a stampede into bonds/cash in turn supporting the USD and exposing a good many suckers.More downward pressure on wages will follow leading to more productivity gains?Obama will have performed his contract to his banking employers but a major war may take off requiring conscription-rather late in the Konratieff Winter cycle but just what Rand ordered.You lucky people! | Naserke 2009-08-15
@ bru_tiss
There was a story in Real News few weeks ago about workers of Brazilian Mining Giant Vale who runs Nickel mining in Sudbury Canada. Workers had the kind of relaionship you are talking about with the previous company. That wages will go down in downturn and go up in time of growth. Since the Vale took over, management is pressing worker to take permanent wage cuts which won't go up even when there is growth. I think worker would accept such offer of connecting there wages with productivity, but would all businessmen would accept this.
Another way is what my company did in Ontario.. They asked workers to work for 4 days a week. ie. 20% cut for everyone and no one looses job. | bru_tiss 2009-08-15
Dan the Man, thank you for providing me with my laugh for the day. No, I'm not a business owner, but I was a worker bee for the 40 years I worked before I retired 3 years ago. I always worked for someone else, and I always knew that the owner of the company was making a profit on me, but I didn't care. I was able to make enough money to live on off him, and I always had the option of starting my own business. Without him, I couldn't have made enough money to feed my family. It was a symbiotic relationship. | Afrothetics 2009-08-14
Can you wrap your mind around the concept of "wage slavery," a description of labor coined by the pro-slavery senator from South Carolina, John C. Calhoun, more than 150 years ago to describe workers in northern industrial factories. George Bush described his great plan as the "ownership society." By this he meant, not that Americans would own anything themselves, but that they would be owned. Today, 70+ percent of Americans have zero net worth or less. That's a legacy from a nation founded not on equality, but inequality. At the adoption of the Constitution fully two-thirds of residents in the 13 states were not free. More are less free today, and have less intelligence about their condition. | jeanpaulrenoir 2009-08-14
What are corporations supposed to do? Remain inefficient... US corporations have to compete with the rest of the world, after the economy recovers they will hire again!
This is nearly Marxist rethoric...does not help problem solving... | dan the man 2009-08-14
bru_tiss, You must be a rich ass bussiness owner.
I've been a laborer all my life, My last job, which I was laid off from 18 months ago, only paid me $2 whole dollars an hour more than the wage I made 24 years ago at my first job out of high school! How the Fuck do you justify that rich boy?!
We the people that do all the work are sick and fucking tired of rich ass greedy bastards like you!
You fuckers take all the profits and give nothing in return for hard work and loyalty. You don't get dirty, you don't get injured, you don't even break a sweat! Yet you TAKE TAKE and TAKE all the profits of OUR labor and keep it for your greedy selves.
Just how much longer do you think we are going to keep puting up with your shit? When we are done with you fuckers the world will be "Rich Greedy Bastard FREE!!!" | bru_tiss 2009-08-14
If wages should go up when productivity goes up, does that mean that workers' should take pay cuts when productivity goes down? Mr. Wolff didn't seem to comment on this, for some reason. | sshenfield 2009-08-14
I don't understand how this can generate even a partial and temporary recovery. To realize their profits the employers have to sell this output. If it's luxury goods they can sell them, but otherwise? Are they going to sell it to the workers they have laid off? To those whose real wages they have cut? They surely won't be able to sell it abroad. |
JESSE FREESTON, PRODUCER, TRNN: As talk of economic recovery picks up in the United States, figures released this week from the US Department of Labor have shed light on what such recovery might mean. Over the months of April, May, and June, worker productivity rose 6.4 percent, while unit labor costs—the amount of pay and benefits workers receive per unit of their output—dropped by 5.8 percent. The Real News spoke to Richard Wolff, professor of economics at the New School, about the meaning of the numbers. RICHARD WOLFF, ECONOMIST, THE NEW SCHOOL: The recently announced productivity numbers say something very profound about what is going on here in the United States. Basically, the job of the productivity numbers is to measure the total amount of goods and services that result from an average worker's hour of his or her labor. Now, obviously, when a worker produces more goods and services per hour of his or her work, that means there are more goods and services available for that worker's employer to sell, and that employer then enjoys higher revenue. So then the question becomes: clearly the employer is better off; is the worker better off? If the worker were paid 6.2 percent more in wages at the same time that the employer has 6.2 percent more of output, then the gain to the employer would be matched by the gain to the worker, allowing the worker to share in the fruits of his improved productivity. But over the last period, what was striking about the statistics is that workers' wages went up by about one half of 1 percent, whereas what they produced for their employer went up by over 6 percent. That is a stunning difference. It means that the overwhelming bulk of the increased productivity of the workers in America went to their employers, and only a tiny proportion went to them. Here we are in the depths of the worst economic downturn since the Great Depression of the 1930s, and the way in which this economy is coping is to widen the gap between the employers and employees. The long period of time, roughly 30 years, during which the gap was already growing, not only is that not being reversed in this crash, but it is actually being made worse. Employers are economizing on workers, laying them off, making the workers who remain work that much harder, because they have to do the work that used to be done by the other employees that were fired. The best guess of the economics profession as to why productivity rose so much is precisely that, that massive layoffs meant that employers had terrified workers, who would, in order to hold on to their jobs, work longer, work harder, work faster, and thereby produce so impressive a rise in productivity.FREESTON: Many economists are suggesting that any so-called recovery that doesn't include increases in employment and wages doesn't address the fundamental causes of the crisis and will only lead to a deepened recession in the near future. |
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