American worker productivity is declining at the fastest rate in 75 years
fortune.com
fortune.com
(1) https://vm.tiktok.com/ZMYEGwwSD/ (2) https://finance.yahoo.com/news/uk-lender-set-offer-50-173000...
If you check in with this terrible publication from time to time you will just see anti-worker articles sprinkled in. This site is more propaganda than news.
Example: https://fortune.com/2023/05/05/openai-ceo-sam-altman-remote-...
I mean the culprit must be WFH, right? Not supply chain disruptions, closures, restrictions, actual sicknesses and bereavements, cost increases and accelerated inequality due to financial turbulence/bailouts, etc, etc.
If you ask me, tech, at least, is more productive without constant office-space type interruptions and harassment etc.
The constant downpressure on paying labor is now at the "quiet revolt" level.
The good news: if companies hate WFH, then why would they like outsourcing? It's basically the same problem, except with 3000 miles and 12 hour timeshifts and a language barrier.
I had similar argument with my previous employer, it was simply about “culture” and “team work dynamics” and other BS, ironically, when most of management team was allowed wfh but denied for software/engineering team
... 3-5x less expensive.
I automated most jobs that I was told to send there. Since due to the quality issues only the busy jobs were sent there that are faster to automate and higher quality, too.
After a few months my boss came to me and told me I need to use the outsourced staff more, since they have nothing to do.
I'm a business owner, and we do extensive outsourcing, with a very good outcome. The trick? We outsource from our home region (where I emigrated from), so we know the market better and how to hire well.
Haha - I can't believe I've not seen this mentioned anywhere before. This is hilarious.
The article said this:
> U.S. productivity plunged 2.7% in the first quarter of this year compared to last year, EY found.
Most of that doesn't really apply in 2023Q1. Even SVB hit late in Q1. You could argue that the stability in Q1 should have improved productivity.
Also:
> U.S. productivity plunged 2.7% in the first quarter of this year compared to last year, EY found. That’s a 0.9% year-over-year drop. Concurrently, quarter-over-quarter output grew slightly (0.2%), and hours worked grew 3%. That means people are working longer hours and barely putting out more products, because they just aren’t as productive as they used to be.
Is 0.9% significant enough to not be a rounding error (especially considering "productivity" is a very broad measurement). I want to hear devil's advocate for how this shows anything.
The rest of the article is speculation from a chief economist and 2 CEOs that this is caused by WFH and increased job-hopping.
You would think these people would be educated enough to know how supply and demand actually works, and how if inflation goes up, you are paying your workers less. Completely disingenuous.
You get what you pay for, and arbitrarily abusing your staff by changing the metric goalposts every few months to justify churn to pound pennies breaks trust, as much if not more than making them RTO during the pandemic, risking their lives on a job role that can be done completely remotely because you believe workers work best in the office when you really just want to justify the outlays you're stuck with having an office.
I know people who died because of that.
You can think of it as company revenue per hour worked.
This is a standard definition: https://www.bls.gov/k12/productivity-101/content/what-is-pro...
I don't know that it's a very useful metric for businesses that are capital intensive. For example, say you automate your factory and have only one employee left, who is in charge of turning the machines off each day. That person's labor productivity would be off the chart, but it's not because they've become more 'productive' in the regular sense of the word.
But how do you measure worker output? Even “units produced” can be altered by higher-level strategy (e.g. less efficient production). And some aspects software development don’t have units produced at all, like how much “progress” someone makes on an app (LOC doesn’t count)
The definition says “output per hour worked”
But how do you measure worker output?
Imagine an economy in which everything has been automated, and everyone is unemployed and living on welfare, except the one guy to turn the machines on and off. He is paid $100k for a not-very-demanding job.
Now you calculate labor productivity, and it's a gazillion dollars per labor hour, the highest it's ever been. At the same time the (ex-)workers are as unproductive as they have ever been, because their skills are no longer applicable to any useful activity.
Consider the times in your career when you were most productive (in the everyday sense of the word). Do those coincide with the times when you worked at a company that high the highest profit per employee-hour? Maybe, maybe not.
A) how efficient individual people are at doing their jobs, and
B) how much progress we have made replacing people with software and machines.
(A) aligns with people's everyday understanding of the word 'productivity', but (B) has a larger influence on changes in the measure.
It's measured the same as any other quantity with political implications: However the author of the article in question wants it to be measured.
The decline in productivity can be attributed to a broader decrease in workplace morale in most American corps, for many obvious reasons. Contrarily, I have not come across stories of productivity issues in smaller organizations with effective management and engaged employees.
We are on the verge of a significant labor transition from poorly managed mega corporations to companies that prioritize employee well-being, trust-based management, and shared goals. Many of the top performers from big tech are already either founding these better companies or joining them, conceding to lower salaries and benefits to get some of their work satisfaction and morale back. Eliminating a valued employment benefit like remote work will only alienate more employees and hasten the shift.
In other words, if your Glassdoor ratings are below 65%, it's not work from home, it's that a large proportion of your employees hate working for you. And you need carrots, not sticks, to improve morale. I cannot believe this even needs to be said.
These are neither sufficient nor necessary. There are (and will be) companies that succeed without prioritizing one or more of these. And there are (and will be) companies that prioritize all three and yet fail.
Are you using 'productivity' in that same sense?
High GVA businesses in competitive markets might experience low margins, limited growth potential, and significant annual losses. Companies in commodity sectors like oil or precious metals may have large cash flows but low margins and profits. Additionally, GVA can be influenced by expenditures, such as R&D costs, which might not yield returns. Highly leveraged and indebted businesses can also have inflated GVA due to higher cash flows. Moreover, a profitable company with high GVA can face external challenges, such as legal or regulatory issues, affecting its success in the medium or short term.
Nevertheless, strong employee morale and engagement will contribute to increased productivity or GVA in all cases I can think of. The problem with WFH in the pandemic is that the pandemic was a confounding factor that influenced WFH rates, but also mismanagement and morale itself.
Yes, I would use gross value added to define productivity.
Is that right?
Not at all. It is desirable for many people, not all, but it is not just a benefit.
It's a different way of working. For some kinds of work, it's a better way of working.
Nonetheless, some might point out that in the United States, medical insurance is considered essential to employment, yet it is frequently presented as a benefit. The definition of an employment benefit is pretty loose.
But I understand your sentiment — this could become (or perhaps you already see it becoming) larger than a typical employment benefit.
Working remotely is simply a more effective way to work in some cases.
(I have struggled to temper my idealism with the increased cynicism that life/work experience has given me. In some of my positions, I have had sufficient authority and trust to create pockets of sincere idealism, but eventually friction with the system was my undoing. (Sorry, I'm having trouble articulating clearly.) This seems to have worsened over the years and I'm wondering if this perception is entirely from my sluggishness in shedding my naivete or if there is also a component that's the reality shifting.)
Your thoughts about tempering idealism, running up against 'the system', etc feel familiar to me and I could even relate it to a painful scenario I found myself in 2 jobs ago. I don't think the origin of that idealism is coincidental, and if it were, it is still certainly exploited. It's not difficult to see how cynicism might result from the realisation that your idealism is at best convenient for your employer; that doing The Right Thing TM is only tenable when it aligns with the goals of the employer. At worst, it's just handwaved away with "this is what the business needs". And how can you argue with that? (Nearly all) businesses exist to profit and arguing for intangible Right Things TM against cold hard dollars is tough, sometimes hopeless.
Regarding your mention of how things have worsened over the years: I speculate that the pandemic itself, the resulting WFH, the looming recession and current layoffs, and (for some folk) the CoL situation have created conditions where the corporate world is struggling to maintain the facade that working life is great and a good job is the path to happiness. There are definitely folk out there working hard to attribute blame and "worker productivity" gives us a clue who.
Semi related edit: I have been reading [1] and though I find the switching between labour movement history and anecdotes from today's workers kind of painful, there's been some interesting bits. Possibly worth checking out the reviews and reading only the first half as many have said is the better part.
(For me personally, part of my challenge is that I want the ideal. I'd like to be loyal and committed to my employer (and I've tried to select employers that make this more possible, such as smaller and privately held companies at which I hopefully report to the CEO) and to have that not be foolish.
I have trouble truly accepting the reality of human nature, including within myself. From the perspective of "traditional" measures of success, I'm certain that I've hamstrung myself. But I'm unsure I could have done differently; my awareness of my naivete seems insufficient for changing my behavior much. It's as if I cannot endure reality and have to pretend I live in an alternative universe. (Not because I'm so admirably committed to such high ideals, but because I am too weak and afraid to endure the guilt and shame of intentionally failing to meet the standards to which I strive.)
Anyway... thanks again for the response. :) )
Most employers do not accommodate disabilities and actively discriminate against those who have them. I will never work in an office again because of the positives that working from home has resulted for me.
So just hearsay it is remote work. No evidence.
Well, not.
It is not impossible that, all other things unchanged, WFH would have a negative impact on productivity. That is because for WFH to work, many other things need to change. To illustrate this with a stupidly simple example — if you ask your employees to work from home but don't give them access to company resources from home, the productivity is going to tank. This extends to a hundred other things that need to be adjusted for WFH. You must necessarily manage the company in a way that supports WFH to empower WFH employees to succeed. But plenty of studies show that tremendous increases in productivity are possible, they have been de-facto achieved in companies that managed WFH right.
IMO there are a still a ton of benefits outside productivity such as life satisfaction, housing costs and maybe this can cure the fertility decline that make it worth the productivity decline.
From our daily experiences in the tech industry, most people would likely observe that WFH has not led to a decrease in productivity. Instead, factors such as low morale have had a much more significant impact. Issues like layoffs, employee turnover, wages not keeping pace with living costs, mismanagement, a global pandemic, economic uncertainty, lack of prospects for homeownership and family-building, and generally declining life satisfaction weigh more heavily on work engagement than the WFH arrangement.
In fact, remote work is often viewed as a perk and is optional—many companies that offer WFH still maintain offices that employees can choose to work from, but few opt to do so. This means that the perk is desired and has a positive effect on morale.
In terms of direct counters to the notion that WFH inherently reduces productivity, consider the following sources:
- https://www.apollotechnical.com/working-from-home-productivi...
- https://timeular.com/blog/remote-working-affects-productivit...
- https://www.business.com/employees/remote-work-productivity/
- https://www.psychologytoday.com/intl/blog/intentional-insigh...
- https://blogs.lse.ac.uk/businessreview/2021/09/29/remote-wor...
While these sources provide counterarguments, the broader sentiment seems to be that a lack of trust in employees and mismanagement in WFH environments can hinder productivity, but properly managing remote work can actually enhance it. WFH in itself appears to be a poor predictor of productivity changes within a company when such a policy is implemented. The correlation is weak, with the noise of poorly managed companies struggling with remote work drowning out the success stories of well-managed companies that achieve higher worker effectiveness in a WFH environment.
It shouldn't be funny that people feel protective about the benefit that increases their work satisfaction, morale, and in many cases, productiveness. And if a company fails to implement WFH properly, then I'm sure it's not too difficult to imagine how it would go poorly. But this is c-suites not doing their jobs properly, not employees who struggle to keep morale high as is.
That pressure isn’t being exerted on us by senior management. Today’s fundraising environment is brutal. LLMs and Copilot mean future devs have the tools to out-code and out-produce us. If we don’t adapt, we’ll fall behind.
I expect the future of software engineers requires embracing new tools to increase both code quality and quantity. And if I can adapt and help others, our productivity will either be the advantage we need in a more competitive environment or the table stakes to avoid the next 6 rounds of layoffs. Either way, our productivity is on the rise.