American workers didn’t get much more productive last year. This year could be different.
The Labor Department on Thursday reported that productivity, as measured by how much the average worker produces in a typical hour, grew at a 6.6% annual rate in the fourth quarter from the previous quarter. A big gain, but one that came on top of a substantial 5% decline in the third quarter. For the whole of 2021, productivity rose 1.9%. That was less than 2020’s 2.4% productivity gain, and less than the 2% logged in the pre-pandemic year of 2019.
The thing is, the U.S. could really use a productivity boost right now. The more a worker can produce in an hour, the lower the labor costs for production go. When productivity growth is high, businesses can sell more, pay workers more and increase profits while leaving prices unchanged. At a time…
