|Man Without Qualities|
Saturday, August 09, 2003
The recovery may be largely "jobless" so far, but that aspect has provided significant employment for some mighty clever people, including Bruce Bartlett and Arnold Kling and the Federal Reserve Bank of Richmond and the Federal Reserve Bank of San Francisco and Steve Antler (from whom all these link were obtained).
Mr. Bartlett points out that productivity recently and now continuously obtained through new technology (as distinguished from productivity obtained from workers woking harder) has had a substantial effect on employers' short-term demand for new employees as the economy has emerged from its the recent doldrums:
The higher productivity going in [to the recent recession] meant that fewer workers were needed coming out of the recession. Now, in the current recession, which ended in the fourth quarter of 2001, we have seen even higher productivity on either side. The latest data show an increase in productivity of 4 percent in the six quarters before and 6.5 percent in the six quarters after. That is why employment growth and hiring levels remain weak. Employers are raising output without adding much new labor. It is important to remember that this is a short-run phenomenon. In the long run, higher productivity increases employment, a fact documented in two new studies from the Federal Reserve Bank of Richmond and the Federal Reserve Bank of San Francisco. But in the meantime, employment growth may still be slow for a couple more months.
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