The news this morning was miserable -- and embarrassing. Long assured by the politicians that we have the smartest, best, most efficient workers in the world, Americans were stunned to learn this morning that we're less efficient than we thought.
In fact, we're 0.9% less efficient, according to the Bureau of Labor Statistics:
But while that's probably bad news for employers, and less than welcome news for some investors, I happen to think it's good news for workers -- and potentially, pretty good news for a lot of investors as well.
A taste o' the lash will make you work!
Investors generally view productivity -- producing more "output" of goods and services with fewer hours worked -- as a great good. Efficient workers make for cheap products, low inflation, and happy investors in companies that control costs and maximize profits. As the Great Recession began to bite, companies across the economy touted their "cost-cutting" prowess as a reason to invest in them.
Go-go growth icon Starbucks
Result: Improved efficiency. Better productivity. And 9.5% national unemployment.
The Great American rethink
Productivity may be "a good thing," but you can have too much of it. Lay off one worker, ask another to do the work of two employees, and yes, you might cut costs and improve profits. But there's only so much profit you can squeeze from a turnip-shaped American. Eventually, the workers just plain collapse. Eventually, you must hire more employees.
That's why I, for one, see this morning's decline in productivity as a good thing. If companies have hit the point of diminishing returns on their cost-cutting, they're going to have to begin hiring again, mailing out paychecks and putting dollars in consumers' hands.
Logically, this should increase consumption, ending the retail drought that has Wal-Mart, Target, American Eagle
Two cheers for "laziness"
Lower productivity may not be unqualifiedly good news, but by my count, that's at least two big cheers for it.
Got a contrary opinion? Share it in the comments box below.