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It's the total production cost owing to labor. So, if a company has a thousand workers making $500 million in goods per month, they're getting $500k in goods per worker.
If it then lays off a hundred, and produces $470 million in goods and services for the month, they would have a productivity of $522k per worker. So, productivity would be said to rise by 4.44%.
That's how traditional economists and analysts look at it. I come from a different school of caustive economics that indexes that value to the total value of goods and services, corrected for the change in market value. So, in the example i described, the productivity drop in absolute terms is 6%, while the traditional view says it goes up 4.44%.
If you divide the former by the later, you get a value <1. Real productivity gains are achieved only when that number rises to >1.
There are lots of modeling issues i have with the bought and paid for economists who are proclaiming a lot of this nonsense as good news.
The real fact is that the economy is roiling because the government has spent 90 billion dollars in special appropriations money since August. That's 9% of GDP in 4 months. Of course, we're going to see GDP growth. But, it's ALL BORROWED MONEY.
The other factors being trumpeted by the press are immaterial. It's not sustainable because the productivity gains, in the absolute, are non-existent, and the source of increased monetary velocity is governmental borrowing.
So, you're right about the productivity. The people reporting it are the ones who have gotten it wrong. The Professor
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