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The Great Productivity Puzzle

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Re: The Great Productivity Puzzle

#51

Post by Spooky23 »

Animats wrote: post #14

Something that's puzzled me for a while: why haven't we hit "peak office" yet? Why are there still so many people working in offices? By now, we should have many abandoned office blocks, much as we have abandoned factories in the Rust Belt. But that's not happening. We have all this office automation, but too many people in offices. Are marketing cost and G&A (general and administrative) increasing as a fraction of c…

A: It's more productive, and easier to supervise employees.

75% of knowledge worker telecommuters that I've run across who aren't doing tracked tasks are doing very little.

We do have a lot of empty office blocks, especially in midsized cities. Even in NYC, there are plenty of mid rise buildings that are minimally occupied, as automation ate up the armies of clerks who once inhabited them.

Re: The Great Productivity Puzzle

#52

Post by TeMPOraL »

TheOtherHobbes wrote: post #33
dragonwriter wrote: post #17

Earlier quoted context omitted.

> Take Linux + Apache, for example. I can create a business for very little money because those are available to me for free. And if you do, that business shows up in the GDP.

And if you don't turn it into a business, it doesn't, even though a lot of people may find your hobby project interesting/useful. What's the commercial value of a free live streaming app that captures evidence of a (say, for the sake of argument) a police assault, which eventually leads to a riot? GDP is like a summary of all relevant execution paths through code. But it's really a list of paths that are considered r…

Indeed, and the problem here is that GDP gives you a nice-looking metric to drive your thinking. Except that the conclusions and strategies you make based on that number will be only as good as the limits of meaning of that number[0]. It's a proxy for some aspects of economic activity, and yet it seems to be treated by many as country's "hit points".

[0] - a thing that nicely differentiates those who understand math fundamentals from those who don't - realizing that all theorems have a set of assumptions behind them, and are not valid outside that assumptions

Re: The Great Productivity Puzzle

#53

Post by georganos »

joeyo wrote: post #47

. If Gordon is right, sagging productivity figures simply reflect . the fact that scientific progress doesn’t have as much impact on . the economy as it once did. Rather than waiting for productivity . growth and wages to rebound of their own accord, Gordon supports . policies designed to expand the size and quality of the labor . force, such as raising the retirement age, letting more . immigrants into the country,…

I read that as in increasing the number of highly qualified immigrants, thus increasing the quality of the workforce.

Re: The Great Productivity Puzzle

#54

Post by TeMPOraL »

guelo wrote: post #8

Yes, things like Google Search must be increasing productivity. But at the same time the amount of time dedicated to infotech entertainment addiction is going through the roof. I wonder how much productivity the hours of Facebooking at work is costing us.

Forgetting for a while the non-linear costs of distraction in cognitively intensive jobs, I wonder if Facebooking at work is really costing us anything at all? I'm having a hard time imagining that office workers of 20+ years ago were that more job-focused than they're now.

But then again, the problem may be Internet in general - I can't imagine people being able to do so many non-work errands while in the office if it weren't for e-mail in particular.

Re: The Great Productivity Puzzle

#55

Post by vasilipupkin »

joeyo wrote: post #47

. If Gordon is right, sagging productivity figures simply reflect . the fact that scientific progress doesn’t have as much impact on . the economy as it once did. Rather than waiting for productivity . growth and wages to rebound of their own accord, Gordon supports . policies designed to expand the size and quality of the labor . force, such as raising the retirement age, letting more . immigrants into the country,…

1) more people means more demand for stuff, means more incentive to produce stuff, more competition to sell them stuff and higher economic growth 2) if people want to come here, it's because they think they are not being as productive as they could be where they are now.

Re: The Great Productivity Puzzle

#56

Post by vasilipupkin »

TheOtherHobbes wrote: post #27
thedevil wrote: post #19

Earlier quoted context omitted.

Sunshine and rainbows aren't produced by the economy. Google searches are, even though they are free. If we're talking about how good the economy is, I'd argue that we should count all the good (and bad) that the economy is doing, not just the GDP.

Google searches are in no way free. Businesses pay for them in ad spend. Governments pay for them in lost tax revenue and opportunity costs lost through decisions influenced by Google's lobbying. These are indirect costs, but they still have an overall economic effect. You could argue - perhaps with some justification - that the net value generated by Google search is more than the net economic costs. That would be a…

Which is why what we really care about is changes in GDP not levels of GDP

Re: The Great Productivity Puzzle

#57

Post by TeMPOraL »

Animats wrote: post #14

Something that's puzzled me for a while: why haven't we hit "peak office" yet? Why are there still so many people working in offices? By now, we should have many abandoned office blocks, much as we have abandoned factories in the Rust Belt. But that's not happening. We have all this office automation, but too many people in offices. Are marketing cost and G&A (general and administrative) increasing as a fraction of c…

> Are marketing cost and G&A (general and administrative) increasing as a fraction of cost of goods/services sold? Perhaps it's the overhead of capitalism.

Marketing has a special feature - in a competitive market, it becomes a zero-sum game. You're putting an ever-increasing amount of money into it, but getting only marginal gains out of it. It's a coordination problem. As the industry grows, you end up with chains - ad companies selling tools and services to other ad companies, that bundle those tools and sell services to other companies, which sell their services to companies that use those services to offset each other's use of those services... I think that's why the ad industry is growing so much. There's a lot of space for bullshit jobs there. One would say, almost unlimited.

Re: The Great Productivity Puzzle

#59

Post by TeMPOraL »

chrismcb wrote: post #44
Animats wrote: post #14

Something that's puzzled me for a while: why haven't we hit "peak office" yet? Why are there still so many people working in offices? By now, we should have many abandoned office blocks, much as we have abandoned factories in the Rust Belt. But that's not happening. We have all this office automation, but too many people in offices. Are marketing cost and G&A (general and administrative) increasing as a fraction of c…

Meetings. People love meetings. It is much easier to have face to face meetings if you are in the same area. Of course the meetings are mostly pointless, but people still love to have them. Even in an environment where you can do 90 - 100 percent is your work remotely they still insist on you coming into an office. Even though slack or Skype can handle most meetings.

s/people/management. As someone whose job is to produce things, I absolutely hate meetings. And probably so does most of people here on HN.

Re: The Great Productivity Puzzle

#60

Post by hristov »

The reason for this is deflation. Deflation in our economy is massive and far under-reported. Deflation is especially great in areas where productivity is rising.

The way economists measure productivity is by the monetary value of the thing produced. Thus, productivity gets tied in with inflation and deflation. Suppose you make widgets, and can make 10 of them per hour. Suppose you sell each of them for $10 bucks. Now suppose inflation hits and the price of the same widgets is all of a sudden $20 per hour. You still only make 10 widgets per hour. But all of a sudden you are twice as productive according to the way the government and economists measure productivity.

The opposite happens when deflation occurs. If your widgets all of a sudden start selling for $5 per hour instead of $10, you will be considered by the official economic analysis to be twice as lazy even if you work just as hard and make just as many widgets per hour.

And there you have your problem. Deflation is hitting everything, but it is hitting industries that benefit from productivity of new technology the hardest. Take a serer cpu made today that can perform 100 times as much work as a server cpu made about 10-15 years ago. Is intel considered a hundred times more productive when they make this cpu that does 100 times more work? Of course not. Their productivity is based on how much the cpu sells for and since per cpu prices have held stable to slightly decreasing over that time, intel's productivity for that particular cpu is deemed to have decreased as well.

Or take pictures. Twenty to thirty years ago there were probably over a hundred thousand people working in photo development shops making pictures for people. Now about a 100-200 programmers (estimated) among Google, Apple, Facebook and yahoo probably provide the vast majority of picture viewing services in America. Is that a great increase of productivity? It should be, because a hundred people are doing the same stuff a hundred thousand were doing twenty years ago. But officially it isn't because picture viewing is considered to be free, so no revenue is assigned to it.

So productivity growth is happening, but unfortunately it is accompanied by large drops in pricing, which make the official measure of productivity look bad.

Why are prices dropping? This has to do with something journalists do not like to talk about -- wage stagnation, income inequality, etc.

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