Tuesday, March 31, 2009
The previously stable measure of labour productivity went into relative decline in late 2007. Now productivity year on year is negative i.e. we make less stuff per worker. Alice Cook, the blogs author, interprets this as a consequence of fallling demand combined with delaying redundancies, which forces down productivity per worker as too many workers. As this pushes production costs up at a bad time the conclusion is that a large glop of unemployment is coming as companies face the inevitable.