Monday, July 01, 2013

The Myth of American Productivity is a Ruse

"Americans are the most productive workers in the world", is a common refrain from elected leaders. Those words just make us feel so good. But do the statistics back it up?

We don't know. At least that's what Michael Mandel said in the Washington Monthly. He makes the following points:

  • The US government doesn't track import price bias in productivity data and fails to take into account imported goods and parts in productivity numbers.
  • The Bureau of Labor Statistics is chronically understaffed and does not have the manpower to track import price bias.
  • We need to audit every industry to see how import price bias affects productivity numbers to verify whether or not we're competitive.
  • Companies that move manufacturing offshore tend to reduce research and development investments and offers Hewlett-Packard as an example.
While Mandel offers interesting and very relevant points to the debate of how to revive the US economy, something else cross my mind as I was reading the article. What is missing from the article is why. Why are conditions the way they are? Is it really due to human error?

What if entities like the US Chamber of Commerce *prefer* that data gathering be impaired so that we cannot see the blind spot in our data gathering efforts? What if we're not supposed to see that the only people who prosper from sending manufacturing offshore are the executives who do it? Seems that the Federal Reserve is attempting to take up the slack with this report.

That's why I say that the claim that American has the most productive employees is a ruse. It's based on inaccurate data, and promoted as a distraction from the cause of malaise in our economy: the conversion of American business from manufacturing to "global supply chain management.

Do we really want to become a nation of resellers? Or do we want to make something here - before the world passes us by?
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