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Trump’s Growth Objectives Rely on Productivity Increases And Employment Growth: What Are The Issues-2

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ArmchairPolitician.JobsAndProductivity, August 15, 2017, By Brad Peery, WWW.ArmchairPolitician.US, ArmchairPolitician.US@gmail.com

The U.S. economy is approaching full employment, assuming that the unemployed who are not looking for jobs are not enticed back into the workforce. We have had declining productivity. Since 2004, productivity, the amount of goods a worker can produce, has been expanding at its slowest pace since World War II. The causes of this decline could include fewer breakthroughs in major technologies. There could be inefficiencies in sectors that could include housing, healthcare, and education.

Rising productivity is a prerequisite for long-term real wage growth and increased living standards. National policies such as competition, tax and trade policies, and research and development, are important. Firm-level issues such as management processes, and the use of capital and technology also matter. Also, what happens locally remains important. Trump policies that might increase productivity are investments in capital by companies because of the increased cash from lower tax rates. Also tax policies might be revised in a way that give tax breaks, such as more rapid depreciation, or even an immediate write-off of capital expenditures, to companies.

*Brookings has done a study to look at the basics of productivity at the local regional level. One of their productivity conclusions is: We observe massive variation across the U.S. economy. We estimate that U.S. labor productivity averaged $113,000 per worker in 2015. Yet, among the nation’s 382 metropolitan areas, that figure ranged from $299,000 per worker in Midland, TX to $38,000 per worker in Jacksonville, NC. Overall, the nation’s largest cities and regions tend to be the nation’s most productive areas.
*Understanding US Productivity Trends From the Bottom-up, Wednesday, March 15, 2017, by Joseph Parilla and Mark Muro.

Since an economic recovery began eight years ago, productivity has been increasing at 1.2% annual rate. That’s well below the 2.1% average since from 1947 to 2016 or the 2.6% average from 2000 to 2007.

According to the Bureau of Labor Statistics, nonfarm business sector labor productivity increased 0.9 percent during the second quarter of 2017, up from a 0.0% in the first quarter, the U.S. Bureau of Labor Statistics reported, as output increased 3.4 percent and hours worked increased 2.5 percent. From the second quarter of 2016 to the second quarter of 2017, productivity increased 1.2 percent, reflecting a 2.7-percent increase in output and a 1.5-percent increase in hours worked. Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons, including employees, proprietors, and unpaid family workers.

ArmchairPolitician.US Opinion:
President Trump needs to increase productivity to raise the GDP growth rate to 3% or more. The first half of 2017 productivity was 0.0% in Q1 and 0.9% in Q2. Productivity was only 1.2% for the last 12 months, which is the average over the last 9 years. It will be interesting to see how productivity grows in the second half of 2017, and whether productivity can be increased, and thus improve the GDP growth rate. Business confidence is up, and Trump policy successes could improve the economic growth rate.

See:
ArmchairPolitician.JobsAndProductivity, August 15, 2017, By Brad Peery, WWW.ArmchairPolitician.US, ArmchairPolitician.US@gmail.com
Trump’s Growth Objectives Rely on Productivity Increases And Employment Growth: What Are The Issues-1

30 comments to Trump’s Growth Objectives Rely on Productivity Increases And Employment Growth: What Are The Issues-2

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      Blog Site: http://WWW.ArmchairPolitician.US
      Email: ArmchairPolitician.US@gmail.com

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      ArmchairPolitician.US book on Amazon and Kindle, Title: Trump’s Political Agenda and Achievements

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      Brad Peery & ArmchairPolitician.US

      Book: WWW. Amazon.com, Trump’s Political Agenda and Achievements
      Blog Site: http://WWW.ArmchairPolitician.US
      Email: ArmchairPolitician.US@gmail.com

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