Weak productivity pressures profits and, ultimately, increases unemployment. Eventually, after recessions, productivity increases, thanks to reviving demand and lower labour costs (after layoffs). So far, we are early in the layoff phase, with jobless claims rising in 48 US states. Similar trends are evident in Canada and many developed economies, not just in America. The segment below illuminates some of the challenges around productivity.
Labor productivity is a key, if often overlooked, economic indicator that policymakers use to gauge the health of the economy and guide fiscal and monetary policy decisions. But the U.S. has seen a productivity slump in recent years. And while the reasons for the decline are up for debate, the economic impacts are wide-ranging and can be felt across the board. So just how is productivity measured, how effective of a metric is it, what’s behind the slowdown and what impact does it have on the economy? Here is a direct video link.
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