It looks like we’re getting less and less productive generationally.
According to research from EY-Parthenon, the U.S. has now had five consecutive quarters of year-over-year decreases in productivity. This is based on an analysis of data from the federal Bureau of Labor Statistics, and not since 1948 has a decline of this magnitude happened before.
“When you have an environment in which output is outpacing labor growth, that’s an environment of stronger productivity,” Gregory Daco, chief economist at accounting firm EY-Parthenon said in an interview with Fortune. “When you have the opposite, when output growth is sluggish but labor growth is strong, you have a weak productivity environment.”
The outlet also pointed out that over the past five or six quarters, he says, economic activity has been sluggish, even as the country has seen a resilient labor market and continued job gains. People are working longer hours, he adds, so labor utilization has also been higher. Unit labor costs grew 6.3% this quarter, while compensation grew 3.4%. That combination has created conditions for the perfect storm: Weak productivity for five quarters straight, for the first time since post-World War II.
Some economists are blaming the WFH battle between employers and employees for the drop in productivity as more workers are opting to do remote work.
As previously reported by ESSENCE, Pew Research survey results show that nearly three since the height of the pandemic, about roughly six-in-ten U.S. workers, say their jobs can mainly be done from home (59%) and prefer to work from home all or most of the time.
About 44% also shared that working from home has made it more convenient for them to meet deadlines, and another 72% say working from home hasn’t affected their ability to advance in their job. So, it’s clear why WFH is winning a workplace war when it comes preferred to working styles.