The myth of American productivity

Government statistics reveal nothing about how a company improves productivity, and sadly, U.S. workers “often have little to do with the gains,” said Michael Mandel at the Washington Monthly.

Michael Mandel

Washington Monthly

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If a U.S. manufacturer saves $250,000 “simply by switching from a Japanese sprocket supplier to a much cheaper Chinese sprocket supplier,” that counts as an increase in American productivity. The poor stats extend to imports, where $4 billion in, say, imported refrigerators are considered to displace $4 billion worth of U.S.-made refrigerators. But since foreign-made appliances typically cost less, the loss to domestic production might be far more. We don’t know. Such widespread statistical deficiencies prevent us from knowing the true state of the U.S. economy­—and from accurately diagnosing what ails it.