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The Best Hope for a Better Future
Productivity matters because
it determines how well we live. Go around the globe. Go
back in time. Poorer countries aren’t nearly as
productive as richer ones. Societies that have risen from
poverty to affluence have done it by finding ways to get
more from their labor and other resources.
Looking back, it’s clear
that productivity has made the United States a rich
nation. Looking ahead, it should be just as clear that
productivity remains America’s best hope for improving
living standards in the future. Other possible paths
to a better life don’t hold much promise. We can’t
consume a larger portion of our national output. Family
obligations and lifestyle choices suggest we won’t
increase the proportion of the population at work. The
unemployment rate rose during the recession and its
aftermath, so it could come down—but only a percentage
point or so.
Bar codes and scanners
are making the service sector more productive. Supermarkets
and other retailers are
installing $25,000 self-service checkout stations,
reaping an average cost savings of about 40 percent. |
Productivity differs from these
limited sources of progress. Productivity promises a
better way because it’s boundless. It draws on
the vast potential of modern technology. It flows from
the infinite promise of human ingenuity. It taps into
the endless capacity to organize the economy more efficiently.
Productivity will take us as far as we let it.
History tells us that economic
progress can be a messy, often chaotic process. There
are lags as well as costs for worker retraining and
relocation. Turmoil in the job market causes hardships
for displaced workers and their families. Some workers
end up worse off. But the harsh realities of economic
life can’t be short-circuited.
Some of the troubling aspects
of economic life—the job losses, the outsourcing—are
good for productivity, the wellspring of progress. Understanding
that, we can face economic change with less fear.
Human nature clings to the status
quo: Most people are in favor of progress; it’s
change they don’t like. We can’t fall into
that trap. We won’t achieve greater productivity
without shifting resources from existing to new uses.
When labor moves from where it’s no longer needed,
we profit by whatever the recycled workers produce elsewhere.
Letting the economy reorganize
to become more productive has worked wonders for the
United States. Our future, no less, depends on doing
things a better way.
—W. Michael Cox and Richard
Alm
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