Bloomberg – Not To Belabour But More Than Job Numbers The Issue Is Stagnant Growth & Productivity


Watching the US elections and discussions across Europe is the fact that even in countries where there are low unemployment statistics, the huge issue is about stagnant growth, stagnant/depressed wages, and low levels of productivity.

Bloomberg has an article articulating it quite well:

The improvement in the U.S. labor market is certainly good news. It could soon become a headache, however, if it persists alongside disappointing economic growth.

The economy added 255,000 jobs in July, after adding 292,000 in June. Employment growth was weaker earlier in the year, and two solid months don’t make a trend — but even so, the labor market is in pretty good shape. The unemployment rate stands at just 4.9 percent, yet the economy keeps drawing workers back into the labor force and creating new jobs.

The problem is that economic activity, according to the most recent indications, remains subdued. The implication is that growth in output per worker — productivity — is lagging. Underlining the point, the current recovery has so far relied on consumer spending much more than investment, which remains in the doldrums. Companies that don’t invest don’t get more productive.

High employment is great — but without stronger growth in productivity, a tight labor market won’t raise living standards as much as it should.

Author: Venkata Gandikota

Venkata has more than 13 years of technical engineering, research, ideation, strategy and business modeling experience. Based on his experience with the Indian market and realizing also the need for affordable & sustainable solutions for Finland and other European markets, he started The Nordic Frugal Innovation Society in late 2013 with 2 colleagues. By organizing ideation workshops and 2 major conferences involving Cities, Universities, and businesses he started to mainstream the concept in Finland and the Nordics. Gandikota has also written several articles focusing on frugal innovations in the Finnish media. He has also been helping Finnish businesses in India as CEO of Indianeer Consulting and gives guest lectures at JAMK University of Applied Sciences in Jyväskylä. He has a Bachelors in Chemical Engineering from India and a Masters in Environmental Engineering from USA.