The Myth of American Productivity

In the midst of recession, it’s natural for Americans to search for signs of recovery. Candidates for president routinely praise the high productivity of American workers, yet their blanket statements on productivity can be misleading. There are different types: Domestic productivity reflects highly trained workers operating at peak capacity in US jobs, lowering domestic production costs; another form is global supply-chain productivity, reflecting investment in foreign parts and labor, with lowered costs, achieved through outsourcing, often at the cost of American jobs. Even at the highest levels of government policymaking, these two forms of productivity are often confused. A troubling fact, according to Michael Mandel writing for Washington Monthly, is that the nation’s high productivity rate in manufacturing is more a result from participation in the global supply chain than investment in US workers. Politicians must be upfront about the source of productivity and profits, to ensure proper remedies on domestic investment and the root causes of unemployment and recession. – YaleGlobal