Quote:
Originally posted by chavos
Most returns are not immediate. A new factory bought a few years ago will still be producing productivity gains as it reaches peak efficiecy. Education completed prior to this date will still be giving dividends now. however, ignorance of weak investment in infrastructure and education can only lead to problems down the road.
Stong productivity gains are currently coming from layoffs...as more inefficient workers are fired, and the rest are scared in to working off the clock, etc... This is unsustainable. Firing can only bring up productivity for a short while...and then we're facing a serious situation where there are a lack of jobs, and a lack of producivity increases to provde for a higher standard of living.
Source: http://www.bls.gov/news.release/prod2.nr0.htm
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Your assumptions are off base. Layoffs do not typically target the inefficient workers and the effect of layoffs on the remainder of employees is far from making them more productive. They are forced to cover more areas and work on things they have no experience with. Firing does not improve productivity.
Technology and training are the two biggest productivity improvers. It takes most new factories quite a while to surpass the old ones in efficiency as there are always growing pains. Without consumer demand no one will be buying the goods producd by that new state of the art factory.