Trying to clear up econ jargon for non-economists: Ellen Dannin wrote: > > (2) What is productivity? > > > > Simple definition: output/worker/period of time. > > Isn't it actually cost of labor etc? So that if you cut the amount of > wages paid to workers that in and of itself raises productivity, all > other things remaining equal? GLevy responded: If the "cost of labor" (should read, IMHO, price of labor-power) is cut, that will increase profitability, ceteris paribus. However, it will leave the productivity of labor unchanged, other things remaining the same. Of course there are other ways to increase the productivity of labor other than through technological change, e.g. increasing the intensity of work, but decreasing wages per se has no *direct* affect on productivity. ------------------- The simple definition of productivity is correct. Lower the wage paid for the "period of time," say an hour, reduces "unit labor costs." Profits for firms rise when unit labor costs are reduced. ULC can be reduced by cutting wages or by increasing the amount of output produced each hour, ie, increasing productivity. Both affect profits, but the jargon makes a clear distinction between the two causes. I disagree with Rich Parkin's post, and agree with GLevy. Increasing work intensity can increase productivity and reduce ULC. That is why corps. spend so much time trying to intensify the work process. If a worker tends two machines instead of just one, productivity increases and ULC fall. It is important to recognize this because students have bought the idea that all productivity increases are good. But we have to get them to realize that allowing firms to drive the workforce to physical and/or mental collapse is not in their self-interest. Doug Orr [EMAIL PROTECTED]
