Here’s a depressing thought: America’s productivity is rising on the backs of scared office workers. That’s essentially the explanation offered by Michael Feroli, chief U.S. economist at JPMorgan (JPM), for the 1.6 percent second-quarter gain reported Aug. 8 by the Labor Department. The productivity number is calculated by dividing output by hours worked. If the denominator isn’t rising to fully reflect those fear-induced work hours, voila — productivity rises. “Workers are still scared, and so probably could be induced to work harder or longer than usual out of fear of losing their jobs,” Feroli says.
An Economist Explains How Fear Drives Productivity
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