Macroeconomics: Unit 3, Productivity

CoursesMacroeconomics
LanguageEnglish Language

Transcript

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screen with your fingers doing you know that awkward dance

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Then there's a ding like that Yu check yur Facebook

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notifications and you're sucked into the vortex of finding out

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which friends character you are Well there's no escape Your

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productivity just tanked And you khun say goodbye to finishing

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your paper You can always retake the course next year

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which is such a phoebe thing to dio All right

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you measure your own writing productivity in words Words per

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minute words per hour Words per day Well guess what

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Economist meter and or measure the productivity of an economy

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more or less the same way by looking at the

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volume usually in dollars of output each unit of an

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input produces All right How do we say that in

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English Well how many cars can given person working one

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day at an auto manufacturing company produced how many coffees

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work of beans Can the new grindr churn out per

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day How many balloons gloves and condoms on a gallon

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of latex make productivity of latex Yeah well the big

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driver in most economies is the deployment of capital Resource

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is I mean machines that cost a lot and then

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you know produce a lot And generally speaking the more

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tech savvy the machine on the more productivity it produces

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Well economists breakdown productivity into a couple of different structured

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metrics The Bureau of Labor Statistics reports all kinds of

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data relative the labors productivity in the previous period usually

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1/4 like 13 ish weeks This measurement quantifies the productivity

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of all workers across all industries in an economy I'II

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super general and broad Well that stat is found by

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measuring the ratio between the value of all the goods

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and services produced a VP and the total hours humans

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worked to produce those goods and services Why the little

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snarky humans thing in there Well because yeah like we've

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noted a revolution in labor is taking place today that

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will rival that of the Industrial Revolution of the 19th

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century Because Computer Power's gotten Sochi and standardized well robots

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have gotten sheep as well and smart And very soon

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the skill set of a basic burger flipping worker will

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become economically replaced by robots and a mass dislocation of

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the usefulness of the lower end of the labor force

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Will for society to do some heavy thinking about what

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it does for the unskilled want to work but aren't

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talented enough Workers Yeah well the data here for labor

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productivity presented is for non farm business Why Why nonfarm

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What do they have against Farm's Well many farms employ

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migratory laborers and undocumented immigrants Records may be absent because

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workers were paid in cash to keep things you know

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off the books And the industry in general operates with

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different structures and pricing pressures than most urban businesses Labor

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productivity therefore is often reported for farm and then for

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non farm business payrolls Separately we'll labor productivity doesn't just

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vary by industry Certain groups and types of people are

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more productive than others After an earthquake in the late

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19 nineties much of the U S Highway 10 that

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thing in L A There it is was destroyed well

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To rebuild the roads union workers would have required 144

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people per freeway mile while nonunion workers found a way

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to do it with just 89 people Will the labor

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per dollar of the average nonunion worker was higher than

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a union workers because they don't need the layers of

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support bureaucrats Which is to say that they can pour

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their own coffee They can fill out their own time

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sheets They can click on their own for a one

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K investment choices and so on Productivity can change over

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time as well and not just because everyone decides that

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now they have to hunker down and really start churning

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products out Advancements in technology investments in better and more

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efficient plants and equipment and better management and organization all

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improve productivity Well one thing Cos Evaluate is marginal productivity

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Like for each incremental unit of labor What do I

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get for each incremental unit of capital What do I

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get Okay so all this brings us to total factor

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productivity or T f p or All right So what

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is this factor thing And that we're now adding like

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Max factor the makeup No more like the X factor

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Total factor productivity also called the solo residual spell it

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no relation Hans represents changes in productivity caused by better

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tech and different organizational strategies So basically it has to

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do with the process of production rather than the inputs

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Create a more efficient process and you'll be able to

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use your resource is better I e make more with

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less And yes Henry Ford's assembly line People were looking

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at you Yeah it was a big innovation back then

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Well you can picture how all this works with technology

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like Well say your boss wants you to write a

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report about a location where the company might open a

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new store Well the 1958 you'd have to go to

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the library Look up Demographic stats In a book you

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might have to call around various agencies to get data

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Wait for everyone to call you back Once you have

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your research you type it up on a manual typewriter

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You know one of these old fangled contraptions If you

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wanted to edit something or add something well you'd have

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to re type the whole thing That's going to create

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enough documents to give everyone for the next meeting Well

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you have to go to a printer and get copies

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made by an expert Well nowadays you can do all

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your research online Type it up on a word processor

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is Aaron while just email copies to everyone like right

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there much more efficient And you Khun get several reports

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done today in the time it took you to generate

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on Lee maybe one in 1958 Well there are other

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ways to squeeze out additional productivity other than via technology

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or at least this kind biz School grads loved to

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come up with a handy dandy How to guides to

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streamline business Here's a particularly famous example of one of

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these processes meant to boost productivity Thie agile development cycle

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Yeah we use it here tomorrow It's a six step

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framework for teams working on projects together to streamline their

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processes And there are not surprisingly six steps Yes denial

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anger bargaining different first plan then you designed Then you

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develop Then you test then you evaluate Then you meet

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all that simple right well But every Silicon Valley startup

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manager and their mother uses this workflow process to increase

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productivity and efficiency The idea is to lay out the

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process in discreet steps so that everything is as clear

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as possible Otherwise it becomes and disorganized Hot project Yeah

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it's kind of like when you do laundry like the

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people in Silicon Valley don't want to end up you 00:07:20.311 --> [endTime] know losing socks that's what we do