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Does "Productivity Increases" = Offshoring |
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Written by Stumo
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Thursday, 05 November 2009 |
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The Labor Department said yesterday that worker productivity rose, in the 3rd quarter, by 9.5%. This is the fastest pace in 6 years. But what does it mean?
From Wikipedia:
Productivity is a measure of output from a production process, per unit of input. For example, labor productivity is typically measured as a ratio of output per labor-hour, an input. Productivity may be conceived of as a metric of the technical or engineering efficiency of production.
So, if an plant makes 50,000 widgets per year at $100 per widget, the output is $5,000,000 (50,000 widgets x $100/widget). Assuming it takes 10 workers for a complex widget fully manufactured in the U.S., then each worker produces $500,000 in value per year.
Conversely, if only widget assembly occurs here, while all other widget manufacturing is offshored, then "productivity" skyrockets. The output of 50,000 widgets at $100 per widget is the same (again $5 million gross output). But for assembly, it only takes one worker per widget. Thus each worker is now producing $5 million in value each year, a 10 fold increase.
We have lost jobs and income, but gained productivity. Through offshoring.
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In the news
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Brian O'Shaughnessy is CPA's Chief Co-Chair and Manufacturing Co-Chair. We also have a Labor Co-Chair, Bob Baugh, and Agriculture Co-Chair, Joe Logan.
Brian, Chairman of Revere Copper Products, presented at the R-CALF USA annual convention on Friday, January 22, 2010. His presentation involved a discussion of how America became strong through making and growing things here, his history in mining and ranching, the strategic importance of continuing that course, and how we all need to work together to fix America's trade and economic problems.
The video presentation is available here. |
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