[lbo-talk] Roach: Productivity in the New Economy

[Christian Gregory]

>Okay, now I'm getting confused.  I thought the outsourced labor
>could not be a cause of the higher domestic productivity numbers,
>given what is and is not included in the productivity equation.
>Can somebody clarify this for a noneconomist?

You're right. The output number for productivity calculations is based on GDP, so it excludes production overseass by US owned companies. The input is based on current employment statistics.

I'm not sure what Roach was thinking when he made this comment. It's hard to say how productivity would be changed by keeping manufacturing work over here, since the measure of total factor productivity includes weighted measures of inputs in a given sector.  But then again, the point of moving work overseas is not to increase domestic productivity, but to increase profit.

Christian