[lbo-talk] productivity and profits

joanna bujes jbujes at covad.net
Fri Jan 2 12:00:21 PST 2004


In a recent SF Chron article on productivity, the author wrote:

"Such fast-growing productivity is a tremendous boon for society, economists stress. While jobs might disappear in the short run, higher output per worker spurs growth that in the long run creates more opportunity.

Higher productivity generates profit that is often reinvested in new job- creating activities, they note."

Full article at

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/12/28/BUGE03U34Q1.DTL

I think that the statement that profit is "often" reinvested in new job-creating activities deserves closer scrutiny. First, it says nothing about where these jobs are going to be. Second, I actually don't think that's the trend. I read recently, I think it was in Barrons, that the profits are not being reinvested but used largely for speculation.

Does anyone have data on this?

Joanna



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