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EMPLOYMENT: Productivity report may be bad for jobless

THE OLYMPIAN | • Published November 06, 2009

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Companies across the economy are finding ways to do more with fewer workers, dimming hopes that hiring will take off anytime soon.

Employers became leaner and more efficient in the third quarter. Wages, meantime, remain flat or are falling. The result is that productivity – output per hour of work – jumped at the fastest pace in six years.

The good news for companies, though, might be bad news for the jobless. As long as companies can get their workers to produce more, they have little reason to hire – at least until consumer spending picks up. And the squeeze on incomes could depress consumer spending, putting the economic recovery at risk.

Still, some economists were encouraged by the productivity report. They say that eventually, employers won’t be able to squeeze more from their staffs. They will then have to ramp up hiring – something that could happen next year, even though the jobless rate is expected to hit double digits.

The Associated Press