Question

Normally you will see US Labor Productivity Increasing at an annual rate of around 6%. In reading the book you should see that it must continue to increase for our country to continue to have the standard of living that we do.

What seemed odd to me was that in the 3rd Quarter of 2009, while our country is in the midst of a very deep recession, this number went to 14.8%. In the 4th Quarter it dropped to 6.4% and in the 1st Quarter of this year it was at 2.5%.

Why the Big Spike in the 3rd Quarter of 2009?
options:
a. There was an error in the figures .... Productivity was down
b. Businesses used the recession as an excuse to layoff unproductive people. What they have now is a very productive workforce
c. Employees are fearful of losing their jobs, so they are working harder and complaining less

Answer 1

The spike in US labor productivity in the 3rd Quarter of 2009 can be attributed to businesses laying off unproductive people during the recession, resulting in a more productive workforce.

Step-by-step explanation:

The big spike in US labor productivity in the 3rd Quarter of 2009 can be attributed to option b: businesses using the recession as an excuse to lay off unproductive people, resulting in a more productive workforce. The 2009 surge can be explained by companies optimizing their labor force through layoffs during the recession, thereby keeping only the most productive employees (option b). Additionally, the fear of job losses may have led employees to work harder and be less inclined to complain (option c), contributing to an unprecedented increase in productivity.

During a recession, businesses often make strategic decisions to cut costs and improve efficiency. In this case, laying off unproductive employees can lead to a more productive workforce. The remaining employees may be more motivated to work harder and perform better, as they are fearful of losing their jobs. Additionally, with a smaller workforce, businesses may focus on streamlining processes and implementing technology to increase productivity.

It's important to note that the spike in productivity during the recession may not be sustainable in the long term. As the economy recovers and businesses hire more employees, productivity growth may return to its normal rate.