I don’t know about you, but I’m starting to think that this wonderful plan to shut down the country and then reopen it while focusing on racial nationalism, abortion, electric cars and spending a ton of money wasn’t the best idea.
Worker productivity fell to start 2022 at its fastest pace in nearly 75 years while labor costs soared as the U.S. struggled with surging Covid cases, the Bureau of Labor Statistics reported Thursday.
Nonfarm productivity, a measure of output against hours worked, declined 7.5% from January through March, the biggest fall since the third quarter of 1947.
At the same time, unit labor costs soared 11.6%, bringing the increase over the past four quarters to 7.2%, the biggest gain since the third quarter of 1982.
So yes, even higher prices are coming. And the mess keeps on churning.
Unit-labor costs surged at 11.6% annual pace in the first quarter. Over the past year these costs have risen at the fastest clip in 40 years.
Unit-labor costs reflect how much a business pays an employee to produce one unit of output — say a ton of steel or a box of cookies.
Yet adjusted for inflation compensation fell 5.5%, underscoring that rising prices are hurting breadwinners. Wages aren’t keeping up with inflation.
Workers, for their part, are demanding and receiving more pay amid the biggest labor shortage in decades. So companies are also paying higher labor costs to produce goods and services — and that could also start adding to inflation.
The hamster will chase itself some more. And lefties will call for more social justice, spending more money, adding more regulations, raising hourly wages, and the Cloward-Piven wheel will spin faster until, they hope, it spins out of control.