US corporations squeezing more output from workers and paying lower wages

US Labor Department data released yesterday showed productivity up 6.4 percent in the second quarter, the largest gain since 2003 and higher than economists’ forecasts of 5.5 percent. Over the same period, workers’ compensation fell sharply.

The Bureau of Labor Statistics explained that productivity—which measures hourly output per employee—increased “due to hours worked declining faster than output.”

In other words, big business is using the rise in unemployment to extract greater output from employed workers through speedup and other forms of intensified exploitation.

Nonfarm productivity rose 6.4 percent as a result of output declining by 1.7 percent and total hours worked plummeting 7.6 percent.

Data also showed that real hourly employee compensation fell by 1.1 percent in the second quarter, or by 2.2 percent on an annualized basis. The combined impact of declining wages and rising productivity brought unit labor costs down by a huge 5.8 percent in the three months from April to June.

In manufacturing, quarterly productivity rose 5.3 percent, a result of output falling by 9.9 percent and hours by 14.4 percent. In the durable manufacturing sub-category, the output and hours decline was even greater—16.5 percent and 19.6 percent respectively.

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