Productivity That Kills the Workers

Recent news reports have brought a little optimism that employment is somewhat improving, increasing prospects that we won't experience a completely jobless recovery as the economy picks up steam. That being said, the general consensus is that job growth will be slow, and given that the recovery is still tenuous at this point, we're not in a position to celebrate a robust new era in job creation.

My personal experience and observations are consistent with what I read about in the news. Most experts have noted that worker productivity in the past four years have soared as employees have been asked to do more with less, and employees have largely complied in fear of leaving their own jobs. Meanwhile, corporate revenues have steadily grown providing many companies with the double-win of increased revenue with a reduced employee cost base. Needless to say, most companies are not eager to stem the tide of these two trends. This has the results of higher productivity (good for companies), higher profits (good for companies and for employees insomuch these are being passed along through wage increases and profit-sharing) but placed a high burden of employees who are already stretched thin (unequivocally bad for employees).

It's not just the lack of hiring that's killing those "who should feel lucky they have a job". Another recent study from Human Rights Watch blasted American employers for weak and non-existent laws around parental leave, concluding that this deficiency isn't just counterproductive for businesses, but they also are endangering the very fabric of society. As a company which has scaled back a once generous policy of paid parental leave, I've seen this first hand. I've also witnessed the shrinking of other benefits revolving around medical and drug payments, which is also consistent with the broader labor market, which, if you haven't been paying attention, is getting better, but still isn't roaring.

On one hand, can you blame "the corporations"? Insomuch there's a prevailing wisdom that their chief and foremost responsibility is to the shareholders, isn't it the duty of the corporation to shrink costs (including benefits) if it leads to no resulting unwanted employee defections? I had written about this in a post two years ago, on how a recalibration of human capital markets could mean increasingly stingy behavior from HR leaders. This is just an extension of this.

If the Human Rights Watch report is correct, this might be emblematic of how too much of a good thing (worker productivity) could be a bad thing. In some ways, I can't help but see parallels with the Amy Chua-incited Asian parenting hub-bub - you can keep pushing and pushing but at some point the returns become negative with a significant amount of downside risk.