Are our productivity, real salary, unemployment, and GDP figures up to date?

John Authers writes, “If ever there was a good place to take a deep breath and gain context on our unnecessarily complex world, it would be Jackson Hole, Wyoming” “Powell avoids foreign complications in the winds of Wyoming” August 25.

In a recent post in Bank of England’s blog “bankunderground” I read: “With the rise of smartphones in particular, the amount of stimuli competing for our attention throughout the day has exploded... we are more distracted than ever as a result of the battle for our attention. One study, for example, finds that we are distracted nearly 50% of the time.”

So, one interesting way for central bankers to get an understanding of our ever more complex world would be to ask them: If you deliver the same at work as a decade ago, but now you spend 50% of your working hours consuming distractions, on your cell or similar, how much has your productivity, your real salary, your voluntary unemployment increased? And what about GDP?

PS. Sir, as you well know, before initiating the Jackson Hole proceedings, I would love for all central bankers there to assist a seminar on the meaning “conditional probabilities.” Had they known about it before imposing their risk weighted capital requirements for banks it would have saved the world from a lot of problems.

@PerKurowski

If output displacement hides productivity, so does input displacement.

Sir, Dr Peter Johnson, responding to Diane Coyle’s “Conventional measures pose the wrong productivity question” August 16, argues that “Shift in output definition [is] at the heart of the productivity puzzle” and concludes “We are not counting apples for apples”,August 20.

As one example of “output displacement” output Johnson writes that “A great deal of retail banking activity has been displaced to private individuals [as a result of internet technology] and is not included in the calculations of output or productivity.”

There is also the other side of that same mirror namely that which you could call input displacement. 

In a letter to you referring to that same article by Diane Coyle I mentioned a post by Dan Dixon, in Bank of England’s “bankunderground” blog, titled “Is the economy suffering from the crisis of attention?” 

It said, “With the rise of smartphones in particular, the amount of stimuli competing for our attention throughout the day has exploded... we are more distracted than ever as a result of the battle for our attention. One study, for example, finds that we are distracted nearly 50% of the time.”

Sir, if those interruptions were recorded for what they really are, reduced working hours and increased consumption of distractions, we would probably see a dramatic increase in productivity, in real salaries, in voluntary unemployment and in GDP.

In other words our current economic compasses might not be working properly, risking taking us in the wrong direction.

@PerKurowski

If it now takes researchers much more time to come up with ideas, how much of that is caused by their consumption of distractions?

Sir, Diane Coyle writes that current productivity data does not consider what’s achieved through outsourcing since GDP excludes all the intermediate links in the chain and the additional value is netted out. If included “economic output would look somewhat better than the current statistics suggest. “Conventional measures pose the wrong productivity question” August 16.

But when Coyle refers to “a recent paper a group of economists from Stanford University and the Massachusetts Institute of Technology…calculate that it now takes more than 20 times the number of researchers to generate the same economic growth as it did in the 1930s.” I would have to ask: Does that calculation take due consideration of the ever-growing time researchers spend, not working, but consuming distraction on the cell phones or laptops?

Some months ago, in Bank of England’s “bankunderground” blog, we read a post by Dan Nixon titled “Is the economy suffering from the crisis of attention?” It said, “With the rise of smartphones in particular, the amount of stimuli competing for our attention throughout the day has exploded... we are more distracted than ever as a result of the battle for our attention. One study, for example, finds that we are distracted nearly 50% of the time.”

If those distractioninterruptions were recorded for what they really are, we would probably see a dramatic increase in productivity, in real salaries, in voluntary unemployment and in GDP.

In other words our current economic compasses might not be working properly, risking taking us in the wrong direction.

@PerKurowski

If we want real productivity data, we need consider real working conditions

Sir, I refer to my former colleague at the World Bank Kurt Bayer’s letter of August 16, “Real productivity is an efficiency measure”. I fully agree with what he argues, though, unfortunately, lately, life has become more complicated, even for statisticians. 

Some months ago, in Bank of England’s “bankunderground” blog, we read a post by Dan Nixon titled “Is the economy suffering from the crisis of attention?”. It said, “With the rise of smartphones in particular, the amount of stimuli competing for our attention throughout the day has exploded... we are more distracted than ever as a result of the battle for our attention. One study, for example, finds that we are distracted nearly 50% of the time.”

And so these interruptions should have to be recorded for what they are, meaning a consumption of distractions during working hours. If so, we would perhaps see a dramatic increase in productivity, in real salaries, in voluntary unemployment and in GDP.

In other words our current economic compasses might not be working properly, risking taking us in the wrong direction.

@PerKurowski

We need to rethink productivity data, in light of so many “working hours” spent consuming distractions.

Sir, referencing Chris Giles’ and Gavin Jackson’s “Surge in low-value jobs magnifies UK productivity problem” of August 13, I believe that whenstating “increases in low-wage jobs in bars, social work and warehouses have served to hold back UK productivity growth” it hints at sort of causation that might not really be there.

I say so because we have entered a new era that requires redefining entirely the ways we measure productivity. 

Some months ago, in Bank of England’s “bankunderground” blog, we read a post by Dan Nixon titled “Is the economy suffering from the crisis of attention?”. It said, “With the rise of smartphones in particular, the amount of stimuli competing for our attention throughout the day has exploded... we are more distracted than ever as a result of the battle for our attention. One study, for example, finds that we are distracted nearly 50% of the time.”

Nixon, answering the question posed in the title wrote, “The most obvious place to look would be in productivity growth, which has been persistently weak across advanced economies over the past decade.”

But, what if instead of being recorded as distractions during working hours, these were to be recorded as a private consumption that reduces the effective working hours? Would that not increase GDP and reduce working hours, and thereby point instead to a dramatic increase in productivity?

In the same vein, would then not real-salaries, instead of stagnating, have been increasing a lot?

And what about our employment and unemployment data if the time used to consume distractions during working hours would not be counted as work? 

Sir, it behooves us to make certain how we measure the economy gets updated to reflect underlying realities. 

Perhaps then we are able to understand better the growing need for worthy and decent unemployments.

Perhaps then we are able to better understand the need for a Universal Basic Income, not as to allow some to stay in bed, but to allow everyone a better opportunity to reach up to whatever gainful employments might be left, like those “low-wage jobs” that it behooves us all, not to consider as “low value jobs”

@PerKurowski

Productivity, real salaries, employment rates, GDP should consider the increased consumption of distractions during work hours

Sir, Erik Brynjolfsson (and Andrew McAfee) writes: “If machine learning is already superhuman, why did we not see it in productivity statistics earlier? The answer is that its breakthroughs haven’t yet had time to deeply change how work gets done” “Machine learning will be the engine of global growth” July 27.

That is true, but we also need to realize that we have not done yet measured the effect of all the increased consumption of distractions during working hours.

In Bank of England’s “bankunderground" blog we recently read: “With the rise of smartphones in particular, the amount of stimuli competing for our attention throughout the day has exploded... we are more distracted than ever as a result of the battle for our attention. One study, for example, finds that we are distracted nearly 50% of the time.”

And on a recent visit to a major shop in the Washington area, thinking about it, I noticed that 8 out of the 11 attendants I saw were busy with some type of activity on their cellphones, and I seriously suspect they were not just checking inventories.

The impact of that on productivity, with less effective working time is being put into production, could be huge.

Also, going from for instance a 10% to a 50% distraction signifies de facto that full time or paid by the hour employee’s real salaries have increased fabulously.

And what about the real employment rate if we deduct the hours engaged in distractions? A statistical nightmare? Will we ever be able to compare apples with apples again?

And how should all these working hours consumed with distractions be considered in the GDP figures?

@PerKurowski

When analyzing labor markets, do not ignore the time being wasted/used consuming distractions.

Sir, (as usual) I read with much interest Sarah O’Connor’s article on “labour shortages being reported gloomily all over the developed world” “Labour scarcity helps heal workers’ deep financial scars” July 11.

I think she forgot to include in her analysis the fact that more and more time is used during working hours in distractions. On a recent visit to a major shop in the Washington area, 8 out of the 11 attendances I saw were busy with some type of activity on their i-phones, and I seriously suspect they were not just checking inventories.

Less hours effectively worked, should translate not only in labor shortages but also into higher real salaries. And I also frequently ask myself what would our economic data be telling if treated the distractions as consumption. Could productivity have been increasing fabulously without us noticing it?

@PerKurowski

What if workplace distractions were considered part of consumption instead of part production?

Sir, Tim Harford, who has blocked me on Twitter writes: “Bank of England’s unofficial blog…compared plunging productivity with the soaring shipments of smartphones. Typical productivity growth in advanced economies had hovered steadily around 1 per cent a year for several decades, but has on average been negative since 2007. That was the year the iPhone started to ship.” “Computers are making generalists of us all”, December 6.

That iPhone and many of its close or distant cousins, cause a lot of distractions. If that time distracted was classified not as time of production but as time of consumption, and outputs remain fairly the same, would that not point at much higher productivity and much higher real salaries?

https://teawithft.blogspot.com/2017/11/what-does-going-from-10-to-50-level-of.html

https://teawithft.blogspot.com/2017/12/the-distraction-factor-forces-us-to.html

PS. Harford writes here also a lot about Power Point presentations. Here my long ago take on it

@PerKurowski

What if we in writing had to authorize phone companies to listen to our calls, in order to have access to phones?

Brooke Masters writes: “when I link our Amazon Echo speaker to my son’s Spotify account, I have no idea whether I am violating one of the thousands of terms and conditions he agreed to with his account. Furthermore, does that act give Amazon the right to send him advertisements based on the songs we play?” “Take ownership of the sharing economy” December 29.

She is absolutely right. The rights we seem to have to give up in order to gain access to social media and alike, though defined in small letters in thousands of unreadable pages, is one of the most undefined issues of our time.

Some questions:

Should the marginal cost for social media owners to access, and waste, so much of our limited attention span, be zero?

Should we be able to copyright our own preferences so that we at least can have something to negotiate with?

How much can we allow being distracted during working hours before our employer has the right to deduct our salaries paid?

How will such working hours distractions be accounted for in employment statistics?

How is all this free or very cheap consumption paid by used attention spans be accounted for, for instance in GNP figures?

Should social media owners be allowed to impose their own rules or should that not be subject to some kind of a special arbitration panel?

How our global differences be managed? Does a government that interferes with its citizens’ rights of access to social media have access to other web sites of other nations?

@PerKurowski

The distraction factor forces us to redefine entirely our concepts of working hours and real salaries

Sir, I refer to Sarah O’Connor discussion of “bureaucratic limits on working hours” “Symbolic victories over Brussels will not help Britain’s workers”, December 27.

But, when we read in Bank of England’s BankUnderground blog that “we check our phones 150 times per day, or roughly once every 6½ mins; and that the average smartphone user spends around 2½ hours each day on his or her phone; and that we are distracted nearly 50% of the time,” then of course we have reasons to suspect that all our usual thinking about working hours, or even about real salaries, have entered into a completely new dimension and are up for major revisions.

Sir, never ever did we chat around the coffee machine that much in our days… or did you?

What does going from a 10% to a 50% level of distraction signify for full-time employees’ real salaries?

Sir, Sarah O’Connor writes “Males in well-paid full-time employment, earning 2.5 times the median wage, are now working slightly longer hours on average than two decades ago, according to the Resolution Foundation, a think-tank.” “Robots will drive us to rethink the way we distribute work” November 29.

In Bank of England’s “bankunderground" blog we recently read: “With the rise of smartphones in particular, the amount of stimuli competing for our attention throughout the day has exploded... we are more distracted than ever as a result of the battle for our attention. One study, for example, finds that we are distracted nearly 50% of the time.”

So if 50% of the time is now spend being distracted, and since those not employed full time are not equally remunerated for distractions, that of “earning 2.5 times the median wage”, could de facto be a serious understatement.

Sir, just think about what going from for instance a 10% to a 50% distraction signifies to full time employees’ real salaries. Fabulous increases!

PS. And what is its impact on productivity in terms that less effective working time is being put into production?

PS. Or what would the real employment rate be if we deduct the hours engaged in distractions? A statistical nightmare? Will we ever be able to compare apples with apples again?

PS. And how should all these working hours consumed with distractions be considered in GDP figures?

PS. Robots will not only drive us to rethink the way we distribute work. It also forces us to think about how to create decent and worthy unemployments.

@PerKurowski