[The New York Times] The Economy is Getting Hotter. Is a Productivity Boom Next?
An excerpt from "The Economy Is Getting Hotter. Is a Productivity Boom Next?"
By Neil Irwin
Feb. 21, 2018
The New York Times
The basic technology for self-serve kiosks has been around for years. But when the unemployment rate was at its post-crisis highs, employers could have their pick of good workers at relatively low prices. Now, with the jobless rate at 4.1 percent, good workers are harder to find. And, perhaps unsurprisingly, companies have been more open to installing technology that may have a significant upfront cost and require reworking how a restaurant is organized, but allow more sales without hiring more workers.
“A consequence of a really tight labor market is a higher turnover rate,” said Liah Luther, marketing manager at Nextep Systems, a Michigan company that sells self-ordering kiosks to restaurants, casinos and corporate facilities. “Once you eliminate the need for extensive training on a point of sale system, you can focus on soft skills like customer service, and reduce the cost of turnover.”
The optimistic case for both productivity and overall economic growth goes like this: For the last several years, a lack of demand and plenty of spare capacity of both workers and equipment made businesses complacent and unwilling to invest in new equipment, software or new ways of doing things that might allow more output per hour of labor.
Now, with companies having a harder time finding qualified workers and with demand for their products rising, they’ll have no choice but to re-engineer how they work to try to increase productivity. Higher productivity will in turn make it easier to justify higher wages, creating a self-reinforcing cycle of higher economic growth.