Companies Choose Profits Over Productivity

When the U.S. economy emerged from the recession in June 2009, productivity was rising at a fast clip. Companies had spent the downturn cutting jobs and were lean and efficient. Productivity–output per hour worked–jumped 5.5 percent in the fourth quarter from a year earlier as workers did more with less. But as the recovery has chugged on, productivity growth has stalled, averaging less than 1 percent a year since 2011. Workers were actually less efficient in the first quarter of 2014, producing fewer goods and services per hour than they had during the previous quarter.

By Matthew Philips and Peter Coy

Full Story: http://www.businessweek.com/articles/2014-05-15/us-productivity-stalls-as-companies-invest-in-buybacks-dividends#r=hp-ls