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To: AC Flyer who wrote (20722)	7/3/2002 8:39:51 PM
From: LLCF	Read Replies (1) \| Respond to of 74559

<<The reason we are seeing high productivity right now is because demand and output is increasing but workers are not being rehired. More stuff produced + same number of workers = high productivity. What this has to do with an economic collapse is beyond me,>> But we saw high productivity all along, so how you come to your conclusions is beyond me... especially since enemployment has been INCREASING all along but maybe one period. What this has to economic colapse is that productivity increased swiftly in the 30's as well. DAK

To: AC Flyer who wrote (20722)	7/3/2002 10:48:09 PM
From: Don Lloyd	Read Replies (2) \| Respond to of 74559

AC - If we were to accept your premise that productivity is universally good, we would have to explain why a majority of the companies in America has spent the last two or three years announcing massive layoffs. If these were the results of new machines and methods and the result of a plan, why did they all suddenly decide at the same time to implement their plans? Did they jump or were they pushed? The fact is that improved productivity is far more often a cost of survival, than a source of improved profits. Most productivity improvements are available to all competitors, and most additional profits are competed away. Companies that cannot improve their productivity, whether for financial or other reasons, die. I have not been brainwashed by anyone, and have been saying for at least two years that productivity is nothing like the support for stock prices that most people seem to believe. The fact that I spent 25 years in close contact with production facilities has nothing to do with the obvious result that layoffs proceed somewhat sequentially as the last production lot of a product flows down the line. The assemblers will be terminated before the shippers, and the ratio of shipments to employees will continually increase, resulting in the phantom high measures of productivity that we see. Your claim that weak competitors falling by the wayside doesn't result in higher measured productivity overlooks the fact that the customers of the disappearing companies don't just disappear in general, but redistribute themselves to the remaining companies, which now have a larger market share and absolute production without greatly increased employment. The disappearing companies take with them both fixed and variable labor, while the remaining companies will likely add a smaller amount of variable labor and little or no fixed labor at all. Regards, Don