Some uplifting news:
Last year, for the second year in a row, U.S. companies got more work out of their employees while spending less on overall labor costs.
A two-year decline in labor costs hasn’t happened since 1962 and 1963.
Good news, some would say. Or maybe just desserts. US wages were too high to begin with, especially those lazy public sector employees! However, there is no reason that a nation with high labor costs can’t be globally competitive.
In 2007, Germany’s labor costs were around 40 dollars per hour, whereas the US was around 34. Yet both in gross numbers and as a % of GDP, Germany outperformed the US. In terms of productivity, however, the US is still superior. So what gives?
We have a more productive workforce, lower taxes, lower labor costs, and drastically higher unemployment. Yet we get the same party line about hiring: “We’re Waiting on Obama”. It looks like the “small businesses” of American have had long enough to squeeze the blood out of the American turnip. As Frank said: Something’s missing.