Beating "Beat The Press"

One of the blogs I read regularly, and I recommend it to you, is Beat The Press at The Center for Economic and Policy Research website. It is devoted to debunking economic nonsense in the mainstream media and, in so doing, becomes a very decent source of accurate information itself.

It had a very strange item yesterday, though, about the New York Times and an article regarding Germany’s low rate of unemployment. For one thing it made very strange use of the words “productive” and “productivity,” saying that in times of worker shortages, “Workers move from low productivity sectors to high productivity sectors.”

The term “high productivity” usually means that fewer workers are doing more work for less money, so why workers would move to that sector when times are good for the working force seemed really odd to me. Why would workers, when they are in control of the situation, go where they are being paid less to do more work? It goes on to say,

If there are fewer workers this just means that the least productive jobs go unfilled. There will be fewer people working as store clerks in convenience stores, housekeepers in hotels, or as parking lot attendants. There is no obvious economic problem associated with workers moving into more productive occupations.

It finally hit me that the writer means “productive” as in “productive for the workers,” but that is not the manner in which an economics writer would normally use the term. It would certainly be more clear to say that workers were moving from “poorly rewarding” occupations to “more rewarding” ones. As the term is normally used, the “most productive” jobs will remain unfilled because they will demand the greatest amount of work for the lowest amount of pay.

The other thing that struck me as odd is the writer’s casual attitude regarding raising wages to attract workers. He admits that some employers will be in a position where that will “squeeze profit margins” since they cannot increase prices and that some of them might go out of business. He seems quite unfazed by this, as if those business should be quite happy with diminished profits and/or failure.

Perhaps he thinks that those employers are in a small minority and that the economy will not be affected by their loss. That seems a rather odd approach given that raising prices in the face of a global recession would seem to place the vast majority of employers in that position rather than a small minority of them.

There will be fewer people working as store clerks in convenience stores, housekeepers in hotels, or as parking lot attendants. There is no obvious economic problem associated with workers moving into more productive occupations.

I would suggest that is an “economic problem” for convenience stores, hotels, and parking lots, which is what the New York Times article is about.