Productivity decline precedes remote work era, economists say
NEW YORK, UNITED STATES — Recent economic analyses indicate that productivity has been declining for years, challenging claims that remote work is to blame.
Goldman Sachs chief economist Jan Hatzius and New York University professor Thomas Philippon have highlighted decreasing “total factor productivity” (TFP), showing businesses grow more from extra labor and capital rather than efficiency gains.
Contrary to CEOs like Goldman‘s David Solomon, JPMorgan‘s Jamie Dimon, and Amazon‘s Andy Jassy, who fault remote work for lackluster results, Goldman’s report aligns with Philippon’s research that productivity has slowed for decades.
This counters the belief that productivity exponentially increases with new tech.
Philippon’s study of data since 1600 proposes linear TFP growth, not exponential. The findings suggest steady economic pace for over a century, with few major leaps.
The Goldman analysts acknowledge artificial intelligence (AI) could disrupt this pattern by significantly boosting productivity in coming decades. Still, Hatzius remains cautious, calling such expectations premature.
The discussions arise as U.S. productivity sees a historic dip, partially attributed to remote work per EY-Parthenon and Bureau of Labor Statistics.
However, a report from Economist Impact counters that flexible work doesn’t reduce focus, instead blaming lack of employee choice and poor infrastructure.
With Philippon’s findings reinforced by Goldman, evidence counters the pro-office view. The data implies the productivity decline is historical, not necessarily linked to remote work.
