Global AI boom drives record U.S. worker productivity gains
NEW YORK, UNITED STATES — American businesses are experiencing a surge in productivity as artificial intelligence (AI) reshapes industries, marking a shift in how work gets done across various sectors.
According to the U.S. Labor Department, worker output per hour has shown consistent growth, with a 2% increase in the third quarter of 2024 compared to the previous year.
Technology’s impact on production, efficiency
Small business owners like Vic Viktorov are leading this transformation. His Boston-based gym saw a 30% revenue increase in 2024 without adding to his sales team, thanks to AI implementation. “It allows us to be lean, nimble and fast,” Viktorov told the Wall Street Journal, noting that tasks that once took hours now take minutes.
In Indiana, Novae’s new $35 million trailer manufacturing facility demonstrates how technological investment pays off. The state-of-the-art plant already shows 35% higher output per worker, according to CEO Manish Bhandari, who emphasizes that success comes from “hundreds of small decisions.”
Immigration and innovation synergy
The productivity boost isn’t solely technology-driven. An influx of immigrants has contributed to labor force dynamics, often filling manual-intensive positions and enabling other workers to move into higher-skilled roles.
New business formation has also played a crucial role. November saw 157,678 “high-propensity” business applications, nearly 50% above pre-pandemic levels, according to the Census Bureau.
University of Maryland economist John Haltiwanger notes that these new enterprises are more likely to embrace innovative technologies and “do radical things.”
The trend extends to inventory management, where companies like Architectural Surfaces are using AI to eliminate inefficiencies. CEO Raj Karanam reports a 95% reduction in product shortages, translating to approximately $2.5 million in additional monthly revenue.
While some worry about job displacement, particularly in sectors like dock work where automation has sparked controversy, the overall productivity gains appear to be reshaping rather than reducing the workforce. Harvard economist David Deming suggests that while newer AI technologies like ChatGPT are still too recent to significantly impact economy-wide productivity, older AI applications are already making businesses more efficient.
