- US worker productivity fell at a record pace in the second quarter.
- Some say “quiet quitting” is among the key reasons why.
- But high labor turnover, the pandemic, and supply chain disruptions could be more plausible explanations.
If you suspect your coworkers are less productive than they used to be, you might be right. But “quiet quitting” likely isn’t why.
Following the largest quarterly decline since 1947, US workers’ productivity — or output produced per hour worked — had a record decline in the second quarter, the Labor Department confirmed.
Some have speculated that “quiet quitting,” a term popularized on TikTok to describe workers that refuse to go above and beyond for their companies, is among the key reasons for the dropoff. But while quiet quitting may be a real phenomenon and newly coined phrase, the practice is not a new one. It therefore wouldn’t explain the recent productivity decline.
32% of US workers are “engaged” at their jobs, per June Gallup polling of over 15,000 Americans. While this marked a decline from a decade high of 36% in 2020, it was higher than the ten preceding years, matched only by the same 32% in 2015.
Others have pointed to another answer to the productivity puzzle: A high churn of workers across the economy are simply still figuring out how to do their jobs.
“I don’t think “quiet quitting” is real or affecting productivity growth,” Adam Ozimek, chief economist at the policy organization Economic Innovation Group, wrote on Twitter last week. “I think more likely it is actual quitting, and resulting high levels of churn and onboarding.”
As job openings reached near-record levels over the past few years, millions of Americans joined the Great Resignation — with some even doing so multiple times. “Quick quitting,” leaving one’s job after less than 12 months, was up nearly 10% versus the prior year as of March and remains elevated today, according to LinkedIn data.
The ongoing onboarding and training of new employees is among the reasons — in addition to the labor shortage — many Americans have experienced worse service in recent years. This doesn’t only hurt customers, however, but businesses. The workers left are forced to pick up the slack while newcomers get up to speed.
If “actual quitting,” as Ozimek calls it, is truly among the driving factors of the US’s productivity declines, that could change soon, he argues. As the Federal Reserve raises interest rates to slow down the economy, the job market is unlikely to come out unscathed. Fewer jobs for Americans would mean less job switching, less onboarding and training, and less reliance on inexperienced workers.
While a weakened labor market would arguably be a bad thing for the US on the whole, Ozimek ‘s argument suggests it could lead to gains on the productivity front.
Remote work, COVID, and labor hoarding could also be making workers less productive
The airline industry is one example of how “high levels of churn and onboarding” can impact a business. The countless delays and cancellations that have angered flyers over the past year have been in part due to staffing shortages. But this hasn’t been the only problem, as Delta CEO Ed Bastian spoke to in a July earnings call.
“Since the start of 2021, we’ve hired 18,000 new employees and our active headcount is at 95% of 2019 levels, despite only restoring less than 85% of our capacity,” he said. “The chief issue we’re working through is not hiring but a training and experience bubble.”
Several other factors could be contributing to the lower productivity levels as well, however.
Some have speculated that the rise of remote work has dampened worker productivity, given workers have avoided the watchful eyes of their bosses. Research from Stanford economist and remote work expert Nick Bloom, however, has found that hybrid work at least, actually increases productivity — and workers put in more hours from home than they do at the office.
But while remote workers may be productive once they’re up and running, it’s possible new remote employees are less productive. Onboarding and training new employees over Zoom is still a work in progress, among the reasons young people disproportionately prefer office life.
The pandemic has surely had an impact on productivity as well. Employees have always taken sick days from time to time, but this went into hyperdrive during the pandemic. And it stands to reason that a workforce that has to take more sick days is less productive than one that doesn’t. On the other hand, employees who never take sick days can experience long-term burnout, which can ultimately hinder job performance.
Another potential explanation is “labor hoarding.” Companies that struggled to hire during the ongoing labor shortage might be less likely to let workers go as the economy sours. If a business is overstaffed, it could plausibly lead to lower output per worker.
Lastly, supply chain disruptions could be yet another factor. A construction worker, for instance, that’s waiting for essential materials to be delivered, isn’t as productive as one that has everything they need to do their job.
