Categories: Economic News

Economic update: decrease in worker productivity

COLORADO SPRINGS — Recently, worker productivity has been on the decline, causing a shift in the labor market.

According to UCCS economics expert Tatiana Bailey, employers are now having to raise wages to attract future employees, while leading to a trend where workers are paid more to do less.

At the same time, workers are quitting at a high rate, meaning it takes longer for new workers to learn the job and reach peak productivity. Another factor is the number of workers who retired during the pandemic.

“Older workers have institutional knowledge that younger workers typically don’t,” Bailey said. “That demographic impact alone can negatively impact productivity quite a bit.”

According to Bailey, we have an acute labor shortage in almost every industry and companies are unable to meet demand due to a lack of workers. According to Bailey, 49% of business owners say they have jobs they can’t fill, which is also leading to decreased production.

Bailey explains that the reason for a decline in worker productivity is because there simply aren’t enough workers and companies can’t keep up with demand.


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