The Employed Aren't Happy Either

There has been lots of talk about the perils of unemployment in the Great Recession, and they are certainly not to be underestimated. But it turns out staying employed in the Recession can be perilous, too.

The Labor Department reported Tuesday that worker productivity fell 0.9% in the second quarter. That's the first decline in eighteen months and may be a sign that employees have finally gotten to the point where they are simply stretched too thin.

The amount of hours worked rose at a faster pace in the month than actual economic output. That means that companies may no longer be able to rely on cutting costs, particularly through layoffs, to juice profits...

"What's happened is a lot of U.S. companies have reached the limit of how much they can slash their workforce and work existing employees to the bone," said Nariman Behravesh, chief economist with IHS Global Insight in Lexington, Mass. "At some point, even weak spending growth will require businesses to hire more people to meet the demand."

In other words, employees are doing the jobs that used to be done by many more people. We have all made heroic efforts to keep things moving, but now we're simply burning out.