> Now, if you think that a massive social transformation is underway of non-GDP-registering activities to GDP-registering activities -- e.g. people used to care for their grandmas, now all those people have gotten jobs to pay for care assistants to do it instead -- then yes GDP will show "false growth" in productivity. But that really doesn't seem to be a major factor.
But isn't that the issue?
Before: one working-age person in the household worked part time, or did not work at all. She (it was usually a she) could get the kids off to school, pick them up after school, check in on grandma, do the shopping, cook a simple meal.
Now: the working-age person goes to work, perhaps because the family fell apart, perhaps because other rising costs (e.g. health care) forced it. Before and after school care is paid for. Someone is paid to check in on grandma. Walmart+ or Amazon occasionally delivers heat-and-eat meals.
GDP went way up! Amazon contractor has a job delivering boxes. Someone is paid to check in on Grandma, and someone else to watch the kids. Someone works in the factory making heat-and-eat meals.
But are we really better off? Is it better to staff out the kid- and Grandma-watching and to heat up a dinner in the microwave? I'm not sure anyone knows the answer to that question, but I'm certainly not sure that "we really are seeing massive amounts of innovation in the economy that improve people's lives."
I've got two young kids in full-time daycare. Our daycare is crazy expensive. We tried the route of one parent stay home to be a caregiver this year. In the end, our kids weren't continuing on the same trajectory as what they were when they were in daycare. One child continued on part-time at the daycare doing a two day a week schedule and was noticeably falling behind his peers in his education and socializing. Not for a lack of us trying, my wife was very active in trying to be with both kids. But two very young children can be quite demanding. And in the end our house was messier (kids tearing everything apart all day long versus just a few hours), we still had pretty much the same diet, my wife was more tired and frustrated at the end of the day, etc.
My wife is back to having a wage, and both kids are back to full-time daycare. They both really enjoy school. And comparing them to their peers who stay at home, they're usually way ahead when it comes to counting and numbers, vocabulary, spelling, reasoning, and social skills. Which I mean makes sense, they're around people who got degrees in education with professionally thought-out lesson plans every day.
But has this changed massively over the past 30 or 40 years? Not really.
Frozen dinners have been around since longer than most of us have been alive. Working couples in the 1980's were figuring out what they'd do with grandma. Nursing homes have been around for a looong time. Mail-order delivery of boxes has been a thing since the end of the 1800's -- there were Sears warehouses long before Amazon warehouses.
That's all I'm saying. However, employees genuinely are much more productive than they were in the 1980's, thanks to e-mail and cell phones and the Internet and collaborative online document editing and so much more. You can get things done in an hour that used to take you 2 weeks of back-and-forth.
The productivity growth is real. It's not an illusion based on what GDP doesn't capture.
But isn't that the issue?
Before: one working-age person in the household worked part time, or did not work at all. She (it was usually a she) could get the kids off to school, pick them up after school, check in on grandma, do the shopping, cook a simple meal.
Now: the working-age person goes to work, perhaps because the family fell apart, perhaps because other rising costs (e.g. health care) forced it. Before and after school care is paid for. Someone is paid to check in on grandma. Walmart+ or Amazon occasionally delivers heat-and-eat meals.
GDP went way up! Amazon contractor has a job delivering boxes. Someone is paid to check in on Grandma, and someone else to watch the kids. Someone works in the factory making heat-and-eat meals.
But are we really better off? Is it better to staff out the kid- and Grandma-watching and to heat up a dinner in the microwave? I'm not sure anyone knows the answer to that question, but I'm certainly not sure that "we really are seeing massive amounts of innovation in the economy that improve people's lives."