Skip to main content
Is Twitter Making Us More Productive?

This is In Real Terms, a column analyzing the week in economic news. Comments? Criticisms? Ideas for future columns? Email me or drop a note in the comments.

More Economics

Here’s how the process of writing this column usually goes: On Monday and Tuesday, I collect potential material — articles, data, academic research — and on Wednesday, I pick a topic. Then I have to start writing, at which point my productivity plummets. I write a sentence; I check my Twitter mentions. I rewrite that sentence; check again. I finish a paragraph; I pick a Twitter fight that occupies me for the next half-hour. Typically I buckle down and start writing in earnest around midnight, which, not coincidentally, is about the time that most of the people I follow stop tweeting and go to bed. (For the record, I checked Twitter 12 times during the writing of this paragraph alone.)

My tendency toward procrastination aside, it would seem the Internet is not good for my productivity. It certainly provides plenty of distractions. But it also provides access to a wealth of information that would be much harder to find otherwise, if I could find it at all. Technology’s impact on my efficiency is debatable, but the impact on the quality of my work is clearly positive — this column couldn’t exist without the Internet. How should we account for that?

That question — how to measure technology’s effect on productivity, the economy, and well-being more broadly — is at the core of a major debate in economics right now. Productivity — in its simplest form, total economic output (gross domestic product) divided by the number of hours people work to produce it — is the central driver of economic growth and a reliable measure of a society’s prosperity. The ability to make more stuff with less work is what allows nearly every American to own things — cars, televisions, smartphones — that would have been unimaginable luxuries in an earlier era. Yet by conventional measures, U.S. productivity has been in a slump for a decade — some fear permanently.

Many people in Silicon Valley, though, are skeptical that the productivity slowdown is real. How could it be? We all carry supercomputers in our pockets. We have every map of every neighborhood at our fingertips. We can order pizza from our phones! (OK, we’ve been able to order pizza from our phones for a long time. But now we can do it without talking to anyone.) Some of those tools are directly useful for work, but even the ones that aren’t help us use our time more efficiently — which, somewhere down the line, should show up in official productivity statistics. If it doesn’t, they argue, that’s only because aren’t measuring productivity right.

In a new paper being presented at the Brookings Institution on Friday, economists David Byrne, John Fernald and Marshall Reinsdorf look at the Silicon Valley argument and firmly reject it. It’s true, they say, that official statistics underestimate the impact of technology on economic output. The government routinely understates gains in computing power, for example. But that was also true in the 1990s and early 2000s, before the productivity slump began. In fact, they argue, if we fully accounted for the impact of technology, the recent slowdown would look even worse than it does in the official statistics.

There’s plenty of room to quibble over whether Byrne & co. have accounted for the full impact technology has had on GDP. But the debate between economists and Silicon Valley is only partly about measurement. It’s also about what we’re trying to measure. I don’t use Twitter because it makes me more productive. I use Twitter because I enjoy Twitter. Similarly, a billion people a day use Facebook because they enjoy Facebook (or at least find it useful). Consumers have decided that they derive value from these products, but because they don’t pay for them, that value isn’t captured in GDP.

The authors of the Brookings paper dismiss this free enjoyment as a “non-market” benefit that is rightly excluded from economic measures. But if the ultimate goal of measuring the economy is to understand people’s welfare, why should it matter whether any money changed hands? Or as University of California, Berkeley, economist Brad DeLong put it this week: If our definitions of output and productivity ignore something that people have decided improves their welfare, that “is an indictment of those measures.”

Even if we could come up with a way to measure welfare more generally, though, the productivity slump wouldn’t necessarily disappear. In a massive new book “The Rise and Fall of American Growth,” economist Robert Gordon argues that our economic statistics hugely undercount the welfare gains of the 19th and 20th centuries. GDP didn’t capture how much better it was to walk on streets that weren’t covered in horse manure or how much more pleasant the summer is with air conditioning. Compared to the invention of indoor plumbing, electricity and the internal combustion engine, Gordon isn’t impressed by Facebook or even the iPhone.

“Yes, we are ‘gigantically’ ahead of where our counterparts were in 1870, but our progress has slowed,” Gordon writes. That’s more than a measurement problem.

The robots are coming?

When technology isn’t destroying our productivity, it’s destroying our jobs. Or so you’d believe from the seemingly endless stream of “the robots are coming!” stories published in recent years. So far, though, Americans don’t seem too concerned.

According to a new poll from Pew Research Center, roughly two-thirds of Americans think that in 50 years, robots “will do much of the work currently done by humans.” But an even larger majority believes their own jobs will exist a half-century from now. Only 11 percent of respondents said they were worried about losing their job to automation, far fewer than said they were worried about bad management (26 percent) or about their company finding someone else to do the work for less (20 percent).

Those results might seem like a contradiction, or at least like wishful thinking. But there’s a difference between “work” and a job. Technology quickly changes the way we work — quick, when was the last time you sent a fax? — but it destroys jobs much more slowly. It took 40 years after the invention of the ATM for bank-teller jobs to start disappearing, and automated checkout lanes haven’t yet made a dent in the number of cashiers.

(Global) recession watch

Recession fears in the U.S. have eased a bit in recent weeks thanks to a strong jobs report and other solid economic data. The rest of the world is a different story, though. In a speech in Washington on Tuesday, David Lipton, the No. 2 official at the International Monetary Fund, warned that the global economy is at risk of “derailment.” Quoting Winston Churchill, he warned policymakers not to be complacent.

Perhaps Mario Draghi was listening. Draghi, the president of the European Central Bank, on Thursday announced stronger-than-expected measures to jump-start the moribund European economy. The bank cut interests rates, already below zero, even further into negative territory and said it would step up its purchase of bonds. Markets initially cheered, but some experts wonder: If this doesn’t work, what does Draghi do then?

Number of the week

Men in Korea get up to 53 weeks of paid paternity leave — but hardly any of them take it. For every 1,000 Korean babies born in 2013, just eight men took any paid parental leave at all, according to data from the OECD.

Tuesday was International Women’s Day, so why focus on dads? Because research shows that paternity leave is in many ways just as important for women’s equality as maternity leave. If women are the only ones to take time off after having a child, companies are more likely to push women — even women who don’t plan to have children — onto a second-tier “mommy track.” That’s less true if both men and women are likely to take time off. Merely offering men leave isn’t enough; men have to take the time, or else employers will continue to treat women differently. Iceland, for example, separates paternal and maternal leave so that men who don’t take time off lose the benefit; today, close to a third of all parental leave in Iceland is taken by men. Iceland also ranks at the top of the World Economic Forum’s gender-equality rankings. The U.S., the only rich country that doesn’t offer paid time off for either parent, ranks 28th.


Emily Badger explains why the poor pay more for toilet paper and what that reveals about poverty in the U.S.

Anne Quito says sexism is holding back female architects.

James Ledbetter asks whether the rise of index funds and similar investments is hurting the economy. (Answer: maybe!)

Former Minnesota Fed President Narayana Kocherlakota argues the Federal Reserve needs to communicate its plans more clearly.

Ben Casselman is a senior editor and the chief economics writer for FiveThirtyEight.

Filed under , ,

Comments Add Comment