Talk about unintended results. It now appears that the quantum jump in unemployment or loss in jobs, depending on how you view it, has yielded the most unlikely result - productivity has grown by 10% in the last year. Yes, while many are losing their jobs and new comers find no work at all, it appears that those still in harness have improved their performance by an unprecedented increase.

Faced with sharp drops in demand, producers turned to cutting costs to maintain an even balance. This cost cutting resulted in the major loss of jobs. And the adjustments seem to have worked. Most companies are staying afloat and indeed posting profits, e.g. Ford Motors. But no one expected the increase in productivity.

There are several possible explanations for this phenomenum. One would be that there was too much padding in the work force, with too many being hired to do the job. The recession simply allowed for trimming this excess labor weight. Another would be that those still working are working even harder to keep their job. Still another would be that the recession forced many producers to further automate their operations. Perhaps the answer is a combination of all three.

Whatever the answer, the sharp increase in productivity promises to make it even harder to bring back full employment. If demand does not grow faster than it is doing at present, the increase in productivity will more than cover any need for more labor. In fact this high an increase will be able to cover a modest uptick in demand without having to hire on more people.

While the negative impact of the increase in productivity on job growth is bad enough, an even more sobering thought is that it would appear as though the prospect of losing your job is a better inducement to higher productivity, than higher pay.