That’s the very definition of efficiency, or productivity as economists like to call it.

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That’s the very definition of efficiency, or productivity as economists like to call it. A picture of dramatic growth in labor productivity for plastics over the last eight years is one of the revelations to be found in the fascinating mass of data titled The Size and Impact of the U.S. Plastics Industry, published in March by the Society of the Plastics Industry. (Find it online at www.plasticsdatasource.org.)
In the table below, the number of plastics processing plants shrank 15.3% from 1997 to 2005, and the number of production workers declined by 13.4%. At the same time, the dollar value of products shipped grew 29.2%. The really interesting numbers are the value added per production worker, which increased 37.6%, and the value of shipments per production worker, which grew 45.2%. Presumably, that increased productivity was purchased by investing in technology to replace labor. You can see who’s investing the most by looking at the last column.

By the way, “value added” means the value of shipments minus the cost of raw materials and purchased components. Curiously, value added as a percentage of shipments actually shrank from 1997 to 2005. That would not seem to be a good thing, since value added is what customers pay for. Perhaps this is the true cost to processors of the recent run-up in materials prices.