Virginia Postrel thinks that “[e]veryone should read David Brooks’s Friday NYT column” on FedEx and productivity gains:
But it’s really all about the scanners, the little cross-hatched red beams of light, like at the supermarket, that register each package’s bar code at least a dozen times during its overnight trip. The scanners mean that customers can check the progress of their packages over the Internet. Plant managers can monitor the nightly flow and prevent bottlenecks. FedEx can manage this gigantic business and still have accessible information on each individual item.
One employee told me that when he started work at the company 17 years ago, he marked individual packages with crayons. But FedEx has participated in the productivity surge that has been reshaping the American economy. If you were obsessed with the political campaign over the past year, you would have gotten the impression that there’s no such thing as a service sector of the economy ? it’s all manufacturing ? and that the U.S. is getting trounced by China and India in the competition for global business.That’s a distorted view of reality. Since 1995, the U.S. has enjoyed a productivity renaissance. The McKinsey Global Institute breaks the economy down into 60 sectors. U.S. workers are the most productive on earth in at least 50 of them. Productivity gains cause standard of living increases. Productivity gains lead to employment gains. If history is any judge, yesterday’s excellent job numbers could mark the beginning of another surge in job creation.
As William W. Lewis, a former McKinsey partner, writes in “The Power of Productivity,” about half the U.S. productivity gains have occurred in just two sectors, wholesale and retail trade. We’ve gotten really efficient at getting stuff from the hands of manufacturers to the hands of consumers. These innovations have had more important effects on how people really live than anything done in Washington.