Journalists lack economic know-how

Sometimes it’s good to be a journalism major. Seeing stories like Carl Bernstein and Bob Woodward’s, which exposed the Watergate scandal, make me proud to one day be able to call myself a journalist. However, journalism frequently disappoints me, especially when it tries to talk economics.

Take a recent Associated Press article, “Productivity gains may be bad news for job seekers.” The article claimed that companies were going to hire fewer people because productivity has been going up, so fewer employees are needed, and therefore unemployment would go up.

Any economist, or for that matter any student who has taken an introductory macroeconomics class, can tell you that increased productivity is a good thing. It allows workers to be more productive without working as much. In fact, high productivity is one of the main factors that makes a country wealthy.

It seems like common sense that if companies become more productive, unemployment should go up because companies don’t need to rehire if they can produce more with their current lineup, but the fallacy in this is best illustrated with a story.

Let’s say Sally owns an ice cream company, and she buys a machine that can box ice cream for her rather than hiring someone to do it. This saves her so much money that the people who previously boxed ice cream were kept on to maintain the machine. She was even able to hire another scientist to figure out how to make her ice cream tastier.

And that’s not even the end of the story either. Now that she can make more ice cream with her new machine, this increases the amount of milk, sugar and boxes required. This would increase production in those industries too. These are the often overlooked benefits of innovation.

The second problem with this news story is that journalists think that labor is a good thing and that unemployment is bad. Whenever I get more leisure time to do things I want to do, I usually consider it a good thing. Sure, being unemployed can have its downfalls, but at the same time, we have to say it has its benefits too.

Compared to our great-grandparents, people today work much less. People in the early 20th century usually worked 80-hour work weeks on a farm or in a factory with horrible conditions. Increased productivity has allowed us to get out of these factories and into cleaner environments and shorter, better work days.

To the article’s credit, it did mention that productivity is mostly good for an economy and did interview economists about the issue. However, you wouldn’t know this until you got a few paragraphs into it.

Like I said before, journalism is a great thing but so is economics when applied correctly. Increased productivity making a society better off is almost as well understood in economics as the laws of gravity are in physics. Journalists need to get off the computers, do some research and ask a few economists before they make claims like this about the economy.

Michael Lauck is a sophomore broadcast journalism and economics major from Houston