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  • Writer's pictureGerd Weyer

How Productivity Affects Society

The opportunity to pursue happiness, or time for leisure and capacity to consume, increases with productivity. Over the long term, per capita growth occurs because of productivity gains or when people produce goods or services in less time.

The structure of society changes with productivity improvement, and individuals must make sacrifices when this occurs. In 1800 it took a person a day to cut an acre of wheat. Today, with the use of modern combines, an acre of wheat can be cut and threshed in approximately four minutes. Many farmers lost their jobs or farms during the transition to modern agriculture. When machines replace labor, people lose their jobs, productivity tends to increase, work changes, the production of goods and services increases, and combined income from wage, profit, and government social programs expands. The demand for goods and services increases when people buy more because of increased pay, and businesses hire to meet the rise in demand.

Per capita economic growth requires sacrifice. Some businesses gain market share when productivity improvements make them more competitive, and other companies close. People lose and find new jobs, and the structure of society changes in the process.

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