Modest productivity gains in State Unemployment Insurance Service, (EXCERPT), Monthly Labor Review Online, January 1983

Modest productivity gains in
State Unemployment Insurance Service

Donald M. Fisk

Productivity, as measured by output per employee, in the State-operated Unemployment Insurance Service increased at about the same rate as in the private business sector during 1966-78.¹ Output in the Unemployment Insurance Service advanced at an annual rate of 8.6 percent, while labor input grew more slowly, by 6.6 percent, resulting in a productivity increases of 1.9 percent a year.² (See table 1.) There were considerable variations in year-to-year movements during the period. In more than half the years, productivity changes were greater than 10 percent. For example, in 1975, productivity increased 18.8 percent, while in 1976, it decreased 12.5 percent.

There were three distinct productivity cycles between 1966 and 1978: 1966-69 and 1969-72, when productivity increased 10.4 percent before falling, and 1972-78, when it jumped 11.7 percent before dropping. Output per employee rose sharply during the early part of each cycle, as output (work) increased faster than staff were added to process the output. During the latter part of the cycle, the opposite occurred—output decreased more rapidly than staff were reduced. However, staff cutbacks were substantial on the downside of each cycle, a phenomenon common in the private sector, but unusual in public operations.

Indexes of productivity trends and fluctuations for individual States showed greater movement than the national index. Trends for six illustrative States for 1972-79 reveal average annual rates of change ranging from 4.7 to -3.1 percent, and annual fluctuations ranging up to 25 percent.

This excerpt is from an article published in the January 1983 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.

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Footnotes

1 This study includes States, the District of Columbia and trust territories that operate unemployment insurance services. The industry is included as SIC 7361 and 9441 in the Standard Industrial Classification Manual, 1972.

2 All average annual rates of change are based on the linear least squares trend of the logarithms of the index numbers.

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