Why Labor Productivity is Low: A Pictorial

In response to recession, Debt Service (blue) falls and Productivity (red) rises:

Graph #1: Productivity shown in red.  Debt Service shown in blue.

The post-recession increase in labor productivity is reliably brief.

During the expansion, Productivity and Debt Service both increase:

Graph #2: Productivity shown in red.  Debt Service shown in blue.

Productivity (red) runs low when Debt Service is high, because financial costs interfere with growth:

Graph #3: Productivity shown in red.  Debt Service shown in blue.

Productivity runs high when Debt Service is low, because financial costs interfere less:

Graph #4: Productivity shown in red.  Debt Service shown in blue.

There is a listless transition between falling and rising Debt Service. Productivity is low during the transition:

Graph #5: Productivity shown in red.  Debt Service shown in blue.

We are in a transition now that will soon give way to a more vigorous economy. Debt Service is beginning to increase, and productivity will soon be on the rise.