And TFP is a real monster of a formula[1]. It's not just GDP / hours. There's like 20 variables going into it's calculation, including things like 'labor quality' and 'capital's share of income' (alpha).
I'm not a smart man, but I think this suggests that a society that lays off factory workers and retrains them as software engineers will not register on this metric. And looking at alpha, there's a pretty clear phase change at 2000 -- it's hovering at 31-33 for 50 years, then marches up from 0.31 to 0.38. Sounds to me like you could tell a story that labor is more productive, but seeing less of the gains than before.
edit: just to belabor the point, here's a random chart I googled for US productivity that _doesn't_ feature the same trendline: https://tradingeconomics.com/united-states/productivity. If anything it looks like productivity has accellerated during the past 20 years.
I'm not a smart man, but I think this suggests that a society that lays off factory workers and retrains them as software engineers will not register on this metric. And looking at alpha, there's a pretty clear phase change at 2000 -- it's hovering at 31-33 for 50 years, then marches up from 0.31 to 0.38. Sounds to me like you could tell a story that labor is more productive, but seeing less of the gains than before.
edit: just to belabor the point, here's a random chart I googled for US productivity that _doesn't_ feature the same trendline: https://tradingeconomics.com/united-states/productivity. If anything it looks like productivity has accellerated during the past 20 years.
[1]: https://www.frbsf.org/economic-research/indicators-data/tota...