What Cost More in 2008: The Financial Bailout or Multitasking?

The financial bailout, but just barely.

Financial bailout: $700 billion.

Lost productivity due to multitasking: $650 billion per year.

That number is from The Myth of Multitasking: How “Doing It All” Gets Nothing Done:

2.1 hours: Average estimated lost productivity per person per day due to interruptions, based on a 40-hour work week.

$650 billion: Estimated annual loss to the US economy due to unnecessary interruptions plus recovery time.

If you move beyond the time frame of a single year, however, you see that multitasking is actually far, far more expensive than the financial bailout.

For the financial bailout was a one-time thing. Multitasking costs $650 billion every single year. So, after ten years, we have this:

Financial bailout: $700 billion

Multitasking: $6.5 trillion

Even if a second bailout were necessary, or the cost of the bailout went up, the cost of multitasking still far outstrips the potential cost of the bailout over a ten year period.

Add to this the fact that the bailout probably prevented damage to the economy that far exceeded $700 billion (I realize that there is difference of opinion there), and you have even less of a contest.

January 22, 2009 | Filed Under Productivity | 2 Comments

Comments

2 Responses to “What Cost More in 2008: The Financial Bailout or Multitasking?”

GFish on January 24th, 2009 10:35 am

$650 billion, really? How is this calculated? I see these articles all the time – March Madness costs companies $100 billion dollars in “lost productivity.” Smoke breaks cost companies $10 billion in “lost productivity.” Does going to the bathroom cost companies $100 billion dollars in “lost productivity?” Do these researchers expect everyone to be “productive” all 40 hours of the work week, with no time for breaks… which actually can help increase real productivity.

Is this lost productivity calculated by the person’s hourly rate times the number of hours “lost.” So if a person make $20/hr and interruptions cost 2 hours of his or her day, the company loses $40? I’d argue that it does not actually lose that money. It just takes the person longer. The work still has to get done at some point. It just gets done the next day or later.

However, if we never interrupted people, then we and they could get more done sooner, so that the company would need LESS people to do the same amount of work… thanks to the new-found time savings. So in that sense yes the company saves money… by terminating people. So does “lost productivity” equate to OVER-employment? (Not exactly a positive outcome for the workers…)

Now I’m not trying to justify being unproductive at work. I’m just trying to think through how these statistics work. What exactly is “lost productivity?” And is it really quantifiable in a dollars per year calculation?
Matt on January 26th, 2009 9:26 pm

Good thoughts to raise. It’s useful to think through things like this. Some quick thoughts:

I think that most expectations are that people are productive only 6 hours a day. That’s a good and realistic assessment: People have to take breaks, get settled in, talk with co-workers, etc.; they aren’t machines that just crank out productivity for 8 hours straight.

I think that hours lost (beyond the typical “burn rate”) multiplied by hourly wage are how the economic cost is typically quantified. However, I would agree that those 2 burn rate hours every day should not be factored as economic loss. They are essential to getting the 6 productive hours.

Now, if the result is that the work gets done later, I would say that there is still less work that gets done in that time frame. Which means that there are other things that didn’t get started that would have. If we extend out to infinity, then yes everything will get done all the same. But you have to put a time frame on these things. So there is less done this year. Then next year, when it happens again, less is done. And etc. So the costs are real. Even if the employees simply put in overtime because of an amorphous need to “get caught up,” those are real costs.

Now, in the case that employees get more done sooner — that is, become more productive — that is actually not bad for the employment level. Increased efficiency is how society advances economically. There is not some limited amount of work out there that needs to be done. So if job X is completed more efficiently, and so only 3 people are now needed instead of 4, it’s not that there is no work for that fourth person to do now.

Rather, it’s that now that fourth person is freed up to pursue another job which could not have been pursued before because society had to fill N number of slots in job X. Now that job X takes less people, more people can be devoted to new work that could not have been pursued before. For example, as farming become more efficient, the result was not that we ran out of work, but that whole new industries grew up and advanced — to the point that now most people are knowledge workers because they don’t have to spend their days making a living off of their land.