Increased productivity no longer has an affect on raising wages, because all the gains go to the top — and the decline of labor unions plays a big part; as well as a tax code that Congress has skewed to mostly favor the very wealthy and large corporations.
Jared Bernstein, former economic adviser to Vice President Joe Biden, recently writes:
Labor Productivity is still squeezing the middle class to death. Labor Productivity rose 3.6% in Q1 2010 after an astonishing 6.2% jump in Q4 2009. Output increased 4.4% and hours worked increased another pathetic 0.8%, annual rate. Hourly compensation increased 2.3%.
For the year labor productivity increased 6.1% and hours worked fell 3.0%.
This gain in productivity from the same quarter a year ago was the largest since output per hour increased 7.0 percent over the four-quarter period ending in the first quarter of 1962.
Think about bad trade deals, offshore outsourcing, insourcing (or bringing in cheap labor, undercutting U.S. workers wages and jobs). There is no way this is due to your iPhone or advances in technology, which is the common blow off response from economists.
Below is productivity, compounded against last quarter percent change:
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
Recent comments