From my work blog:
In the late 1970s a gap opened up between the productivity of workers, and the amount they were being paid. The not-so-creative name for this trend is the wage-productivity gap. The causes are hotly debated, but the consequences are straightforward. The economy continues to grow through increases in productivity, but the benefits of increased productivity are not shared by workers. This means real wages stagnate, and inequality increases. It also calls into question the justice of a system in which the production of workers is divorced from the wages of workers. The Bureau of Labor Statistics has put together a visual essay on wage-productivity gap.
In chart 1 we see the rate of change in productivity growth compared to the rate of change in real (inflation-adjusted) hourly compensation (1). Chart 2 breaks down the trend by selected time periods. We can see that from 1947 to 1979, wages and productivity…
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