07/27/2017

What Will Fix the Productivity Problem?

How to determine whether productivity is a result or cause of poor economic growth

American businesses are doing a terrible job at making their workers more productive.

Productivity growth is the weakest it has been since the early 1980s — only 0.8 percent a year over the last half a decade, compared with 2.3 percent on average from 1947 to 2007. This is the root cause of slow growth in both G.D.P. and worker pay.

At least, that is the standard way of thinking about productivity and its relationship to the economy. In a mainstream view, productivity is a kind of magic force that helps explain rising output. New labor-saving inventions come along or new management practices are taken up that miraculously allow companies to produce more output with fewer hours of work.

Please click here to read the complete article from The New York Times.