US Workers Are Incredibly Productive, So Why Aren’t They Earning More? – Yahoo! Finance

Something to think about….

Seriously think about ….

Since 1978, productivity in the nonfarm business sector is up 86% but real compensation per hour is up just 37%. Is that fair?

That’s the question economist Alan Blinder asked in his Friday column in the Wall Street Journal. There are two levels to the conundrum: (1) Why is this happening and (2) What, if anything, should government do to fix it?

Let’s turn to the first question: If the US worker is making more stuff in less time, where is that productivity going if it’s not going to higher wages? For the answer, look at manufacturing. Our industrial production has grown by a factor of five since the 1950s (graph below). Over the same period, manufacturing jobs as a share of the economy have fallen from 25% to 11% in 2008. The difference is machines. Technology helps companies make more stuff, faster, for less money. It also replaces the need for workers. So in the last few decades, manufacturing has learned to produce much more stuff with fewer humans.

More:   US Workers Are Incredibly Productive, So Why Aren’t They Earning More? – Yahoo! Finance.