Image source: New York Times
According to Neil Irwin, senior economic correspondent for The Upshot at the Times:
From 2011 through 2015, the government’s official labor productivity measure shows only 0.4 percent annual growth in output per hour of work. That’s the lowest for a five-year span since the 1977-to-1982 period, and far below the 2.3 percent average since the 1950s.
Productivity is one of the most important yet least understood areas of economics. Over long periods, it is the only pathway toward higher levels of prosperity; the reason an American worker makes much more today than a century ago is that each hour of labor produces much more in goods and services. Put bluntly, if the kind of productivity growth implied by the new data published Thursday were to persist indefinitely, your grandchildren would be no richer than you.
James Pethokoukis, a columnist and blogger at the American Enterprise Institute, highlighted the chart in an op-ed and argued that “productivity growth has flatlined.”
“This is not good,” Pethokoukis added. “Without fast rising productivity growth, you aren’t going to get fast rising living standards.”
Pethokoukis argued that lawmakers should “start obsessing about innovation policy.”
“What should government be doing more of/less of to create a better ecology for invention and innovation?” Pethokoukis wrote.