New York Times contributor Tyler Cowen takes a closer look at the recent stagnation of American middle-class wages, and whether that may be influenced by a slowdown in productivity growth.
According to recent data, labor productivity has been growing at just 1.3% annually since early 2005, compared with 2.8% annually in the preceding 10 years. In a National Bureau of Economic Research working paper, Chad Syverson, a professor of economics at the University of Chicago Booth School of Business, outlines a response to the inconclusive debate of whether or not information technology systems are providing benefits that are overlooked in standard measurements of wages and productivity.
Professor Syverson notes that a slowdown has come to dozens of advanced economies, more or less at the same time, which indicates it is a general phenomenon. Furthermore, the countries with smaller tech sectors still have comparably sized productivity slowdowns, and that is not what we would expect if a lot of unmeasured productivity were hiding in the tech industry.