Missing the Juice: What’s Happening with U.S. Productivity Growth? - Third Way

Missing the Juice: What’s Happening with U.S. Productivity Growth?  - Third Way

TAKEAWAYS

• Productivity is the key to achieving long-run economic growth and wage gains. It measures how effectively an economy uses a given amount of capital and labor.
• In general, U.S. productivity gains have slowed in recent decades.
• There are competing economic theories about why U.S. productivity growth has slowed and whether this shift is permanent.
• These theories run the gamut from a misallocation of workers to fewer new business starts to flagging public investment to a slowdown in new technology to the rise of income inequality.
• Each explanation leads to different policy solutions.