Question of the Day

In the U.S. over the past 70 years, has the average hourly compensation of workers generally risen at about the same pace as their productivity?

Correct Answer

Tell Me More

For the past 70 years, average labor productivity and hourly worker compensation have risen at about the same pace except for several years on both sides of the Great Recession. As documented by Harvard economics professor Martin Feldstein, "Two principal measurement mistakes have led some analysts to conclude that the rise in labor income has not kept up with the growth in productivity": (1) Failing to account for all forms of worker compensation. (2) Adjusting compensation and productivity for inflation by using different price indexes. Nonetheless, many media outlets and politicians have used these deceptive statistics to claim that the job market is not rewarding workers for their efforts. For example, Paul Krugman of the NY Times wrote: "The divergence between pay and productivity--a lot of productivity gains, almost total failure to trickle down--is one of the most striking features of American economics these past 40 (!) years."

DocumentationProductivity & CompensationBenefits & Compensation



Reload Question
Share via Facebook
Share via Twitter
Share via Email
Embed into your website
About the Fact App
Articles by Topic