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Has the average hourly compensation of U.S. workers generally risen at about the same pace as their productivity for the past 70 years?

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Contrary to the claims of many politicians and journalists, U.S. average labor productivity and hourly worker compensation have generally risen at about the same pace for the past 70 years. As documented by Harvard economics professor Martin Feldstein, the false narrative that "labor income has not kept up with the growth in productivity" stems from "two principal measurement mistakes": (1) Inflation-adjusting the data on compensation and productivity by using conflicting measures of inflation. (2) Failing to account for all forms of worker compensation. Many people have used these deceptive statistics to allege 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



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