Rising Productivity

AP has a story: “Productivity gains may be bad news for job seekers“:

Productivity rose at an annual rate of 9.5 percent in the July-September quarter, the Labor Department said Thursday. That was much better than the 6.4 percent gain economists had expected. Unit labor costs fell at a 5.2 percent rate.

Then it goes on to include this obligatory statement of economic dogma:

Productivity is the key ingredient to rising living standards. It lets companies pay their workers higher wages.

That has been true historically, but I think things are changing. “It lets companies pay their top executives higher wages” might be more accurate. Few if any of those gains are going to flow to average workers, and the most important reason for that is advancing automation technology.

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