Interest Rates Set to Rise While Wage-Growth Remains Cool
The average worker in the U.S. is over 245 percent more productive than the average worker in 1948, but only gets paid 114 percent more. Despite getting more done at work, the benefits of productivity stopped translating into a higher wage in the ’70s. Since 1973, productivity has grown over 6 times faster than pay.
Using 1948 as a baseline, the Economic Policy Institute compared hourly compensation and productivity on a year to year basis. Up until 1970, productivity and hourly compensation increased in lock step with one other, with increased productivity being reflected in increased hourly compensation. After the mid-‘70’s productivity soared, but, by comparison, hourly compensation stagnated.
This chart shows productivity growth and hourly compensation growth, 1948-2016.
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