In case you missed it, there’s a chart making the rounds that has come to represent, for some, all that is wrong with the American economy.
The top line shows worker productivity growing by 72.2%, or 1.33% per year, between 1973 and 2014. The bottom line shows median workers’ hourly compensation increasing by 9.2%, or 0.2% annually, over that same period. The gap between them more or less symbolizes the big empty space in workers’ wallets.
The chart, part of a broader research series from the left-leaning Economic Policy Institute, has struck a chord. Hillary Clinton tweeted a version of it following her first major economic policy speech in July, and has clearly leaned on EPI research in calling for policies that boost wages.
But the chart—and its data, methodology and conclusions—has become a flashpoint.
How one interprets the mass of historical data we have on workers’ productivity, wages and growth has profound consequences for which economic policies one might pursue. Most economists agree that productivity is essential for raising living standards, and that the superrich have seen their incomes skyrocket. The devil is in the details.
View Article