What’s causing the productivity slowdown? The subject is controversial among economists, and many different answers have been proposed. Some have argued that it’s merely that existing productivity measures don’t do a good job measuring the impact of new technologies. Our argument here suggests a different explanation, that diminishing returns to... See more

2. Impact on Labor: • Stagnant Wages: Despite increases in productivity, wage growth for average workers remained relatively stagnant, leading to a growing income inequality gap.

• Decline of Labor Unions: Union membership declined, reducing the collective bargaining power of workers to negotiate better wages and benefits.

• Offshoring and Outsourcing:

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One myth is that American manufacturing has been devastated by trade. The evidence for this is the decline in the American work force engaged in manufacturing production work, from somewhere over 30 percent of American workers in the middle of the twentieth century to somewhere around 5 percent today.

But counting workers is the wrong metric.... See more