Most economists view productivity growth as being the key to rising living standards through time. The basic story of productivity in the post-war era is that growth was rapid in the years from 1947-1973, but then slowed sharply over the years from 1973-1995. Productivity growth then ticked up again in 1995 and has been relatively rapid since 1995.
While rapid productivity was largely passed on in the form of wage growth, one of the disturbing features of the economy over the last six years is that there has been virtually no increase in the wage of the typical worker. To some extent this is the result of upward redistribution � from low wage workers to high wage workers and labor to capital � but some of it has also been attributable to technical issues that distinguish changes in measured from productivity from changes in potential consumption.
After discussing this issue with my friend Jared Bernstein (co-author of the State of Working America) I decided to check the numbers.