Behind the Gap Between Productivity and Wage Growth
AbstractMuch has been written in this business cycle regarding the rapid increases in productivity and the stagnant growth in wages. From the peak of the last business cycle in the first quarter of 2001 to the second quarter of 2006, productivity increased by 17.9 percent, an average growth rate of 3.2 percent per year. But real wages have barely moved, with the average hourly wage for production and nonsupervisory workers increasing by just 1.2 percent, an average annual growth rate of just over 0.2 percent. This report explores the forces behind this difference. It looks at cyclical trends in labor and capital income, and the difference between gross and net productivity.
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Bibliographic InfoPaper provided by Center for Economic and Policy Research (CEPR) in its series CEPR Reports and Issue Briefs with number 2007-05.
Date of creation: Feb 2007
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Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
This paper has been announced in the following NEP Reports:
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- Areendam Chanda & Bibhudutta Panda, . "Unbalanced Productivity Growth in US States: Evidence from Factor Prices," Departmental Working Papers 2012-04, Department of Economics, Louisiana State University.
- Areendam Chanda & Bibhudutta Panda, . "Productivity Growth in Goods and Services across US States: What can We Learn from Factor Prices?," Departmental Working Papers 2011-16, Department of Economics, Louisiana State University.
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