Where Did the Productivity Growth Go? Inflation Dynamics and the Distribution of Income

摘要

The first half of this decade has witnessed a sharp contrast between strong output and productivity growth, on the one hand, and slow employment and median income growth, on the other. The strong growth in output combined with weak growth in hours worked has resulted in an explosion in labor productivity growth, implying an underlying trend that is rising faster than in any previous subperiod of the postwar era. Yet who received the benefits? Median household income actually fell by 3.8 percent from 1999 to 2004 and grew from 1995 to 2004 at a rate of only 0.9 percent a year, a much slower rate than that of nonfarm private business (NFPB) output per hour over the same period, at 2.9 percent. Similarly, the median real wage for all workers grew over 1995-2003 at an average rate of 1.4 percent a year, less than half the rate of productivity growth.