I’m Mary Walden, with economist MW, welcoming you to the economic perspective. Today’s program looks at productivity pushing the economy. Mike, productivity measures how much output businesses get from their inputs, with the most important being labor. In recent years productivity improvement has slowed. But in the last two years productivity gains have accelerated. Why has this occurred, and why is it important?
- Most economist link gains in productivity to businesses making more investments in new machinery and technology – enables workers to do more
- Further, some link this to the 2017 tax cuts
- Important for two reasons
- One – gains in productivity allow economy to grow faster without generating inflation
- Two – if workers are more productive, they will be paid more – and this is happening (3% annually)
- I’m MW
Mary: And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.