Worker Productivity Growth Hits New Low - What Can Be Done?
1. Worker Productivity Growth Weakest in Over 50 Years
2. How to Reverse the Trend of Falling Productivity Growth
3. What President Trump & Congress Should Consider
4. Conclusions – We Can’t Let This Trend Continue
President Obama is spending his last days in office trying to shore-up his “legacy.” He emphasizes that he inherited the worst economy since the Great Depression and most analysts would agree that is true for the most part. Mr. Obama also claims that his policies saved America from another depression and led to one of the longest economic recoveries on record.
Of course, we all know that this recovery, which began in mid-2009, has been the weakest post-recession economic rebound since World War II. There has been much speculation on why this recovery has been so anemic. Conservative critics routinely blame Obama’s big government tax, spend and overregulation policies.
While President Obama’s liberal policies have contributed to slower economic growth, most respected analysts agree that we have a much more serious problem that started long before the current occupant of the White House took office. That is the long-term decline in worker productivity growth which will not be easy to reverse.
Growth in worker productivity has been declining for decades, and this year it is close to zero for the first time since such records have been kept. While there is not widespread agreement among economists as to what exactly is causing this troubling trend, today we’ll look at some of the most likely causes.
If President-elect Trump is serious about boosting the economy, and I believe he is, he must address this foundational problem of falling worker productivity growth. As we go along today, I will discuss some of the leading ideas for reversing this serious trend. Let’s get started.
Worker Productivity Growth Weakest in Over 50 Years
As illustrated in the chart below, growth in US worker productivity peaked in the late 1960s when it was briefly above 3%. While there have been ups and downs along the way, the trend has clearly been lower. And since 2007, the trend has been sharply lower. Worker productivity growth in 2016 has fallen to only 0.5%, a fraction of what it was in the late 1960s.