Productivity/compensation gap

There is a new essay detailing the gains in productivity outpacing the gains in compensation. No surprise the trend has accelerated since about 1970.

Can unions save the middle class? Doubtful

The Economic Policy Institute says the answer is simple: higher union density is needed to preserve the middle class. One blogger takes on the logic. Productivity declines is not the problem, but marginal performers will suffer job losses.

Third quarter productivity grows at 8.1%

Update: The Bureau of Labor Statistics released revised third quarter statistics last week. Getting a lot of press was the eye-popping October 10.2% unemployment rate which declined to 10.0% for November. But the real eye-popper is the fact that Nonfarm business sector labor productivity increased at an 8.1%  increased at a 9.5 percent annual rate. You have to go all the way back to the third quarter of 2003 to find a better rate of growth (9.7%). I'm no economist, but productivity normally does not increase during a recession. Employers tend to be slow to "downsize" their most valuable employees rendering certain built in inefficiencies of production. But not this time. Over the last year, output increased 4% while hours worked decreased 5% and unit labor costs declined 3.6%. Historical data provided here, and third quarter details and charts here.