Explore BrainMass

Productivity of labor and increasing wages for workers

During the economic expansion of the late 1990's, wages increased significantly for all types of workers. One possible explanation for this (other than favorable economic conditions which have increased the demand for labor) is that the productivity of labor has increased more rapidly over this time period. How is the productivity of labor connected to the real wage? Why should you, as a future worker, be concerned about the downward trend in labor productivity increases that have been observed since the early 1970s?

Solution Preview

Productivity of labor is directly connected to the real wages of the worker. If the labor is more productive, more output can be produced, and therefore, the real wage goes up. Due to massive computerization and leaping technological innovation, the productivity has gone up several times. A labourer who ...

Solution Summary

Productivity of labor is explained.