The latest data show that U.S. worker productivity increased at a 3.2 percent year-over-year rate in the first quarter after rising 2.9 percent in the fourth quarter of 2007 and 2.8 percent in the third quarter. Why is this encouraging? Economist Jim Glassman over at JPMorgan Chase tells us why (bold is mine):
There is a common perception among Americans that something bad is going on that is eroding our living standards. This is pure poppy kapoodle. Productivity is the key to rising living standards... it is a fundamental law of nature. It is how we in the West rose from poverty to the high living standards we enjoy today during the Industrial Revolution and it is why others around the world are trying to do the same. It is through productivity growth, not protectionism, that we in the West can best boost our living standards amid a more competitive global economy.
My take: Every presidential debate should feature multiple questions on what the candidates think needs to be done to increase innovation, productivity, and growth. Every problem America has is harder to deal with if we fail to maximize all those things.
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