Question

Chapter 12 discusses the resource markets, labor, and productivity. Can you discuss how productivity gains are the source of higher wages? What about some professions that don't demand special skills but still get higher wages year by year. What justifies that?

Answer 1

Answe

In America it was belief that pay wages and the benefit of worker or employees get better as the economy expand means they can earn more per hour of work and it was worked for almost 2 and half decades but after 1970 it has changed and this is not appropriate to sayb that with btter economy better wages and benefits will be provided . from the year 1979 to the 2018 , the net productivity according to the reports rised by about 69.6 % with stagnation on the hourly pay of the workers and it increased only by 11.6 % in 39 years after the adjustment made in the inflation .This is not a good news to hear. Now why tyhis is happening and how can we fix this issue . Look , the productivity rise provides the support for the growth substantially in the pay (wages and the benefits ) for vast majority.The income , wealth anjd wages have failed to trickle down over the loast four decades because of the choice of the policy which are made on the behalf of those who have most incomes, power and wealth .It has caused a exacerbated kind of inequality .The rise in this inequality has stopped the potential pay growth and resulting into wage stagnation.and we need to insitute -policies which can reconnet pay and the productivity and restore the work power like EPI first day fairness agenda policy.

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