Question

What is the productivity growth rate right now in the Unites States? Explain why it is as low as it is.

Answer 1

The productivity rate growth rate in the US dropped by 0.39% in March 2020, compared to the growth of 1.06% in the previous quarter. As we know that the US productivity growth rate is updated quarterly.

The reason why productivity growth has been declined is because of the economic problems faced by the nation. The productivity growth rate is one of the major determinants of future standard of living. If the efficiency of the resources used rises to 2.5% per year then people can expect their wage and the standard of living to be doubled every 28 years or we can say once a generation. Productivity growth of 0.5% means that children can expect their standard of living only 15% higher than those of their parents. If we talk about productivity growth from the past it has declined from an average annual rate of 2.5% over the past years. Many researchers are trying to identify the reasons for the decline of productivity from the past years but still no one has discovered the silver bullet yet. All the researchers end up concluding a variety of factors such as the effects of the changing composition of the labor force or due to the less experienced workers.