Minimum wage would be $26 an hour if it had grown in line with productivity

Re:Minimum wage would be $26 an hour if it had grown in line... by runako on Tuesday September 14, 2021 @04:22PM (#28530543)

This represents a fairly common misunderstanding of "productivity" as used by economists, as in this story. In economics, labor productivity is simply the output per unit of labor. A common metric is revenue per hour worked.

How does this fit into the discussion here? If a company earns 10% more in inflation-adjusted currency this year than last year, but headcount has increased < 10%, by definition the staff was more productive this year than last.

It's fairly easy for anyone to apply this calculation to the economy as a whole, or to a given subset. Find total revenue in period X and total revenue in a later period Y and the corresponding # of employees, and you can determine whether and how much productivity increased.

Objection: "but the minimum wage earners are not more productive, everyone else is driving the productivity gains." You can run the calculation on any low-wage industry you want, you will likely see roughly similar results.

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Re:Minimum wage would be $26 an hour if it had grown in line... by jkhdigital on Tuesday September 14, 2021 @08:54PM (#28533718)

Yeah… for economists “productivity” is simply an aggregate quantity, kind of like “velocity of money”. It is doubtful one can say anything intelligent about “real” productivity of individual workers based on this number alone.

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