More Productive AMERICANS

The increase in American productivity has not benefited the average worker, but has instead increased the pay and benefits of CEOs and board members.

By doing this, the greed at the top only hurt themselves, because it's the middle class that keeps our economy humming along in the US. Consumer spending represents over 70 percent of the American economy; salaries are barely keeping up with the inflation rate according to the Department of Labor.

By depressing the middle class buying power, US productivity suffers, because we are less able to buy American-made products. Americans are relegated to buying imports from China - more and more.

C I
I know that American workers are highly productive.
Productivity had not brought wealth and happiness to American workers.
Productiivity per person is high whereas productivity per hour by the same person in USA is not that high.
Why?

Rama, I think it's because most of our productivity increases can be credited to automation and the electronics industry that produces high gross margin products and services. Other industries that can utilize automation and computers also benefit.

absolutely, cicerone- we bettter be the most "productive," we have the least vacation days available to us.

we could be more productive still if we brought back the plantations- and desegregated them... that seems to be the culture this "study" is celebrating.

Not only does it decrease spending, but people are starting to get pissed off and therefore will ultimately become less productive (I'm guessing).

Re: More Productive AMERICANS

So if the average productivity of the American worker is $64k/yr, what do you expect the average salary should be? Remember that some of that money must be used to pay for capital (equipment and buildings) and raw material. So what do you think a fair average salary is?

engineer, What you say is true, but the average per capita income in the US is less than $36,000/year. It doesn't take 44 percent of our income for capital investments to make our economy maintain a healthy growth. A highly productive society will get other countries to invest in our capital; the only problem today is the increasing divide between the rich and poor. The fact that seven million more Americans are now living without health insurance, our schools are not producing math and science students comparable to other developed countries, and our federal government and consumer debt are increasing at unsustainable levels puts us at a disadvantage for our future.

I must also mention that "averages" tell very little about the realities of an economy the size of the US. I live in Silicon Valley where average income is one of the highest in the country. The latest report I have seen on local salaries puts us at about $75,000/year - more than double the national average. However, the cost of living is also very high; many homes in our area are now selling for one million dollars plus - not seen just a few years ago. Housing prices in our area continue to go up in a market that has slowed.

Ours is a dichotomy of contradictions, and it's difficult to put one's finger on what is happening. I'm sure there are extremes all over this country of ours.

Getting other countries to invest in our capital doesn't really help since they expect to be paid back with a suitable return added, but I agree with many of your other points, especially on health insurance and debt. Education is a topic for another thread.

So the question is what portion of a worker's productivity should they expect back in salary and benefits. If an employer invests in technology to improve productivity, should the employee expect a large raise, or should the employer get the lion's share of the benefit? You would expect in a low tech society that output is very directly related to worker contribution and therefore the worker should see a strong correlation between employee contribution and pay. In high tech societies, the capital investments are substantially higher (and you would expect employee productivity to be extremely high as a result.) On a per employee basis, use of raw materials would also be substantially higher. In this case, the relationship should be weak (IMO).

So how to test the argument? Rama, do you have information on the contributions of workers in other countries in your original article? I suspect western Europe and Japan looks similar to the US (percentage wise) while Eastern Europe shows a higher percentage. The Asian numbers would probably look pretty interesting as well.

One comment on the original post...

Why do you believe this? This is not my observation. I see folks enjoying life and content that their work is meaningful. Not everyone, but the majority. Are Americans different where you are?

The amount of money you earn and the amount of productivity one puts out all depends on the education of the person as well. Less education typically means less income. Most people don't have an education past high school. There is more then regular college people could attend but most choose not to. This will in the long run effect peoples income abilities. I don't have a college education but I attended a trade type school and learned about computers. This went directly into my career and has allowed me to earn more money then I would have if I didn't go to my trade school. It allowed me to get my foot into the door and move around and earn more money. This is what most people should do. If they don't it is going to a long hard money broke life.

engineer, What is actually happening and has happened is those trade partners who are holding billions in US dollars buy US companies and property. Unless we share the bounty of our earnings, most countries with a trade surplus will continue to buy our "capital."

So how much should the average US worker get paid versus his productivity? I think this is a great question. Are we truly miserable wage slaves for the Man as Ramafuchs repeatedly suggests or are we fairly paid on average with exceptions showing the system is not efficient?

I believe in the concept of "free markets," but we have a problem when higher productivity doesn't benefit the workers who are producing our goods and services - but rather enriches those only at the top. What galls me more are those CEOs who earn high pay and bonus' even though their performance is bad or is mediocre; it just doesn't make any sense.

I agree. The system is clearly inefficient on the extremes.

Engneer
Thanks.
Accept my regards for your candid response