Les Leopold  @  ChelseaGreen

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The Real Story of Our Economy: Why Our Standard of Living Has Stalled Out

Posted on Tuesday, March 29th, 2011 at 3:51 pm by Les Leopold

Do public sector workers earn more than private sector workers? Who cares? This boneheaded question has us fighting over the crumbs. (And the answer is no - all credible studies show that when you account for educational levels, the total compensation packages are about the same.)

The real question is: Why have most workers seen their standard of living stall over the last generation?

The answer is both obvious and appalling. More and more of our nation’s wealth is going to the few, while the many have seen their real wages actually decline. It’s a disgrace.

It wasn’t always so. For more than a quarter century after WWII the fruits of America's productivity were shared with average working people, year in and year out. But what exactly was being shared?

What’s productivity and who gets its benefits?

Productivity is a crucial economic measure of the total output of goods and services in our economy per hours worked. It’s not based on pay levels, only on hours worked in the economy as a whole. In effect, it measures how much human labor power it takes to produce everything we have. It makes a real difference to our standard of living if it takes 10,000 hours rather than 1,000 to build a house.

Output per working hour, although imprecise, is the best way we have to measure our level of technique, organization, skill, effort and intellectual firepower. Sure, this measure has significant flaws because it doesn’t really measure our health or environmental quality. But it does indeed measure the material side of our standard of living. When productivity grows, a society has the means to solve many problems and the means to enhance working and living conditions…but only if the fruits of productivity are shared somewhat fairly.

Continue reading this article at Alternet.

looting Les Leopold is the author of The Looting of America.

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