Why US Productivity Has Stalled

Shut up, you sexist Bureau of Labor Statistics. Just shut up. And when's my lunch break?

According to a recent podcast from Freakonomics radio, something has gone wrong with American productivity. It rose strongly and steadily for about a hundred years, from 1870 to 1970, but then for some reason has flatlined ever since. If this does not change, America’s gravy days will soon be over. And economists cannot figure out what has happened. This story from the Economist says the same.

This is particularly odd because the current wave of digitization ought logically to be producing historic boosts in worker productivity. Just think how much time and energy is saved, for example by things like ATMs, email, and product codes. Yet worker productivity is decelerating?

There is, it seems to me, one obvious explanation, and it is not seen only because it is too politically incorrect. The slowdown in productivity has corresponded pretty exactly to the flood of women into the workforce. Women are simply significantly less productive than men.

The proof of this, actually, is the fact that traditionally, married men have been paid more for the same work than were women. This would be economic suicide for any large business in a free market if men and women were equally productive. The next company could then undercut them by outbidding them on better (female) employees.

But for a variety of obvious reasons, this is not so. Women do not need the job. They are doing it so long as it is satisfying and fun. Getting the job done tends to come second.

Government-mandated affirmative action short-circuits this, forcing everyone else to subsidize female employees. But this cannot change the productivity figures. This works well enough internally so long as government prevents a free market. But the problem, just as with unionized labour, is that any outside jurisdiction can clean up by operating outside these legal restrictions.


Indeed, were it not for the digital revolution, we would probably be seeing an absolute decline in US worker productivity, and in productivity throughout the West. Instead, the massive gains this ought to give us are being mostly wiped out.

Hence, the current economic stagnation and slow economic decline of the West.