Principles of Macroeconomics / Unit 4 MAC 0306 short lesson, about 20 seconds
Labor Productivity
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The idea
Labor productivity is output per worker, or per hour worked. Sustained growth in living standards comes from productivity growth and from nothing else in the long run.
In practice
Three things raise it: human capital, better technology, and economies of scale.
Where people slip
Productivity also sets wages in the long run, because employers can pay about what a worker produces.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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