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Workers' Compensation Growing with Their Productivity

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Publication Date: June 2008

Publisher(s): Heritage Foundation (Washington, D.C.)

Author(s): James Sherk

Series: WebMemo

Topic: Labor (Labor conditions, wages, salaries, and benefits)

Keywords: mobility; Labor; income; compensation

Type: Brief

Coverage: United States

Abstract:

Americans frequently hear that workers work harder than ever, but do not reap the fruits of their labor. A simple comparison of productivity and wage growth seems to confirm this trend. However, productivity and wage growth are not directly comparable. Looking at everything workers earn--not just cash wages--and adjusting both series with the same measure of inflation shows that productivity and compensation have risen in tandem. In fact, workers' pay is more directly tied to their performance than a generation ago. Congress should not legislate to correct an imbalance between wage and productivity growth because this difference does not exist.