1Center for American Progress | Making the Right Investments Now is Key to Future Productivity
Making the Right Investments NowIs Key to Future Productivity
Quarterly U.S. Productivity and Innovation Snapshot
Adam S. Hersh and Christian Weller February 15, 2012
I has been our years since he sar o he Grea Recession in December 2007, and heU.S. economy is recovering seadily. Some indicaors show srengh such as he labormarke, which added more han 600,000 jobs in he pas hree monhs. Ta is grea orpeople looking or jobs righ now, bu many o hese jobs are low-paying, low-bene,and unsable. For he longer erm people need well-paying, sable jobs, and hose willdepend in large measure on produciviy growh. As we explain below, however, he U.S.economy shows some worrisome rends in is produciviy growh.Produciviy growh—he rae a which we increase producion or a given amoun o work and resources—is a he hear o economic growh, compeiiveness, and sus-ained improvemens in living sandards or working Americans. In an economy where workers share he ruis o heir labors, produciviy growh ranslaes ino more and beter jobs, and rising incomes or middle-class amilies. A number o acors aec pro-duciviy growh in he uure, including he pace o business invesmen, he availabiliy o skilled workers, invesmens in science and research, and adequae nancing o bringnew ideas and producs o marke.Te indicaors reviewed in his brie raise a number o concerns abou he uure o U.S.produciviy and, in urn, compeiiveness:
Productivity growth slowed sharply in the final quarter of 2011 and has increased atonly a modest pace since the start of the current business cycle in December 2007.
Furher widening o he U.S. high-ech rade deci signals ha he U.S. economy’scompeiive edge needs resharpening.
Business investment slowed in the three months through December 2011 andremains historically low.
Corporaions are no direcing heir srong pros o