Recently the problem of declining productivity in the U.S. economy has made front pages. On June 1 U.S. News reported:
The U.S. economy is sick, and analysts aren't entirely sure where the ailment came from or how they should go about treating it. What is certain, though, is that domestic productivity gains have ground to a halt, and even the most senior Federal Reserve official is now worried about where the economy can reasonably go from here. "We have a lot of jobs being created in the face of not much output growth. Unfortunately, that means that productivity growth, which is the growth in output per worker [per hour worked], is very slow," Fed Chair Janet Yellen said recently during a speech at Harvard University. "Since productivity growth ultimately determines the pace of improvement in living standards for society as a whole, that's a serious and negative development."