WASHINGTON—The Information Technology and Innovation Foundation (ITIF), a tech policy think tank, today released the followed statement from its president, Robert D. Atkinson, on the 2016 Q2 productivity data released by the U.S. Bureau of Labor Statistics (BLS):
Today’s BLS announcement that productivity dropped 0.5 percent in the second quarter of 2016 is another reminder that the national productivity picture remains bleak.
While the presidential campaign has focused a great deal of attention on jobs and wages, productivity has been the economy’s forgotten vital sign. No one pays enough attention to it, and that must change. Economists all agree that raising productivity is the key to improving people’s living standards, yet to the extent it comes up at all, it is incorrectly portrayed as a boogeyman that kills jobs and exacerbates inequality.
If we want to restore robust productivity growth, the federal government needs to craft an explicit national productivity strategy that makes faster productivity growth the principal goal of economic policy, and adopts a carefully tailored approach for different sectors of the economy, greater support for research and development for better tools of production, and focused follow-through to ensure firms adopt them more rapidly. If the United States could boost productivity by even one percentage point, it could make the economy $2.3 trillion bigger than it is otherwise projected to be in 10 years while shrinking the federal budget deficit by more than $400 billion.
Learn more in ITIF’s May 2016 e-book, “Think Like an Enterprise: Why Nations Need Comprehensive Productivity Strategies.”