Fact of the Week: Labor Productivity Grew Less Than 0.4 Percent Annually During the Industrial Revolution in the United Kingdom

Caleb Foote June 22, 2020
June 22, 2020

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Source: Nicholas Crafts, “Slow Real Wage Growth during the Industrial Revolution: Productivity Paradox or Pro-Rich Growth?” Warwick Economics Research Paper No. 1268, May 2020.

Commentary: Many skeptics of advanced technologies argue today that these new tools will do little to help average American workers, and point to U.K.'s Industrial Revolution as proof for this claim, arguing that it took half a century for technology gains to trickle down to the average worker. In fact, new research shows that, while wages did grow more slowly than GDP per worker, increasing 12 and 16 percent from 1770 to 1820, respectively, labor productivity growth was very low. Labor productivity growth averaged below 0.4 percent from 1770 to 1830, and only gradually increased to about 0.8 percent in 1860. This suggests that, rather than simply being a boon for the rich, the Industrial Revolution was much more gradual than many believe. As such, it calls into doubt today's claims that the next wave of technology will only benefit the well-off.