Reply Tenzin. United States Productivity. Literature & Language Essay

United States Productivity
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Productivity is an important area in economics though it is least understood by citizens. Productivity is defined as output from an individual in an hour. It is a central factor in the growth of the economy and a great factor in determining the living standards of the citizens. Generally, productivity is the reason why a laborer today ends up making much more than a decade ago since every hour that an individual works produces an increased level of services and goods. The worrying issue is that productivity has been slowly growing in the better fraction of this decade and deteriorating in a steady manner from 1970’s. The slowdown in productivity has taken place during a period characterized by change in technology, increase in level of education in labor forces available and the participation of organizations and nations in value chains which are global. Moreover, these are usually associated with high productivity. The following discussion explains the reasons for downfall in growth of productivity and the future of it.
Firstly, businesses in US have not been concentrating in investing to become more productive. Even with the past low rates in interest in the history of US, the domestic investment share in relation to the gross domestic product (GDP) has reduced to its lowest level during the last decade. Additionally, firms have continuously spent on purchasing of new machinery and investing in new technology, which both have a direct effect to growth in productivity. This has greatly contributed to a slowdown in productivity. Secondly, innovation has contributed to productivity slowdown. Productivity increased greatly in the 20th century due to rapid innovations brought about by industrial...