Preston Mui, Senior Economist at Employ America, recently authored a report titled “The Dream of the 90s is Alive in 2024: How Policy Can Revive Productivity Growth.” The report offers a blueprint for policymakers seeking to emulate the successes of an unparalleled period of productivity in the United States. Mui joins us to examine and reflect on the policy decisions which drove the strong productivity growth of the 1990s, and he also identifies dynamic new strategies for revitalizing American production in the present.
Preston Mui is a Senior Economist at Employ America, a macroeconomic policy research and advocacy organization committed to achieving and sustaining full employment outcomes.
Twitter: @PrestonMui
Three Motivations for Interest Rate Normalization: A Playbook for Fed Policy in 2024
The Dream of the 90’s is Alive in 2024: How Policy Can Revive Productivity Growth
Preston Mui’s thread on the “Dream of the 90’s” series and report by Employ America
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Nick Hanauer:
The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.
Speaker 2:
It’s time to build our economy from the bottom up and from the middle out, not the top down.
Nick Hanauer:
Middle out economics is the answer.
Speaker 2:
Because Wall Street didn’t build this country, great middle class built this country.
Nick Hanauer:
The more the middle class thrives, the better the economy is for everyone, even rich people like me.
Speaker 3:
This is Pitchfork Economics with Nick Hanauer, a podcast about how to build the economy from the middle out. Welcome to the show.
Nick Hanauer:
Goldy, today we’re going to focus our attention on the show, on the issue of productivity.
Goldy:
Are you saying I’ve not been productive enough, Nick?
Nick Hanauer:
That’s for sure. Always.
Goldy:
Are we having this conversation again? Is it my annual review?
Nick Hanauer:
Live, on air. Productivity, as you know, Goldy is output per worker and sometimes your output-
Goldy:
Work per hour.
Nick Hanauer:
Yeah, per hour. Your output often is very, very low. But in general, we want it to be high. We want people to produce a lot of stuff relative to the number of hours that they work because that is not a perfect, but a directionally correct way to assess if the economy is moving in the right direction is all the effort we’re putting in increasing our welfare overall.
Goldy:
Yeah. Let’s be fair. Let’s clarify this. It’s not just quantity, it’s quality.
Nick Hanauer:
That’s right.
Goldy:
It’s a harder part of productivity to measure. So my defense very high quality.
Nick Hanauer:
Sometimes.
Goldy:
Not necessarily the quantity you want.
Nick Hanauer:
Correct. But just like it is difficult to manage you. It is difficult to assess using merely productivity numbers, the actual quality of the output of the economy because you’re absolutely right, Goldy, the quality is hard to assess. And when we look at the productivity numbers, obviously, the number of, for example, phones produced per worker per year says nothing about the quality of the product. Like how many features it has and so on and so forth and all of that. It makes it much more complicated. But in any case, suffice it to say that if productivity is rising, that’s probably generally a good thing and it’s something that economic policy makers should keep their eye on.
And today, we’re going to talk to Preston Mui, who works effectively exclusively on that issue, who’s an economist, senior economist at Employ America, macroeconomic policy shop that focuses on sustaining full employment. And he’s going to talk about… They have a recent report out called The Dream of the ’90s is Alive in 2024: How Policy Can Revive Productivity Growth. What’s cool about that, I think, is that it hearkens back to the last time the economy was unambiguously on fire, which was in the late 1990s under the Clinton administration, when everything in the economy was flying.
Goldy:
And importantly, up until this moment in time, it was the only extended period of the past 40, 45 years in which the majority of workers saw a substantial rise in real wages.
Nick Hanauer:
That’s right.
Goldy:
It was that second half of the ’90s.
Nick Hanauer:
That’s right. I mean there were all sorts of things amazing about the ’90s. One of them was is that we were actually paying down our budget deficits. Right?
Goldy:
Well, we’re not doing…
Nick Hanauer:
Not today.
Goldy:
No, not after the Bush and Trump tax cuts.
Nick Hanauer:
No. But President Clinton, a Democrat remains effectively the only fiscally responsible president that we’ve had, if you want to use that way of understanding it. Well, I mean, I can’t even remember since when… I mean, Reagan was the one who invented deficits, of course, a little known fact. So again, we are definitely on the cusp of another ’90s, or I would argue even ’60s style productivity boom as a consequence of the middle out policies, the Biden administration is enacting. But anyway, I think we should talk to Preston about what he thinks. Obviously, he’s thought pretty carefully about it.
Preston Mui:
My name is Preston Mui. I am a senior economist at Employee America. We are a research and advocacy group dedicated to promoting full employment. I just recently released a report called The Dream of the ’90s is Alive in 2024: How Policy Can Revive Productivity Growth, where I look at the macroeconomic conditions that supported productivity growth in the late 1990s and whether and how we can return to that situation today.
Nick Hanauer:
That’s awesome.
Goldy:
I’m looking at our list of questions here, but I thought maybe Preston, we should start with some definitions. What exactly is full employment? And also what is… Let’s talk about what exactly is productivity?
Preston Mui:
So full employment is when people are able to find jobs easily, when the level of employment is high, when the level of wage growth is high, when workers feel empowered and have a lot of bargaining power at the table when they’re able to leave bad jobs for good jobs and negotiate raises at their current jobs. There’s a lot of aspects of full employment. It’s not well captured by any one statistic. You have to look at a number of different measures, but that’s what we’re looking for.
Productivity, when I talk about productivity, I’m specifically talking about what the government publishes as non-farm labor productivity, which is basically a measure of real output per worker.
Nick Hanauer:
Great. Preston, tell us about your report, The Dream of the ’90s.
Preston Mui:
Yeah. So the last time we saw a really strong productivity growth was the 1990s. During the late 1990s, non-farm labor productivity grew at a rate just above 3%. To give you some context, during the whole of the 2010s, which was a low productivity time of growth, productivity grew just over 1%. And most recently in 2023, we saw productivity growth take up to 2.6%. So this has a lot of people wondering whether or not we might be able to return back to the productivity growth of the 1990s. And so what my report does is we look at narratively speaking, what made the 1990s unique from a macroeconomic standpoint.
We think that there are basically three really important things going on. We call it the three legs of the productivity stool. The first one is full employment. So after the recession of the early 1990s, the economy rebounded, the labor market rebounded. We saw the highest age deployment rates we’ve ever seen in the 1990s. Wage growth is really strong.
Nick Hanauer:
If I could interject, that was during the Clinton boom years, correct?
Preston Mui:
That’s correct. So we saw employment grow to record highs. We saw really strong wage growth. We saw really low unemployment and we think that was part of the story. The second leg of the productivity stool is a boom and fixed investment. Everyone remembers the 1990s as an era of a really strong investment, particularly in computers and software. And that was a really important part of it. And then the third leg of the productivity stool is a stable supply side.
So relatively speaking, the late 1990s were a good time in terms of oil prices, healthcare prices, things like that. If you look at personal consumption expenditures, the share of personal consumption expenditures, going to housing, food, medical care and energy was lowest it’s ever been. What this meant was that inflation was low. The growth was not diverted into responding to the supply shocks, and the Fed was able to keep interest rates low, which helped build upon the boom that happened in the late 1990s.
So we think that those three ingredients, which the 1990s had and other recoveries had maybe one or two of these legs, but the 1990s were unique in that they had all three of those. And we think that if we want to return to that situation today, we are going to have to work to make sure that all three legs of the productivity stool are stable.
Nick Hanauer:
Interesting. So I guess our perspective, and certainly my perspective was when I read your report, was that the policy interventions… I mean with the exception of the Fed holding interest rates too high at this point, certainly what the Biden administration has been doing is basically what you recommend. Is it not?
Preston Mui:
I think that’s a big part of it. If you look back at the 1990s, you mentioned the Fed and the Fed was able to keep monetary policy relatively loose back then, and that was definitely a big part of it. But a big part of the 1990s was luck, especially on the supply side. We got very lucky with healthcare inflation. We got really lucky with energy shocks. If you look forward to today, luck, isn’t something that we should be trying to rely on. We should be actively trying to engineer those conditions.
And a lot of the Biden administration’s policies are geared towards that. The biggest example, of course, is the Inflation Reduction Act, which has massive investments in our energy infrastructure. That’s really important. It’s not the only thing. There’s a lot of other things that the administration should be looking at or the government in general should be looking at trying to tackle things like housing costs, energy costs, medical care costs, education costs. It’s going to take a whole suite of policy responses. But I think that the Biden administration has done a really good job of trying to promote supply site stability as well as fixed investment in those areas.
Nick Hanauer:
And obviously the labor market has rarely been tighter.
Preston Mui:
Yeah. The recovery has been amazing. I mean, it’s the fastest recovery from a recession ever, and I think that fiscal policy has a huge amount to do with that as well as the monetary policy response. I think it’s from that perspective, we’re doing a lot better than say the 2010s when we had a recession and we had a very slow and sluggish recovery in the labor market.
Nick Hanauer:
Right. So the sort of middle out approach the Biden administration is taking of empowering workers, investing in America and promoting competition seems highly consilient with your view. And obviously, the administration has no control of the Fed and the interest rates, which I think is the one problem area. And as we’ve said on the podcast, many times the Fed mistook higher prices as a consequence from a global supply chain shock for a wage price, which is what inflation is. And since their only tool is interest rates, they raised them when they probably should have kept them lower or the same.
But with that notable exception, with respect to our policy response at this point, what else could the Biden administration be doing to generate higher levels of productivity growth?
Preston Mui:
Well, so I think that the policies that the Biden administration has implemented are a really good start. But passing the Inflation Reduction Act, for example, is not sufficient. It still relies on good stewardship from the administration or future administration of being able to actually implement these policies. And there’s a lot that federal authorities can do to make sure that the Inflation Reduction Act and the Bipartisan Infrastructure Act are well implemented.
One such example that we’ve worked on at Employ America is that we think that the Department of Energy should be helping make investments in nascent technologies and next generation geothermal. So that’s something that can be done through various authorities at the Department of Energy. We think that the administration should take a look at establishing a strategic resilience reserve. So the administration has done a lot of work using the strategic petroleum reserve to keep oil prices stable.
There is going to be a lot of critical minerals that are going to be necessary for a successful green transition. And we think that using those powers and those authorities that they’ve used in petroleum could be used to secure, for example, the supply of lithium, which is a critical mineral used in solar panels and batteries.
Nick Hanauer:
I just have to ask, when you were talking about nascent technologies that deserve investment, and you use the example of geothermal, why did you choose that?
Preston Mui:
Well, it’s just one example of a technology that has a lot of potential, but the market is not necessarily able to deliver on, for various reasons, financial constraints in credit markets. It’s a highly risky investment, but it’s the kind of thing that the public sector can take on and can reduce risk and investment in, and we think is a good place to look at.
Nick Hanauer:
I asked a question because I happen to agree with you. I have some friends who are engaged in a new tech geothermal thing called Quaise, where they hope to be able to drill 10 or 12 miles down and super steam. And it is at the end of the day, just an engineering challenge, which will require a lot of money. And it’s not clear that the market is the right way to get that done. So I was just interested in that. It’s interesting.
Preston Mui:
Yeah. Well, the other thing about geothermal is that there’s a lot of work that can be done to build geothermal on publicly owned land. And I think actually this is a really good example of there’s a lot of publicly owned or publicly involved space out there that can be used to help build on fixed investment in supply sites. So for example, I used to live in Berkeley, California when I was getting my graduate degree, and I lived near one of the transit stations. Over there, they’re building a ton of housing on the parking lots that are not really full. So there’s a lot of public resources that can be leveraged to help with investment and securing the supply side.
Nick Hanauer:
Preston, can you give us a little bit more context about the history of productivity growth? To my memory in the last century that the peak levels of productivity were in the ’60s, were they not?
Preston Mui:
We did have strong productivity growth in the 1960s.
Nick Hanauer:
In the range of 4%, wasn’t it?
Preston Mui:
Yeah, we did. I think if you go back in time, you find that a lot of the productivity growth is due to changes in things like demographic factors. So people get more educated. You have women entering the workforce. There’s obviously still improvements that we can do there, but it’s harder to get more productivity growth out of that as you have more women enter the workforce and people get more educated. You pick the low hanging fruit first and then it’s harder to get that higher hanging fruit.
Goldy:
This gets to another thing in your report, which I found fascinating, which is you initially get this productivity growth when you’re expanding the workforce and getting closer to full employment, but of course there’s a limit as to… We can talk about what that full employment number is. They used to consider it to be much higher. Now we’re under 4%, so clearly full employment is under 4%.
But once you’ve got this high percentage of working age people working, you say that you start to get more productivity growth by increasing wages even with the existing workforce. How does that demand side part of the equation work?
Preston Mui:
I think it would be helpful if I went through the reasons why I think that full employment is conducive to promoting productivity growth. The first one is, as you get closer to full employment and the longer you stay at full employment, the further workers climb up the job ladder in terms of productive jobs, high quality jobs, high paying jobs. So you can think about jobs as on a ladder.
During a recession, workers fall off the ladder. They’re unemployed. They’ll take whatever job they can get, and then over time they will move to better and better jobs. And I think that’s part of the productivity story. Early on during recoveries, productivity is low because people get new jobs. There may be not great jobs. They’re getting used to these jobs, but over time they get better jobs, higher productivity jobs, and they get better at those jobs.
So the longer you stay at full employment, the more workers get trained in these better jobs. And that’s going to be reflected in wages, right? Because as they go to better jobs, those jobs will likely be higher paying. The second reason I think full employment is really important is because employment and wages create income and income supports consumer demand. And ensuring that there is strong aggregate demand is really important for encouraging businesses to invest in capital, in productive improvements in technology.
Businesses have to be able to justify their investments, and if there’s not enough demand, you’re not going to see that investment in productivity. And this is something that we saw in the 2010s. We had a really anemic recovery. We had really anemic investment, and as a result, productivity growth was really low. And then the third reason is that when labor becomes more expensive, this could incentivize businesses to invest in labor saving technology, which would also improve productivity.
Nick Hanauer:
That last point is the one I think that businesses feel most acutely, which is if the labor market is super soft and wages are low, there’s very little incentive for owners of capital to deploy it to save on wages. It is only that constant upward pressure. The expectation in fact, that wages will be higher next year, that creates a cycle of investment, and it’s a muscle that you have to develop as a business owner to try to keep wages, the aggregate wages manageable as you grow your business.
Preston Mui:
Yeah, absolutely. It matters on both the demand side and the cost side.
Nick Hanauer:
And the cost side.
Preston Mui:
[inaudible 00:19:04] cost. Yeah, exactly.
Nick Hanauer:
And so it is all about creating that virtuous cycle of increasing wages, which increases aggregate demand, which increases the pressure to invest in productivity, increasing equipment and processes that generates the kind of economy that you really want.
Preston Mui:
Yeah, absolutely. And when it comes to today, we’ve had this really tremendous recovery in the labor market. If we want to see productivity growth going forward, it’s imperative that we maintain the labor market gains that we worked really hard to get back. So that aggregate demand stay strong. And you mentioned the Fed earlier and how they were concerned about wage price spirals earlier and things like that. I think to their credit, they have really gone back on that story. If you look at the latest projections from the Fed, 17 out of 19 members see the unemployment rate rising no more than 0.2% from here.
So I think there’s been a lot of improvement in the way that the Fed is looking at the labor market, and hopefully that translates later in this year to normalization of policy that protects the labor market.
Goldy:
See, there you go. It just proves your point. The more experience these Fed governors have on the job, the better they get at it. They’re just being more productive.
Nick Hanauer:
That’s true.
Preston Mui:
I mean, I think it really was a lot of learning from the 1990s when the natural rate of unemployment was estimated to be 5.5% and you saw it go down to 4%, and the Fed was really confused about that. And also learning from the 2010s. I think, yeah, there’s been a huge shift in the way that the Fed looks at the labor market over the past few decades, and that’s a really great development.
Goldy:
To be fair, who thought that you could bring prices down without causing immense suffering for tens of millions of workers?
Nick Hanauer:
Yeah.
Preston Mui:
Yeah.
Goldy:
I mean, that’s the whole point of-
Preston Mui:
I spent all of 2023 arguing about that. So I’m familiar.
Nick Hanauer:
It feels a little bit wrong to not inflict that kind of pain, doesn’t it?
Goldy:
It’s the whole purpose of capitalism, isn’t it?
Nick Hanauer:
Exactly.
Goldy:
The sole reason why you became wealthy was so that you could inflict misery on others.
Nick Hanauer:
Right. Yeah, exactly. Why join the Fed board if you’re not going to inflict misery? So one of the things in reading your report, Preston, I was a little bit confused by is that it feels like to me we are in the country in aggregate is in a remarkable and almost unprecedented investment boom and will be for the next five, seven years, assuming that we implement the IRA and the rest of it, right? When you add up CHIPS, IRA, the infrastructure bill… What am I forgetting? The rest of it, the aggregate investment going into the country is going to be in the trillions of dollars. Now, business investment is slightly behind that, but it is a lot of investment, right?
Preston Mui:
Yeah. So I’m going to do the economist thing. And so on the other hand, on one hand. On one hand, yes, there is tremendous fixed investment, especially in things like non-residential construction is doing really well, specifically because of these fiscal programs. But there are areas that we really should be concerned about. If you look at housing investment, for example, new starts and permits for multifamily housing have really fallen off a cliff over the past year.
And if you think about what that might do to rents down the road maybe in a few years when these apartments would’ve been coming online, that’s a cause for concern. If you look at growth in research and development, real growth and research and development has actually been negative for the past two quarters. And if you think about that investment as supporting technological improvement, that’s something to be concerned about.
Nick Hanauer:
Interesting. So why do you suspect… Well, I mean, the housing thing is obvious. That’s interest rates, right?
Preston Mui:
Right.
Nick Hanauer:
If the Fed lowered the interest rates, that all comes back. How about R&D? Is that private sector R&D investment?
Preston Mui:
Yes.
Nick Hanauer:
Okay.
Preston Mui:
Most R&D investment is private sector. So if you look at overall, it’s not that different. Why do I think that’s the case? I think it does have to do with tight monetary policy. If you think about a business has to think about the risks that it’s going to take on versus the return, high interest rates increase the cost of making those investments, and it becomes harder to find projects that achieve that hurdle rate.
Goldy:
God, if only they could find a trillion dollars of money on stock buybacks that might be used for things like R&D.
Nick Hanauer:
Yeah. A 20% or 30% tax on stock buybacks might bring all that investment in R&D back in a minute. One of the questions we always ask is the benevolent dictator question, Preston. If you were in charge, what would you do? In particular, what would you do differently than we’re doing now as a country?
Preston Mui:
Yeah. So I’ll start with the Fed. I think it’s really important that the Fed normalizes interest rates soon. I understand that they’re waiting to have more confidence about inflation, but as inflation falls in real terms, the interest rate is going to rise and it’s going to tighten monetary policy. So I think it’s really important that we normalize fed policy. Employee America has a piece where we write about how we think fed policy should be conducted in 2024 and we argue for faster and front loaded rate cuts to prevent against deterioration of the labor market. So that’s our take on the Fed. When to comes to this-
Goldy:
When you say-
Preston Mui:
Go ahead.
Goldy:
When you say normalize, what type of interest rate? Because you don’t mean return to the previously near 0% rates of the post recession, great recession period?
Preston Mui:
Yeah. So what we mean by normalize is to get back to neutral in the sense that right now monetary policy is tight. The Fed acknowledges that it’s tight and that it’s tight because they want to fight inflation. But as that problem goes away, it becomes more imperative for them to get out of that tight position. As to where monetary policy eventually ends up, I think there’s a lot of uncertainty about where the neutral rate of interest is, but it’s certainly not 5.5% or what we’re at now.
So I think it’s important that we get back to normal. It might be higher than what it was before, and I think that’s fine. We’re going to have to find out where that neutral rate is, but it’s important that we start trying to reach that destination sooner. In terms of the rest of the government, I think it’s really important that we secure the other two legs of the stool, the supply side stool, and the fixed investment stool.
So as I said before, making sure that these programs are well implemented is going to be really important, but I think there’s a lot of work to do on securing the supply side and helping tame inflation so that monetary policy doesn’t have to take on the burden of using interest rates to fight inflation. So we’ve talked a lot about energy today, but there are a lot of places where the federal government can use its powers to implement cost control in a way that’s equitable.
So for example, the federal government spends a lot of money on education and healthcare, and there are things that the federal government can do to help make sure that costs of healthcare and inflation remain stable. I mentioned before the establishment of a strategic resilience reserve to make sure that we are secure from supply shocks for critical inputs to production. I think something that we’ve really learned over the past four years is that we really can’t take the supply side for granted.
We got lucky in the 1990s, but we’re going to have to make sure that the supply of critical minerals is stable for the next five years as we do the green transition.
Nick Hanauer:
And one final question, Preston. Why do you do this work?
Preston Mui:
Well, I’m a bit younger, but I graduated in high school in 2009 and college in 2013. So I remember my dad got laid off during the great recession, and that was… We ended up okay, but it was a stressful time and I remember watching colleagues and friends of mine in college trying to enter that labor market. And entering a loose labor market is really tough and has long-lasting consequences for those workers. And part of the reason why Employee America was founded was we looked at that situation and we said, “This can’t happen again.” So I think it’s really great that we managed to avoid it this time, and it’s imperative that we keep those gains.
Nick Hanauer:
I love it. Well, thank you for being with us.
Goldy:
And our apologies for how our generation screwed up yours.
Nick Hanauer:
Yeah.
Preston Mui:
Well, onwards and upwards and something about the long bend of the curve. Something, something.
Goldy:
Yeah, something like that. A couple of things jumped out at me from our conversation with Preston, Nick and one of them… Well, I guess the great example, and we’ve talked about this before, everybody knows about Henry Ford and the $5 a day where he essentially doubled the wages for some of the workers at his auto plant. There’s a myth about that in which he claimed that he did it so that his workers could afford to buy the cars that they were making. And then there’s the truth about it, which is how he sold it to the board. And that was they had something like 360% turnover at this huge facility that they built, and they were just not able to utilize it to run those assembly lines at full speed, which led to very… All that turnover led to very low worker productivity, very low quality, et cetera.
And when he doubled those wages, they slashed the turnover rate from nearly 400% to about 40%, and productivity went up, quality increased, the number of cards coming off the line increased. And yes, by the way, it did turn out driving that demand side because it drove up wages across the industry and across industries. And yes, suddenly industrial workers could afford to buy the products they made, which led to even more expansion.
And I bring this up because it gets to the two things about full employment and higher wages that drives productivity or at least two of the things. One of them is, as Preston mentioned, when you have full employment and people are on the job longer, they get better at the job. There’s no such thing as unskilled labor. Everything is a skill. Everybody gets better the longer they are on the job, including as we pointed out, the Federal Reserve governors. They seem to be getting a little better as they learn from experience too.
And the other is that very important point that increasing wages, increasing labor costs actually leads to higher productivity in and of itself, partially because those higher wages allow these workers to express their innate demand, which actually allows the employers to realize the full potential of their capital investments.
And at the same time, because wages are higher, incentivizes them to invest in labor saving technology, which increases productivity. And that, by the way, Nick, gets to the heart of just the confusion about productivity and wages that we constantly hear this, “Oh no, the robots are coming for your jobs. If we do a $15 minimum wage, then fast food restaurants are going to invest in order taking kiosks and so forth.” You know what? That’s a good thing.
Nick Hanauer:
Absolutely.
Goldy:
We want them to invest in labor-saving technology. What we got in the 2010s was low productivity because employment was soft, because wages were low. There was zero incentive for Corporate America to invest in labor saving technology, to invest in innovation that would increase productivity because they had cheap labor. Why would you do that? What we’re getting now with the higher wages and increasing real wages is this incentive to invest in the thing that makes our economy grow.
Because let’s be clear, there’s only two ways you grow GDP. When we talk about GDP growth, it is productivity per hour of labor. So you’re either growing the workforce or you are growing the productivity of those workers. That’s how you get that GDP growth. And once you’re at full employment, your opportunities to grow the workforce decrease. There’s only so many people available to work.
So if we want to have the three plus percent GDP growth that we’ve been experiencing over the past couple of years, which is a good healthy rate and all the benefits that come with it, we need to increase productivity.
Nick Hanauer:
Yeah, absolutely. And again, I think that Preston’s rubric for that, the three legs of their stool, I think make pretty good sense and are obviously completely aligned with what the Biden administration is presently trying to do. I think we’ve talked about on the show before, I’m incredibly bullish on the future of the American economy if we can just get all of these things implemented. I think that it’s extremely likely that you’re going to see productivity growth rates go through the roof as we implement the Inflation Reduction Act, the CHIPS and the rest of it.
Goldy:
Which again, gets to the point of how consequential this election is. If there’s one thing to know about Donald Trump, it’s that he’s vindictive and he will attempt to dismantle everything his predecessor did regardless of whether it’s working or not. So if we want these investments to actually pay off in the long run, we need to continue the program. And I think the other thing, and this is really important when we talk about wages, is again, that idea about how productivity growth is good. It’s good and it’s sustainable as long as the benefits of productivity growth are largely shared or widely shared.
It’s great if the robots are coming for jobs as long as we all benefit from the implementation of these robots. But when the owners of intellectual property and the owners of capital get to monopolize all of the returns from these productivity enhancements, and they’re not shared with workers, well, that’s when this whole virtuous cycle collapses.
Nick Hanauer:
That’s right. That’s absolutely true. It’s a pretty good news story, and all we have to do now is not screw it up.
Goldy:
Again, if you want to read more from Preston, there’s a link in the show notes to Employ America’s recent report. The Dream of the ’90s as Alive in 2024: How Policy Can Revive Productivity Growth.
Speaker 6:
Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to subscribe, rate, and review us wherever you get your podcasts. Find us on Twitter and Facebook @CivicAction and Nick Hanauer, follow our writing on Medium, @CivicSkunkworks, and peek behind the podcast scenes on Instagram @PitchforkEconomics. As always, from our team at Civic Ventures, thanks for listening. See you next week.