RESEARCH REPORT: Help Wanted:  An Economic Productivity Agenda to Boost Workers

RESEARCH REPORT: Help Wanted:  An Economic Productivity Agenda to Boost Workers

Labor productivity, which measures how much output in goods and services the economy produces per labor hour, has fallen by 1.8% during the first two years of the Biden Administration—the first time in modern history that a new administration has presided over such a decline (Bureau of Labor Statistics, 2023a). Moreover, there is no indication of an impending rebound, with the latest data showing that productivity fell during the first quarter of 2023 (Bureau of Labor Statistics, 2023b).

These numbers are alarming because steadily rising productivity is necessary to achieve enduring, non-inflationary wage growth—something workers are desperate for after two years of watching their purchasing power erode in the face of decades-high inflation (Bureau of Labor Statistics, 2023c). Rising labor productivity means that workers and employers can negotiate over a growing pie; without it, different segments of the economy are pitted against each other, trying to claim their share of stagnant economic output (Bureau of Labor Statistics, 2023d). At the same time, productivity growth allows labor to be redeployed from existing production to new and more valuable ends, such as innovative and emerging industries. The alternative is a sclerotic and stagnant economy with diminishing prosperity and heightened tensions between stakeholders.

If America is going to sustain itself as the leading economic superpower and an engine of prosperity to people from all backgrounds, we must resuscitate stagnating productivity growth by removing the numerous policy barriers that get in its way.



  • Average labor productivity is down 1.8% in the first two years of the Biden Administration and posted an even worse 2.1% annualized drop in Q1 of 2023. No other administration in modern history has begun with such a dismal performance of labor productivity.
  • Low productivity is not a failure of workers—it is a failure of policy that is actively blocking workers from attaining higher levels of prosperity.
  • Steady productivity growth is necessary to produce sustained, non-inflationary growth in real wages.
  • To improve productivity and maximize worker paychecks, we need policies that allow Americans to access jobs where their economic contributions will be greatest. To start, that means fighting occupational licensing restrictions, punitive taxes, impediments to housing construction, poor school quality, and credentialing inflation.
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