Johnny again

Back in the 1970s, economists began to question how the engine of
economic growth could be sustained at a time when productivity gains were
starting to have a major impact on both unemployment and average earnings.
And that’s exactly the pattern that has unfolded since then with significant
advances in productivity replacing more and more labour, with an inevitable
impact on real earnings growth. Where once the income of one earner
in the family suffi ced, the “two-earner family” is now the norm.

Snigger. The man seems to think that rising productivity leads to falling real earnings.

Mans\’ a loon. In a competitive market (ie, one without a monopoly purchaser of labour) rising productivity leads to real earnings growth.

Indeed, it\’s pretty much the definition of rising real earnings being possible, that each hour of labour produces more enabling more to be paid for each hour of labour.

The "two earner" theory is rather undermined by the fact that leisure hours have risen for both men and women in recent decades. It isn\’t that people have had to work more to keep their heads above water. It\’s that they\’ve had to do less unpaid work in the household (as a result of technological improvements generally, that is, that household labour has become more productive!) so they are able to both take more leisure and more work in the money economy.

More exactly, male working hours both in the money economy and the household one have fallen. Female working hours in the money economy have risen and in the household fallen. The nett effect for females is a fall in total working hours as household hours have declined more than money ones have risen.

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