Growth is still good

A paper (PDF) published by the Information Technology & Innovation Forum argues that most Americans have benefited from productivity growth over the past 25 years. Stephen Rose, the paper’s author, concedes that inequality has risen but, through a careful statistical analysis, shows there is still a link between productivity growth and wage growth. Much of the difference between median income growth and productivity growth can be explained by demographic change (for example, falling average household size) and rising benefits.

Much of the research for the paper was originally done for the middle class project at Third Way. Stephen Rose is also writing a book called Number Games on the decline of the middle class and other myths. He has also recently written an interesting article on the income of the average American for the Huffington Post.