this post was submitted on 06 Jul 2025
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[–] avidamoeba@lemmy.ca 8 points 13 hours ago* (last edited 13 hours ago)

I think at best there's evidence for a correlation between productivity and wages and even that correlation has largely disappeared since the 80s. If you're looking for causation, I'm afraid that without union representation, wage increases come before productivity gains and it's not difficult to see why. If your labour cost increases, your profit margin decreases. If you can't decrease wages, you have to get more product out of the same labour. You can do that by investing in more or better tooling, equipment, training, automation. That is productivity increase.

In a union environment, the union can force higher wages when there's increase in profits as a result of productivity gains. Which then drives further productivity increases as the owner tries to get their margins higher again. Which drives the kind of feedback loop which creates the tight productivity-wage correlation we've observed in the post-depression period till the 80s. You probably know what happened after that.