Don’t be fooled: Workers still share in rising productivity

ECONOMY: December 15, 2022

For some time now, legislators have been eager to jack up subsidies for workers, whether it’s by raising the Earned Income Tax Credit (EITC), hiking the minimum wage or simply giving out cash benefits. Indeed, Democrats are hoping to achieve one of those goals — the EITC expansion — during the lame-duck session. One argument commonly used to justify these policies is that the link connecting worker productivity to wages has been broken for years. Workers, the argument goes, aren’t capturing the gains from their rising productivity.