IANAE but in June last year there was a spate of discussion over productivity and real wages having a one to one correlation. Nicholas Gruen wrote in a comment to his article Economic Nonsense:
But in the long run, you expect to see income trending towards productivity. People or nations with high productivity put themselves in a pretty good position to make more money.
and Andrew Leigh wrote:
Absolute levels of productivity, not levels of productivity relative to our trading partners, are what matter.
So we can take from those quotes that productivity is an important indicator of current and future wealth. Peter Martin had an article the other day, titled: What if Paul Keating was right?
Productivity is the engine that drives our future prosperity. The Treasurers budget papers reveal that it has stopped growing. But you wont hear that admission from the mouth of the Treasurer himself.
Peter produces charts from the ABS to back his argument up. This is the chart that Peter mentions from the Budget Papers:
IANAE, so one for the economists that haunt this modern digital republic of letters; what is your opinion?