In the previous section we learned that increases in productivity allow a given amount of labor to p

In the previous section we learned that increases in productivity allow a given amount of labor to p

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In the previous section we learned that increases in productivity allow a given amount of  labor to produce a greater amount of output than was possible before the productivity  increase. Popular wisdom dictates that increases in productivity thus reduce the number  of jobs available, because less labor is required to produce the same amount of output.  Fortunately, this is not the case suggested by the historical economic data. Rather,  increased productivity seems to help the economy overall to a much greater extent than  it hurts workers, especially in the long run.  A historical example will serve to demonstrate this. Since the early 20th century, there  has been an over 1000% increase in output per hour in the US. This means that, on  average, workers today can produce more than 10 times more than what workers, on  average, could produce around the turn of the century. With productivity increases this 
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This note was uploaded on 12/13/2011 for the course ECO 1310 taught by Professor Staff during the Fall '10 term at Texas State.

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