Saad Ullah
⬤ Historical data from the Economic Policy Institute tells a clear story: from 1948 through the early 1970s, productivity and wages moved together like dance partners. When output per worker climbed about 90%, paychecks rose right alongside. Then something changed. The chart pinpoints the early '70s as the moment this relationship fractured, kicking off decades where productivity kept climbing while wages essentially stalled.
⬤ The numbers are stark. Between 1948 and 2017, productivity jumped 246% while hourly compensation managed just 115%. That massive gap means most of the extra value workers created over half a century flowed primarily to business owners and shareholders, not the people actually doing the work. Technology got better, processes got more efficient, but paychecks didn't keep up.
⬤ Now AI is throwing fuel on this fire. Machine learning and automation are pushing productivity gains faster than ever, but there's little evidence wages will follow. What started as a crack in the 1970s could become a canyon if AI's benefits concentrate at the top while workers see minimal gains from the efficiency boom they're helping create.
⬤ Markets are watching closely. This widening split raises real questions about whether consumers will have enough spending power to sustain growth, how corporate profit models might shift, and whether the current economic setup can hold long-term. As AI reshapes industries, the critical question isn't just how much productivity increases, but who actually profits from it.
Saad Ullah
