Business NZ would squeal. But most employers know that lifting
wage rates encourages investement in capital equipment and
training to make their labour force more productive. It is all
part of the movement to a high skill, high wage economy.I also
noted that, yes, there is a relationship between productivity
and wages but it runs the opposite way to what Trevor claims.
Over time if you make people more productive, wages will
increase. Following up this, the information below comes from a
paper by Martin Feldstein (George F. Baker Professor of
Economics at Harvard University and President Emeritus of the
National Bureau of Economic Research) given to the American
Economic Association on January 5, 2008. The paper is entitled
"Did Wages Reflect Growth in Productivity?" Feldstein writes,
The level of productivity doubled in the U.S. nonfarm business
sector between 1970 and 2006. Wages, or more accurately total
compensation per hour, increased at approximately the same
annual rate during that period if nominal co