Brendan Duke
examines the connection between wage growth and worker productivity, and makes the case that the former may lead to the latter:
The 1929–1950 increase in wages was at first a result of several policies that directly raised workers’ wages, including the first federal minimum wage, the first federal overtime law, and the National Labor Relations Act, which made it easier for workers to join a union and bargain with their employers. The entry of the United States into World War II further drove investment higher, as the economy converted into what Gordon describes as a “maximum production regime.”
It is striking that during this period of rapid productivity growth, wages for production workers grew even faster than productivity growth did. The current debate about whether a typical worker’s compensation has kept track with the economy’s productivity typically envisions productivity growth as the precondition for wage growth. But Gordon’s research implies that the relationship can go both ways: Not only can productivity growth raise wages, but higher real wages also can boost productivity growth—the main reason for slow gross domestic product growth—by giving firms a reason to purchase capital.
Can higher wages raise productivity growth in 2017? Basic economic theory and common sense suggests that an increase in the price of labor—wages—achieved through higher labor standards will cause firms to invest in more capital, raising the economy’s productivity
https://www.americanprogress.org/is...42040/to-raise-productivity-lets-raise-wages/
