Why Productivity Matters

Bloomberg’s Shift: The Commission on Work, Workers, and Technology report tried to address the problems workers face with technological innovation. It did, however, praise technological advances because increased productivity is the only real way to advance our quality of life. Here’s why:

Consider the most basic model of a firm selling a single product in a competitive market. That means the firm can sell as much as it can produce at the market price, p. The firm’s inputs are labor, L, and c...