A Productivity Paradox

On the surface, Europe and the U.S. have been beset by increasingly divergent economic problems. Although all industrial economies have experienced a slowdown in productivity growth since the early 1970s, Europe's gains have remained larger than those in the U.S. And European real wages, including those of lower-income workers, have continued to climb, while U.S. real wages have slowed and actually fallen sharply at the lower end of the scale.

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