What Could Have Been

From 1947 through the 60's, the U.S. economy grew at a nearly 4% annual rate. The annual growth rate for the sixties was over 4.3%. Had our economy continued to grow at the '47 - '69 rate, Americans would be 43% richer today. Had we grown at our 60's pace, we'd be 67% richer. Even if we had only grown at a modest 3.5% pace, we'd still be 22% better off. Instead, our economy has only grown at a bit less than 3% since 1970. Astonishingly, our economy's growth has slowed down despite the labor force participation rate rising to 64% in the last decade from 57% in the late-sixties. Put another way, GDP per worker (in 2000 $$) was $47.1k in 1966 vs. 79.6k in 2007. This represents a measly annual productivity growth per worker of 1.3%, in comparison to 1950 - 1966, during which per worker output increase at a 2.6% annual rate*. Our productivity growth has slowed, and so has the pace of technological progress.


Sources:
GDP - http://www.bea.gov/national/nipaweb/SelectTable.asp?Selected=Y
Labor - ftp://ftp.bls.gov/pub/special.requests/lf/aat1.txt

* 7:30am I had originally posted a much higher figure for this last night but woke up this morning with "Shit - there's no way that number's right" and fixed my error and reposted the correct figure. I apologize to anyone who might have read that wrong number overnight.