Let’s suppose the wage-productivity gap does not close through policy or market forces. In other words, wages paid to labor continue to trail productivity overall. What’s a workers to do to get their fair share?
Unfortunately, only macrotrends that raise aggregate real wages or reduce productivity will close the absolute wage-productivity gap.
The best an individual worker might do is cobble together a higher effective wage for themselves by hacking wage-productivity measures with some of the same trends that suppressed wages in the first place. Examples -
1)Technological Change
Remote Work Perks
From a worker perspective, remote work is a strong wage multiplier. If a penny saved, is a penny earned then the savings from not commuting, skipping lunch purchases, not needing/paying for that extended hours daycare all add up to nice bump in implied compensation.
Zoom calls still a thing in 2062 Billable Tasks to Multiple Clients
In the world of consulting, billable hours is the practice of allocating your time to tasks and/or clients at the designated rate. Often Multiple clients. However, in the domain of remote knowledge work, rate per hour doesn’t make that much sense. A move to compensate lower and mid tier operators based on tasks performed over larger time frames or by deliverable could help both management and labor improve alignment of compensation.
Smug consultant claiming to work at Goldman, Point72, and for a startup at the same time An individualized labor model might work for 3 companies at a time —
Client 1 - $50 per report delivered to management. Expect 3-5 reports per week
Client 2 - $500 per training presentation delivered. Expect 1 per week. Possibly 2 or more during intern season.
Client 3 - $1000 per week for monitoring site reliability of a system (All Green - No actions)
2)Globalization Trends
The emerging trends of de-globalization, re-shoring factories and higher tariffs may help reduce the wage-productivity gap over time but workers can speed up the change by jumping on the trends. Gen Z is doing it by choosing in-demand blue collar careers over white collar roles which can be done anywhere. Supply and Demand says wages will increase where there is a need. Find the needs re-emerging at home to help keep your income high and on track with productivity.
3) Calculation Metrics
Alluded to this one above on billable hours, but the old industrialized calculations of output measurements and compensation no longer work in a world of ZOOM meetings, smart phones, cloud computing and A.I. robotics. The wage-productivity gap partially exists because replying to emails at 11PM or on a Saturday afternoon can be productive but we are not really paid explicitly for it.
Conclusion
The wage-productivity gap is an unfortunate result of late 20th century trends in labor. Unless a major force steps in to reverse the trend via policy, it’s unlikely to clear up on its own. As the future of work and working conditions continue to evolve, the only things workers will be able to do is ride the waves best they can to minimize the gaps for themselves and earn what they need and deserve.
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