A new study shows U.S. productivity rising at its slowest pace in a decade, slower even than Europe. Is it, as some suggest, a changing of the economic guard, with a resurgent European Union surpassing the once-mighty United States? Don’t bet on it, says Investor’s Business Daily (IBD).
It might be true, as the Conference Board reports, that U.S. productivity grew just 1.4 per cent in 2006 (remember, final data aren’t in yet) while the European Union (EU) will likely post a 1.5 per cent gain. But even if those data hold, last year will likely be an anomaly. The United States is positioned to keep its place in the commanding heights of the world economy for decades to come, says IBD.
In other words, Europe is losing, not gaining, ground, says IBD.
Of course, no country’s lead is insurmountable and bad policies can kill any economy even one as powerful as the United States’. IBD worries, for instance, that the new Congress will over- regulate, overtax, slap new rules on U.S. companies to halt global warming and shut the United States to free trade. These would all be disasters for U.S. economic growth as they already have been in Europe.
Source: Editorial, No, The U.S. Isn’t Falling Behind, January 23, 2007; based upon: Gail Foster and Bart van Ark, U.S. Labor Productivity Growth in 2006 was the Lowest in More than a Decade, Conference Board, January 23, 2007.
For study text: http://www.conference-board.org/utilities/pressDetail.cfm?press_ID=3049
For more on Economic Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=17
FMF Policy Bulletin/ 30 January 2007
