Adjusted for Productivity: A New Way to Rethink Wages and Economic Fairness

Adjusted for Productivity: A New Way to Rethink Wages and Economic Fairness

For over a century, “adjusted for inflation” has been the standard way economists and policymakers measure the real value of wages and economic growth over time. But what if we introduced a new metric—Adjusted for Productivity? What if we assessed worker compensation based not just on purchasing power, but on how much more productive each worker has become due to advances in technology, processes, and education?

This seemingly simple idea could have radical implications for the economy, public policy, corporate practices, and the very fabric of how we define fairness in capitalism.

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The Productivity-Wage Gap: A Brief History

Since the 1970s, productivity in advanced economies—especially the United States—has soared, thanks to automation, software, AI, and globalization. But wages have stagnated for the average worker. According to data from the Economic Policy Institute, between 1979 and 2020:

• Productivity grew by 61.8%

• Hourly compensation grew by just 17.5%

In a world “Adjusted for Productivity,” real wages would be much higher. If compensation had kept up, median workers would be earning tens of thousands of dollars more per year than they do today.

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What Would "Adjusted for Productivity" Mean in Practice?

It could be used in three ways:

1. A new wage benchmark – Employers, unions, and governments could use productivity-adjusted compensation as a guideline for setting fair wages.

2. A policy framework – Tax incentives, wage floors, or profit-sharing laws could align pay with productivity.

3. A public narrative shift – Just as “adjusted for inflation” changed how we view prices, “adjusted for productivity” could reframe how we view economic fairness.

Imagine a society where workers say, “I don’t just want a raise to beat inflation—I want my fair share of the productivity I helped generate.”

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Counterarguments – And Why They Fall Short

1. "We can’t raise wages or we’ll hurt competitiveness."

This is the most common refrain from opponents of wage increases. But if productivity has risen, then businesses are getting more output per worker. Higher wages in this case don’t reflect inefficiency—they reflect shared success. In fact, higher wages can lead to:

• Better employee retention and morale

• Increased consumer demand (because workers have more to spend)

• Incentives for further innovation (to maintain margins)

Moreover, companies enjoying record profits while suppressing wages are not protecting competitiveness—they are extracting surplus value.

2. "Some workers aren’t more productive—they just benefit from tech."

True, much of the productivity gain comes from systems, not individual effort. But this is a flawed argument. Companies adopt new technology because it enhances the value of their workforce. It’s a symbiotic relationship. If your software allows one worker to do what used to take three, that gain should be shared.

We don’t blame the steam engine for productivity gains in the 19th century—we credit the companies and workers who adapted it. Same goes today.

3. "Markets set wages, not fairness."

Yes—but markets are not neutral. They are shaped by power. When unions are weak, worker bargaining power is low. When monopolies dominate sectors, they can suppress wages. “Market wages” don’t always reflect value—they reflect who has leverage.

Adjusting for productivity wouldn’t override the market. It would inform it, giving us a clearer lens through which to understand what workers truly contribute.

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Potential Economic Impacts of Widespread Productivity-Linked Compensation

1. Stronger Consumer Economy

More income for workers = more spending = stronger demand = more economic activity. This is especially vital in a consumer-driven economy like the U.S., where 70% of GDP is tied to household spending.

2. Reduced Inequality

If the gains of AI, automation, and global supply chains were shared fairly, it would close the gap between the wealthy and the working class. The billionaire class would still be rich—but the middle class would not be hollowed out.

3. More Political Stability

Economic despair breeds political extremism. Fairer distribution of productivity gains could reduce populist backlash, anti-globalization sentiment, and distrust in democratic systems.

4. Business Innovation

If companies can’t rely on wage suppression to maintain margins, they may lean harder into true innovation—better products, better systems, more value creation.

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Why This Matters Now

We are at the dawn of the AI era. The potential for productivity to skyrocket is real. If we don't build fair compensation systems now, we risk repeating the mistakes of the last 50 years—where gains go to capital, not labor.

“Adjusted for Inflation” was the tool of the 20th century.

“Adjusted for Productivity” should be the standard of the 21st.

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Call to Action: Policymakers, business leaders, and citizens should begin integrating productivity-adjusted thinking into wage debates, economic modeling, and collective bargaining. A better economy isn’t just about more—it’s about fairer. 

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Building a Car Before You Can Drive It: The Illusion of Reindustrialization

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Building a Car Before You Can Drive It: The Illusion of Reindustrialization 

There’s a popular slogan echoing through America’s political halls: “Bring the jobs back. Reindustrialize. Make it here again.” It sounds patriotic. It evokes images of bustling factories, union jobs, and thriving small towns. But it’s also a deeply flawed diagnosis of what really went wrong — and a dangerously misguided prescription for how to fix it.

Reindustrialization, in many ways, is like building a car before you know how to drive. It assumes that merely producing things again, in America, will somehow reverse decades of inequality, community decay, and wage stagnation. But it won’t. Because manufacturing didn’t leave America — prosperity did.

What Really Happened

Global trade absolutely boosted American productivity. It lowered prices, expanded consumer choices, and allowed American companies to focus on high-value industries. The problem wasn’t globalization. The problem was that the top 1% vacuumed up nearly all the gains.

If those productivity surges had been equitably shared, the average American worker today would be making significantly more. Service jobs wouldn’t be “low-wage” by default. Small towns wouldn’t be ghost towns. And millions wouldn’t be working two jobs just to scrape by. The issue wasn’t offshoring alone — it was inequality.

The Blame Game

Instead of confronting the real villain — a broken economic model that rewards capital over labor — the narrative has been hijacked by cultural scapegoats. Immigrants are blamed. Foreigners are blamed. China is blamed. But here’s what the data says:

• Crime rates among immigrants are lower than among native-born Americans.

• Immigration grows the economy and supports job creation.

• Foreign trade lowered costs for millions of American families, especially those living paycheck to paycheck.

But these facts don’t make headlines. Politicians prefer sensational stories — the one tragic murder by an undocumented immigrant rather than the 10,000 stories of honest, hardworking immigrant families contributing to the fabric of America.

The Fiscal Mirage

If America is serious about rebuilding, it needs to stop burning holes in its own budget. Massive tax cuts for billionaires are not free. They are federally-funded giveaways paid for by borrowing — often from the very countries the same politicians claim to fear.

So let’s get this straight:

• Importing cars from China is bad.

• But importing billions in loans from China to finance billionaire tax cuts is fine?

That’s not economic patriotism. That’s fiscal hypocrisy.

What the Real Problem Is: Wages, Not Jobs

When the unemployment rate is under 5%, it’s not a jobs crisis — it’s a wage crisis. Americans are working. They’re just not getting paid enough. And the “bring back manufacturing” myth doesn’t fix that, because modern factories don’t need armies of workers — they need machines.

Automation, AI, and robotics are redefining manufacturing. Even if every factory returned to U.S. soil tomorrow, the jobs wouldn’t come back with them. The machines would. That’s why higher wages across all sectors — especially services — are the real frontier.

Want to Compete With China? Team Up With India

If America truly wants to outcompete China in the 21st century, the answer isn’t to retreat inward. It’s to form smart strategic alliances — starting with India. With its massive, educated workforce, growing digital infrastructure, and democratic values, India is the natural counterbalance to China’s authoritarian economic rise.

Invest in trade, technology sharing, education, and co-manufacturing. Build partnerships, not walls.

A Smarter Vision

We don’t need to rewind the clock to the 1950s. We need to build a forward-looking economy where:

• Productivity gains are shared.

• Tax policies reward innovation and fairness.

• Immigrants are seen as assets, not threats.

• Global partnerships are leveraged, not demonized.

Because building a car — or a factory — means nothing if the economic system behind it still drives the working class off a cliff.

It’s time to stop romanticizing a past that never existed for everyone — and start building a future where prosperity is real, inclusive, and sustainable.

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Building a Car Before You Can Drive It: The Illusion of Reindustrialization https://t.co/NkHZYb93cc

— Paramendra Kumar Bhagat (@paramendra) May 30, 2025

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Jamie Dimon dropping BOMBS:

“Immigration… what the hell were we doing? The bottom 20% of our population’s wages haven’t gone up in 20 years. The Biden admin was wasting so much money on “green” stuff that we know won’t work… meanwhile our schools don’t work.” pic.twitter.com/Z58MEiGXhM

— Geiger Capital (@Geiger_Capital) May 30, 2025

If Robots Can Do Surgery

English: The mdonalds logo from the late 90s (Photo credit: Wikipedia)

If robots can do surgery then becoming a surgeon should be less complicated than flipping burgers at McDonald's. Massive rises in productivity can mean the average wages go up dramatically, granted political innovation keeps pace with innovations in technology.

When you use a computer today, do you do it because you understand how all the machine parts work? Do you care? Do you use it because it is slower than you?

Cars and planes are faster than human beings.

Assume 90% of the products and services are not even here. If the human brain is the pinnacle of evolution, then public policy should treat every human brain on earth like it were a gold mine, which is precisely what it is. I don't see the investment happening right now.

Don't blame robots for failures in public policy.

One person, one vote, one voice is a powerful concept. It just needs to be taken to its logical conclusion.

If racism is a Christian thing (colonization, slavery, segregation) then Christianity, the religion, is nothing to do with Christ. Any message against peace, justice and kindness is invalid in all religions. The temple needs to be cleaned up on a regular basis.

We are to create Heaven On Earth. Massive rises in productivity are to take us there. But Godless "visionaries" throw visions of hell on earth. Instead of an age of abundance they talk about abundant poor and useless people.

Artificial Intelligence can help us achieve one person, one vote, one voice 24/7, it can help us do away with the need for literacy. It can give us the perfect communication that a theoretical perfect market economy needs, one where a monopoly simply can not happen, and there is almost always perfect competition.

Technology is supposed to empower. Instead some prophesy helplessness for the masses. They are wrong.

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Productivity And Political Innovation

The computer as we know it has changed relentlessly over the past two decades. And not just one part. It is not like the processing power has gone up and up and up but everything else has stayed the same. And we don't struggle with it. We have expected all parts to get better.

But now, with all this talk of tremendous gains in productivity that awaits us, we only focus on the productivity gain part brought forth by innovation. But we don't expect political innovation to keep pace with it.

Humanity needs to stay on top of all this. It needs to organize itself through the one person, one vote, one voice principle taken to its logical global conclusion. I think we are looking at a future where We The People own 5-10% of every company, collectively. As in, companies don't just pay taxes. They also share some equity with the public.

If you take the masses out of the equation, very soon those productivity gains don't matter. Let's assume 90% of the products and the services of the future are not even here. Well, we will need people to be able to purchase those products and services. The per capita income will have to go up and up, not just in poor countries, but also in the rich countries.

What does the Moore's Law of political innovation say? Where are we in 20, 30, 50, 100 years?

I see species level political structures. A world government would be a good start.

Taking the masses out of massive productivity gains is not possible, not desirable. We need to tweak the political system a little.

Why The Minimum Wage Should Be $11 Immediately

It is not demand and supply that has kept wages stagnant. Unless the masses can purchase, you can not produce. A rising tide lifts all boats. Only when you throttle the market can wages stays stagnant. The wages have been kept artificially low.

It's not just economics though. It's also a matter of fairness. Someone working full time should be able to take care of themselves and their families. That should be the benchmark.

Forget minimum wage. We are at the cusp of the era of the Universal Basic Income. Rises in productivity will be so outlandishly dramatic, they are going to be off the radar screen. Old measuring tools will no longer work.

Universal Basic Income is not minimum wage. It is not unemployment benefits. It is a new concept.

I am for growing 10 times more food and let everyone just have it. I am for free internet access for everyone. It would be a money maker for every municipality. It would also be a community building exercise. People who might want free internet access might have to congregate. There is health value to that. NYC is about to make $500 million per year by turning all its phone booths into Gigabit WiFi hotspots.

For health, the US government should buy a copy of my book on behalf of every American. I would be happy to offer a 60% discount.

As for super cheap housing, I am waiting for some advances in nanotechnology.