In discussing the fundamentals supporting economic expansion, I particularly want to single out the impressive growth of labor productivity. These increases in output per hour worked have been made possible by the harnessing of advances in technology in every aspect of business life.
The lessons learned at institutions such as the Olin School are being applied everywhere to trim inventories, shorten supply chains, and enhance firms' responsiveness to their customers' needs. Faster productivity growth implies that workers can look forward to more rapidly rising real wages over time. Because the economic pie will be getting larger, those wage gains will not come at the expense of profits.