Real Wages Fail to Match a Rise in Productivity For most of the last century, wages and productivity—

the key measure of the economy’s efficiency—

have risen together, increasing rapidly through the 1950s and ’60s and far more slowly in the 1970s and ’80s. But in recent years, the productivity gains have continued while the pay increases have not kept up.

Source: The New York Times, August 28, 2006 Explain the relationship between wages and productivity in this news clip in terms of real business cycle theory.