THE COMPENSATION$-$ PRODUCTIVITY GAP The compensation $-$ productivity gap refers to the difference between real hourly compensation E $-3.$ Des labor productivity $.$ The U$.$S$.$ Bureau of Labor Statistics defines labor productivity as real compen per hour worked $($i$.$e$.$ how efficiently labor is used in producing goods and services product $,$ capital investment $,$ capacity utilization $,$ use of intermediate inputs $,$ improved managerial There are many possible factors affecting labor productivity growth $,$ including changes in tech$-$ skills or organization of production $,$ and improved skills of the workforce $.$ the United States $,$ pay has not been keeping up with productivity $.$ Productivity growth promotes rising living standards in the following manner $.$ Increases in productivity growth indicate companies $\text{'}$ investments in capital equipment and information technology $.$ Examples distribution centers $.$ Examples of information technology include structured databases of capital equipment include new manufacturing facilities $,$ research and development labs $,$ and containing expert information to help end users make informed decisions in complex situations $.$ For instance, physicians may access databases to help them diagnose health conditions based on symptoms and health histories $.$ Another example occurs in the marketing field where information systems enable companies to identify customers for new products and services based on a variety of factors $,$ including household income and purchasing history $.$ Since the $1970$s $,$ real hourly compensation has lagged labor productivity growth as shown in Figure E $-$ The growth of productivity and real hourly compensation in the nonfarm business $($which accounts for three $-$ fourths of output and employment in the total U$.$S$.$ economy $)$ was comparable until $1973.$ The annual change in productivity averaged $2\mathrm{.}8$ percent and real compensation growth averaged $2\mathrm{.}6$ percent during the $1947-1973$ period $.$ In $1973-1979$ Summurize the article