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Between 1991 and 2012 the average annual increase in real wages in Britain was 1.5% and in America 1%, according to the Organisation for Economic Co-operation and Development, a club of mostly rich countries.

Real wage growth in Germany from 1992 to 2012 was just 0.6%; Italy and Japan saw hardly any increase at all.

And the dramatic dip in productivity growth after 2000 seems to have coincided with an apparent acceleration in technological advances as the web and smartphones spread everywhere and machine intelligence and robotics made rapid progress.

A second explanation for the Solow paradox, put forward by Erik Brynjolfsson and Andrew McAfee (as well as plenty of techno-optimists in Silicon Valley), is that technological advances increase productivity only after a long lag.

John Fernald, an economist at the Federal Reserve Bank of San Francisco and perhaps the foremost authority on American productivity figures, earlier this year published a study of productivity growth over the past decade. He found that its slowness had nothing to do with the housing boom and bust, the financial crisis or the recession. Instead, it was concentrated in ICT industries and those that use ICT intensively.

Once an online course has been developed, it can be offered to unlimited numbers of extra students at little extra cost.

For example, new techniques and technologies in medical care appear to be slowing the rise in health-care costs in America. Machine intelligence could aid diagnosis, allowing a given doctor or nurse to diagnose more patients more effectively at lower cost. The use of mobile technology to monitor chronically ill patients at home could also produce huge savings.

Health care and education are expensive, in large part, because expansion involves putting up new buildings and filling them with costly employees. Rising productivity in those sectors would probably cut employment.

The integration of large emerging markets into the global economy added a large pool of relatively low-skilled labour which many workers in rich countries had to compete with. That meant firms were able to keep workers’ pay low.

Productivity growth has always meant cutting down on labour. In 1900 some 40% of Americans worked in agriculture, and just over 40% of the typical household budget was spent on food. Over the next century automation reduced agricultural employment in most rich countries to below 5%,

A new paper by Peter Cappelli, of the University of Pennsylvania, concludes that in recent years over-education has been a consistent problem in most developed economies, which do not produce enough suitable jobs to absorb the growing number of college-educated workers.

merica’s Bureau of Economic Analysis draws data from surveys of manufacturers, builders and retailers, as well as from trade and financial flows, among other sources. These data are used to estimate the components of GDP, such as total investment and net exports

Real, or inflation-adjusted, GDP is needed to compare figures across time periods, while GDP per person is best for understanding how individual incomes are evolving.

Big retailers and fashion companies have repeatedly tried and failed to develop alternatives, experimenting in India, Africa and Latin America, only to run into infrastructure bottlenecks and shortages of skilled managers or workers.

India was not organized for large-scale, timely production,

Africa did not have enough workers with the right skills for high-volume labeling and shipping,

and Latin America did not have enough workers interested in operating sewing machines.

In Guatemala, the quality was excellent, he said, but, “They can’t handle big orders and they’re slow on delivery.”

What may save Bangladesh from a sharp, immediate drop in export orders is simply that most Southeast Asian factories are already fully booked with orders from multinationals fleeing China’s ever-rising costs.

Dozens of impoverished countries make T-shirts and other very basic clothing. But only a few countries — really just China, Bangladesh, Vietnam, Indonesia and to some extent Cambodia and Pakistan — have developed highly complex systems for producing and shipping tens of thousands or even hundreds of thousands of identical, high-quality shirts, blouses or trousers to a global retailer within several weeks of receiving an order.

He said that he and a couple of other suppliers of elite retail chains always worried about Bangladesh’s reliance on high-rise factories,

In 2008, 80 percent of adults aged 25 to 54 in the E.U. 15 were employed (and 83 percent in France). That’s about the same as in the United States. Europeans are less likely than we are to work when young or old, but is that entirely a bad thing?

And Europeans are quite productive, too: they work fewer hours, but output per hour in France and Germany is close to U.S. levels.

After all, while reports of Europe’s economic demise are greatly exaggerated, reports of its high taxes and generous benefits aren’t. Taxes in major European nations range from 36 to 44 percent of G.D.P., compared with 28 in the United States. Universal health care is, well, universal. Social expenditure is vastly higher than it is here.

So if there were anything to the economic assumptions that dominate U.S. public discussion — above all, the belief that even modestly higher taxes on the rich and benefits for the less well off would drastically undermine incentives to work, invest and innovate — Europe would be the stagnant, decaying economy of legend. But it isn’t.

Last year, Brazilian politicians used subsidies and the threat of continued high tariffs on imports to persuade Foxconn — which makes smartphones and computers in Asia for dozens of technology companies — to start producing iPhones, iPads and other devices in a factory north of São Paulo.

“Closing our border is a 20th-century thought, and it will only weaken the economy over the long term,”

When teachers demand rigorous work, students often rise to the occasion, whereas tracking students at different cognitive levels tends to “diminish learning and boost inequality”. Low expectations are often duly rewarded.

America’s classrooms do not fare well in this book. Against these examples of academic achievement, the country’s expensive mistakes look all the more foolish. For example, unlike the schools in Finland, which channel more resources to the neediest kids, America funds its schools through property taxes, ensuring the most disadvantaged students are warehoused together in the worst schools.

After adjusting for multiple sources of bias and differences in sample construction, we establish that (1) the U.S. high school graduation rate peaked at around 80 percent in the late 1960s and then declined by 4-5 percentage points; (2) the actual high school graduation rate is substantially lower than the 88 percent official estimate; (3) about 65 percent of blacks and Hispanics leave school with a high school diploma and minority graduation rates are still substantially below the rates for non-Hispanic whites.

Heckman, Lochner, and Todd (2008) show that in recent decades, the internal rate of return to graduating high school compared to dropping out has increased dramatically and is now over 50 percent

These trends are for persons born in the United States and exclude immigrants. The recent growth in unskilled migration to the U.S. further increases the proportion of unskilled Americans in the workforce apart from the growth due to a rising high school dropout rate.

The most significant source of bias in the official statistics comes from including GED (General Educational Development) recipients as high school graduates.

A substantial body of scholarship summarised in Heckman and LaFontaine (2008) shows that the GED program does not benefit most participants, and that GEDs perform at the level of dropouts in the U.S. labour market.

Men now graduate from high school at significantly lower rates than women

Evidence suggests a powerful role of the family in shaping educational and adult outcomes. A growing proportion of American children are being raised in disadvantaged families.

Almost everything is being subordinated to protect retirees.

“for how long will we continue to sacrifice investments in our nation’s children and youth ... to spend more and more on the aged?”

In a Pew poll, 87 percent of respondents favored present or greater Social Security spending; only 10 percent backed cuts. Results were similar for 18 of 19 programs, foreign aid being the exception.