Final answer:
The average product of labor measures the output produced per worker, which helps in assessing productivity levels and is related to the determination of wage levels over time. Historical data shows substantial growth in worker productivity in the U.S. economy since the 1970s.
Step-by-step explanation:
The average product of labor measures output per worker. This metric takes the total output produced by a firm and divides it by the number of laborers used to make that output. By tracking how much each worker contributes on average to the total output, companies and economists can assess productivity levels. For instance, data from the U.S. Department of Labor, Bureau of Labor Statistics showed that the average U.S. worker in 2020 produced over twice as much per hour than in the 1970s, illustrating significant productivity growth over time.
Moreover, productivity growth is directly tied to wage levels. As productivity per hour is an important determinant of wages, employers will generally pay workers based on the value of the output they produce, helping to align wages with worker productivity in the long run.