Worker productivity (see attached graph at the bottom) has increased, but American “productivity” gains have been limited since 1972 (see the yellow graph below). Had we continued to experience the post WW2 productivity gains the economy had from 1948 to 1972, the economy would be almost twice as large. Meanwhile, in Biden’s first term of office, the US experienced losses in productivity and Americans are experiencing that loss partially through the higher prices they are paying for the fewer goods and services available.

https://www.cnn.com/2021/12/07/economy/labor-productivity-third-quarter-revised/index.html

The problem is not the worker or the development of technology to make the worker more productive. The problem is at least threefold, which is why it is hard to increase the standard of living of workers.

1. The percentage of the workforce engaged in jobs that don’t “make” anything. Government employment primarily at the local level has continued to increase steadily over the years. All of these workers consume goods and services, but don’t produce goods and services, so they are supported by taxes, which are a redistribution of the goods and services produced by workers and owners to other people. Even inside companies, the “bean counters, compliance people, attorneys, etc.” have all increased relative to the line workers. I used to do turnarounds of troubled companies and one of the things I found was about 10–15% of the workers in “overhead” jobs were not needed. Eliminate those jobs and “workers” still produced just as much, but the “productivity” per employee soared 10–15%. Whether workers pay this cost directly out of their paychecks in taxes or indirectly because companies pay these taxes and employees leaving less money to pay the front line workers, it amounts to the same thing. Regulations, taxes, excess overhead hurts workers and owners.
2. Lack of capital investment for more than twenty years. As American companies found offshoring to be more profitable than domestic investment due to high US operating costs especially taxes and regulatory costs, they cut back on investing in the US and making their workers more productive. Some of this reduce investment was due to the high cost of labor relative to that overseas meaning even after making workers more competitive with productivity tools they were still not competitive globally. You see a similar thing happening today due to Biden’s policies discouraging domestic investment (not their intent, but still the result).
3. Not directly related to productivity, but directly related to worker’s standard of living is the decreasing percentage of workers. An aging population and fewer “working age” people working, means the goods and services being produced by each worker are being spread over a larger base of people. The US will likely have to increase retirement age to 70 or work on a transitional retirement strategy for people between 62–70 to encourage them to work parttime in order to add more workers into the economy and thus produce more economic growth. More economic growth would mean needing to tax workers less to support other people.

Bonus: Under Biden thousands of highly productive energy sector workers have been “idled”. The value of their productivity has been lost to the economy. Whether you support Biden’s Green Energy Policies or not, as Biden has said, “there is a cost to his policies” and that cost is being experienced by All Americans through the high inflation which is serving to reduce standards of living to account for the reduced production of energy. Regulation to prevent abuse is a good thing, but excessive regulation chokes economic growth…

Bottomline, do not confuse individual worker productivity with US productivity. To raise standards of living in the US, we need more workers making “stuff” and each worker making more stuff and fewer employees pushing “paper” to comply with bureaucratic regulations and corporate policies. The power of capitalism is seen by the fact, that it manages to survive in a world where bureaucrats are literally choking it to death.