Neil Irwin noted the incredibly weak productivity growth of the last six years and then considered three possible explanations. Unfortunately, he left out what may be the plausible one: labor is cheap.

The high unemployment of the last seven years has left many people desperate for work. As a result, they are willing to work for very low wages. If businesses can get people at very low wages, they don't mind having them do relatively low productivity tasks. For example, Walmart will have large numbers of workers standing around waiting to help customers. Convenience stores will remain open all night even though only a few people an hour may come in between midnight and 5:00AM.

If these stores had to pay workers higher wages, then many of these jobs would disappear. This would raise average productivity by eliminating many of the least productive jobs. If the Fed doesn't raise rates to reduce the pace of job creation, we may get a chance to test this theory.