To be sure, the growth rate of labor productivity is the primary determinant of how fast real wages can and will grow in the long run. If real wages grow faster than productivity, the profit rate will get squeezed. In a capitalist system, neither that pattern, nor one where real wages grow more slowly than productivity, causing the profit rate to rise, can go on indefinitely. In the long run, productivity growth and real wage growth must correspond. Since most people receive the lion's share of their incomes from wages and salaries, the growth of real wages is the principal determinant of how fast standards of living will rise.
Productivity is no abstract number.
In the long run, it is the name of the game. For example, with annual productivity growth of 2.5 percent and labor force growth of 1 percent, the economy's trend growth rate would be 3.5 percent per annum. The central job of monetary and fiscal policy is to manage the demand for goods and services so as to keep it in line with the economy's capacity to supply. Productivity growth is the crucial ingredient. Equip its workers with more and better capital.