The Mystery of America’s Missing Capital Investment

The public is in a foul mood this campaign season, in part because living standards have stagnated. The median household income in January was slightly lower, adjusted for inflation, than it was in January 2000, according to Sentier Research. Pay is lagging partly because companies have been underinvesting in the tools that workers need to be more productive. Those tools, which range from machines to software to land and buildings, are collectively known as capital.

The chart under the magnifying glass shows that companies are adding to the national stock of capital at an historically slow pace. In a separate calculation, the U.S. Bureau of Labor Statistics says that what it calls “capital intensity”—the ratio of capital used to hours worked—was so weak that it actually subtracted from workers’ productivity from 2010 through 2014.