Corporate & Securities Law

Who are the most productive workers?

Subscribers to American Exceptionalism will reflexively say American workers are the most productive. This is commonly heard on the campaign trail, along with a similar tale of our military being the best equipped, most formidable force the planet has ever seen. But is it true?

According to one source, in 2009, it was by one measure, GDP per hour worked. Americans produced $38 of GDP per hour worked, compared with oil-rich Norway’s $36.24 and France’s $35.74. The data is summarized here. No doubt some of this had to do with the recent increase in layoffs at American firms. The 80-20 rule applies in business — 80% of the work is done by 20% of the workers — so getting rid of people in the bottom 80% in a way that doesn’t hurt morale (that is, during a downturn) is a surefire way to increase productivity.

But before we go around thumping our chests, we should look down the page at the numbers from 2005, when Americans were 9th in terms of productivity. Not only were American workers behind Luxembourg, Belgium, the Netherlands, Greece, France, Italy, Ireland, and Germany, but they produced nearly $12 more per hour worked than they did in 2009. The increase in productivity ranking from 2005 to 2009 no doubt is because of the significantly greater increases in US layoffs and the 80-20 rule described above.

Notably, French workers are  historically among the very highest in this measure of productivity, despite the ridicule in which many Americans hold France’s commitment to work.

Also interesting from these tables are comparisons with worker productivity in the 1950s. The US was the productivity leader in the 1950s, but a look at the other nations shows some dramatic changes in opposite directions. Vanquished nations, like Germany and Japan, scored terribly in 1950, but are highly ranked today, while (oil-rich) Venezuela was second to the US in 1950, but was 34th in 2009. One doesn’t need to look far for an explanation as to how Venezuela is squandering its future.

Full post as published by Truth on the Market on September 04, 2010 (boomark / email).