Huzzah or Huh?

5 September 2007



US Workers are Most Productive in the World

The headline is misleading, but that’s what the US media have decided in their misreading of an International Labor Organization report on worker productivity. The AP wrote, “American workers stay longer in the office, at the factory or on the farm than their counterparts in Europe and most other rich nations, and they produce more per person over the year.” Of course, on an hourly basis, the Norwegians are tops. They just like to take time off as well.

Measured the way the American media have noticed, “The average US worker produces $63,885 of wealth per year, more than their counterparts in all other countries, the International Labor Organization said in its report. Ireland comes in second at $55,986, followed by Luxembourg at $55,641, Belgium at $55,235 and France at $54,609.”

Part of the problem is the methodology of this part of the ILO study. It takes GDP and divides it by the number of people employed. Right there, with a huge illegal immigrant population, America’s got a problem with its inputs. Much of the work shows up in the statistics but not the workers. Thus, the figure is inflated because the divisor is too small.

The AP noted, “The US employee put in an average 1,804 hours of work in 2006, the report said. That compared with 1,407.1 hours for the Norwegian worker and 1,564.4 for the French.” However, “Norway, which is not an EU member, generates the most output per working hour, $37.99, a figure inflated by the country’s billions of dollars in oil exports and high prices for goods at home. The United States is second at $35.63, about a half dollar ahead of third-place France.” The statisicians at the ILO couldn't figure out how to adjust for Norway's price index?

One of the fundamentals in economics is that every individual is trying to maximize his utility, getting the best situation possible. That goes far beyond mere money, and leisure time is a big component in utility for most people. Americans in particular speak of spending time with their families and in their communities away from their desks and the factory floor. The Norwegians are 400 hours a year better off (10 working weeks if one wants to do the math), in that case, and at a very small financial cost. Productivity is a virtue, but so is stopping to smell the roses.

© Copyright 2007 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.


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