Especially For Labor Day
By Pejman Yousefzadeh Posted in Economy — Comments (2) / Email this page » / Leave a comment »
American workers continue to outstrip their counterparts in productivity terms:
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.
They also get more done per hour than everyone but the Norwegians, according to a U.N. report released Monday, which said the United States "leads the world in labor productivity."
The average U.S. 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.
The productivity figure is found by dividing the country's gross domestic product by the number of people employed. The U.N. report is based on 2006 figures for many countries, or the most recent available.
Only part of the U.S. productivity growth, which has outpaced that of many other developed economies, can be explained by the longer hours Americans are putting in, the ILO said.
The U.S., according to the report, also beats all 27 nations in the European Union, Japan and Switzerland in the amount of wealth created per hour of work -- a second key measure of productivity.
Want to increase productivity even more? Implement tax reform that broadens the base and brings about low marginal rates:
Allowing people to take home the full value of their paychecks will bring about another benefit -- increased worker productivity. This study, done jointly by Professor Edward C. Prescott of the University of Minnesota, and the Federal Reserve Bank of Minneapolis, demonstrates a powerful correlation between low marginal tax rates and high worker productivity. Additionally, the study finds that high marginal rates -- such as those found in European countries, don't even help fund the welfare states of those countries, because they end up reducing labor market participation, thus resulting in a less wealthy citizenry.
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Especially For Labor Day 2 Comments (0 topical, 2 editorial, 0 hidden) Post a comment »
I don't know if this is a competition I would like to win... A lot of me would love to stop working at 6pm for once and spend more time with my family. :-/
(Add to that the fact that half of the people in my office spend most of the day playing solitaire on their computers, the productivity is likely concentrated in a few people, such that the rest could take off early without putting a dent in the numbers!)
Can there be a worse way to measure to productivity per employee? Its widely known that the average US employee works more hours per year than their counterpart in any significantly industrialized nation. The difference doesn't fully account for the reported 14% difference in productivity, but it certainly accounts for some of it.
As for the cited study, it fails to show that the reduction in "labor market participation" with higher marginal rates is not made up for by a different distribution of taxation across the population. It can't do that, since this is a subjective judgement, not an objective one. Many RedStaters will be happier in a system with lower marginal rates and a much less egalitarian distribution of wealth. Many other people would be happier in such a system. Is someone right and someone else wrong?