Report: U.S. workers are most productive

GENEVA - 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.

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 U.S. is second at $35.63, about a half dollar ahead of third-place France.

Seven years ago, French workers produced over a dollar more on average than their American counterparts. The country led the U.S. in hourly productivity from 1994 to 2003.

The U.S. 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.

It pales, however, in comparison with the annual hours worked per person in Asia, where seven economies — South Korea, Bangladesh, Sri Lanka, Hong Kong, China, Malaysia and Thailand — surpassed 2,200 average hours per worker. But those countries had lower productivity rates.

America's increased productivity "has to do with the ICT (information and communication technologies) revolution, with the way the U.S. organizes companies, with the high level of competition in the country, with the extension of trade and investment abroad," said Jose Manuel Salazar, the ILO's head of employment.

The ILO report warned that the widening of the gap between leaders such as the U.S. and poorer nations has been even more dramatic.

Laborers from regions such as southeast Asia, Latin America and the Middle East have the potential to create more wealth but are being held back by a lack of investment in training, equipment and technology, the agency said.

In sub-Saharan Africa, workers are only about one-twelfth as productive as those in developed countries, the report said.

"The huge gap in productivity and wealth is cause for great concern," ILO Director-General Juan Somavia said, adding that it was important to raise productivity levels of the lowest-paid workers in the world's poorest countries.

China and other East Asian countries are catching up quickest with Western countries. Productivity in the region has doubled in the past decade and is accelerating faster than anywhere else, the report said.

But they still have a long way to go: Workers in East Asia are still only about one-fifth as productive as laborers in industrialized countries.

The vast differences among China's sectors tell part of the story. Whereas a Chinese industrial worker produces $12,642 worth of output — almost eight times more than in 1980 — a laborer in the farm and fisheries sector contributes a paltry $910 to gross domestic product.

The difference is much less pronounced in the United States, where a manufacturing employee produced an unprecedented $104,606 of value in 2005. An American farm laborer, meanwhile, created $52,585 worth of output, down 10 percent from seven years ago, when U.S. agricultural productivity peaked.

Unfortunately, I don't regard this ILO report as very reliable. Not only is produced by a U.N. agency founded by Samuel Gompers (to be exact, the ILO was formed in 1919 under the Treaty of Versailles, and was made into an agency of the U.N. in 1946) and that is dedicated to the leftwing ideals of "Social Justice" and "Decent Work", in producing the KILM-18 numbers, these comparisons are doing with PPPs that I think that are particularly questionable (unencouraging sentences such as "The total economy estimates of gross value added used for KILM 18 are expressed in terms of 1990 US dollars, as the 1990 PPP made it possible to compare the largest set of countries. For the individual sectors the base year is 1997. This year was chosen due to the availability of a new set of multilateral PPPs by industry for this benchmark year. The agricultural sector PPPs were originally for 1995, but have been extrapolated to 1997 to enhance the comparability between sectors." appear in the report. To me, that means that is probably very little actual comparability. When one is "extrapolating" PPPs from 1995 to 1997, that signals to me that any value that the original PPP measure might have had is probably gone.)

The KILM-18 portion of the report is available here

The overall KILM report's webpage is here.

You can read the history of the ILO here.

You can read the self-description of the ILO here:

The International Labour Organization (ILO) is devoted to advancing opportunities for women and men to obtain decent and productive work in conditions of freedom, equity, security and human dignity. Its main aims are to promote rights at work, encourage decent employment opportunities, enhance social protection and strengthen dialogue in handling work-related issues.
In promoting social justice and internationally recognized human and labour rights, the organization continues to pursue its founding mission that labour peace is essential to prosperity. Today, the ILO helps advance the creation of decent jobs and the kinds of economic and working conditions that give working people and business people a stake in lasting peace, prosperity and progress.

Looking through the report's methodology, I don't think that I would stake a lot on its accuracy. This paragraph, for instance, also seems to me to be using a bit of the old black magic to make numbers appear: The PPP measures for manufacturing, wholesale and retail trade, and transport and communication used here are derived from a new dataset of multilateral PPPs for 26 mostly OECD countries for 1997.17 The industry-oforigin PPPs are mostly based on unit value ratios (UVRs). The unit values represent sales values divided by quantities for similar products or product groups, derived from national production censuses or industry surveys, which are matched between economies. In practice, unit value ratios have been complemented with selected expenditure PPPs for individual expenditure categories from the ICP programme, in particular for industries and products for which no reliable UVRs were available. These expenditure PPPs have been adjusted from market prices to basic prices using the margins for transport and distribution and sales and value added taxes.

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