Long working hours, relatively good tools, and an efficient business environment mean that we produce more per person than anybody else.
It’s Labor Day 2017, and hopefully you’re not laboring, at least not too hard. We’re trying to take at least one day off this 3-day weekend and so are putting up a blog post from several Labor Days ago.
Americans have been told for years that we are the most productive workers in the world. Leaders as diverse as the current president of the AFL-CIO, Richard Trumka, and the CEO of the U.S. Chamber of Commerce, Thomas Donohue, have been proclaiming this.
The source of these praises is likely a report by the International Labor Organization of the United Nations a few years ago which concluded that the U.S. “leads the world in labor productivity.”
According to this U.N. report, the U.S. worker was at the top among all the nations based on the value produced per worker per year. This is measured by dividing the total annual GPD—gross domestic product (the total value of all goods and services created)—by the number of workers.
How Come We’re So Productive?
It’s partly because we work more hours per year than any of the European or most other relatively wealthy countries.
But we are also more productive per working hour. According to Mr. José Manuel Salazar-Xirinachs of the International Labor Organization, our 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.”
In other words, we are more productive because
- we have better tools—better computers, better training, and better overall technology
- businesses operate with comparatively less regulation
- we operate within a relatively fair legal system
- there are relatively low barriers to starting up businesses
- bankruptcy laws encourage more risk-taking by entrepreneurs—both those investing money and those investing in sweat equity
- government’s general lack of direct ownership in business
- there’s relatively stiff business competition in many parts of the economy, so that companies are forced to get as much out of their employees as possible
- although our balance of trade seems always out of balance—with imports far exceeding exports—given the size of our economy the total value of our exports are still huge
All of these factors improve our productivity.
Have a good Labor Day. If you are working too hard and still falling behind, we may be able to help make your next Labor Day a much better one. Please get in touch with us.