Relative Productivity Levels in OECD

A couple of weeks ago, I suggested that someone ought to publish a comparative ranking of OECD countries by productivity per HOUR of work (rather than the more common, but utterly misleading, measure of GDP per capita).

Turns out the Economic Policy Institute in Washington has done exactly that in their latest version of their flagship publication, “State of Working America.”

They are releasing bits of text and tables from the report via a special website (www.stateofworkingamerica.org). Here is the link for the particular table which ranks OECD countries by relative productivity (measured with U.S. levels = 100).

http://www.stateofworkingamerica.org/tabfig/08/SWA06_Tab8.3.jpg

Canada scores an 80. That’s down from the 86 we scored back in 1988, when we signed a free trade agreement that was supposed to harmonize our productivity and generate huge economic gains.

There are 5 European countries, however, that match or exceed U.S. productivity levels: France (107), Belgium (113), Ireland (104), Netherlands (100), and the leader Norway (125).

I’m not sure exactly how the authors calculated this ranking (comparisons of productivity LEVELS, as opposed to growth rates, are notoriously difficult due to problems of comparability, exchange rate effects, etc. — which is probably why you don’t see tables like this very often). Some of the findings in the table strike me as fishy. I have never believed, for example, that Irish GDP is as high as it is reported, nor that Italy’s is as low. I’ve been to both countries and seen what people actually do.

Ay any rate, however, this is useful ammo in the battle against those who still argue that U.S.-style “flexibility” is the only way to generate productivity.

One comment

  • You get a similar kind of picture when you look at the US Bureau of Labour Statistics data on output per hour levels in manufacturing – which are more readily comparable. Economy wide business sector GDP per hour comparisons are, as you suggest, a bit suspect since the sectoral mix is so different.

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