ILO: U.S. Leads World in Productivity, Norway Leads in Value-Added Workhours
In its latest report entitled "Key Indicators of the Labour Market (KILM), Fifth Edition," the International Labour Office (Geneva, Switzerland) shows that the United States continues to lead the world by far in labor productivity per person employed in 2006 despite a rapid increase of productivity in East Asia where workers now produce twice as much as they did 10 years ago. Americans also work more hours per year than workers in most other developed economies, the report shows, which is why, measured as value added per hour worked, Norway has the highest labor productivity level (US$37.99), followed by the United States (US$35.63) and France (US$35.08).
The report shows that the productivity gap between the United States and most other developed economies continued to widen. The acceleration of productivity growth in the United States has outpaced that of many other developed economies: With US$63,885 of value added per person employed in 2006, the United States was followed at a considerable distance by Ireland (US$55,986), Luxembourg (US$55,641), Belgium (US$55,235) and France (US$54,609). Increase in productivity is mainly the result of firms better combining capital, labor, and technology; a lack of investment in people (training and skills) as well as equipment and technology can lead to an underutilization of the labor potential in the world, ILO notes.
"The huge gap in productivity and wealth is cause for great concern," ILO Director-General Juan Somavia said in a Sept. 2 press release. "Raising the productivity levels of workers on the lowest incomes in the poorest countries is the key to reducing the enormous decent work deficits in the world."
In East Asia where productivity levels showed the fastest increase, doubling in ten years, output per worker was up from one-eighth in 1996 to one-fifth of the level found in the industrialized countries in 2006. Meanwhile, in South-East Asia and the Pacific productivity levels were seven times less and in South Asia eight times less than in the industrialized countries, the report reveals. In the Middle East and Latin America & the Caribbean, the value added per person employed is nearly three times less than it is in the developed economies; in Central & South Eastern Europe (non-EU) & CIS the level is 3.5 times less, and four times less in North Africa. The widest gap is observed in sub-Saharan Africa where the productivity level per person employed is one-twelfth of that of a worker in the industrialized countries.
Also according to the report, 1.5 billion people in the world--or one-third of the working-age population--are "potentially underutilized." This new estimate of labor underutilization is comprised of the 195.7 million unemployed people in the world and nearly 1.3 billion working poor who live with their families on less than US$2 per day per family member. Whereas the unemployed want to work but lack the opportunity to do so, the working poor are working but do not earn enough to escape poverty. The report also estimates that half of all women and men employed are considered vulnerable to poverty. Viewed in a global perspective, most of these women and men work in the informal economy and carry a higher risk of being unprotected, without social security and without a voice at work. More than 70 percent of the workers in sub-Saharan Africa and South Asia are in such vulnerable employment, the report says.