American Workers Most Productive in the World
Recently on the BNET Intercom we noted the results of a UN study which concluded that, compared internationally, Americans are pretty lazy. We also asked whether American wages were likely to fall if workers in other countries were willing to work harder for less.
There were a number of smart replies and several people pointed out that there is a reason Americans deserve to earn more. We're more productive. For example, meldot commented:
"U.S. workers have a choice - work smarter or watch our wages compress. The only reason we deserve higher wages is because we can do it better, more efficiently, faster."Another report out yesterday confirms what meldot and others were saying about American workers. The International Labor Organization ranked American workers as the most productive in the world. The Irish came in second. East Asian workers won the titled of most improved -- doubling their productivity in the last ten years.
How do we explain this gap in productivity? Other countries have equal levels of education and Korean workers (who work the longest hours according to the ILO) are certainly not lazy, but each Korean worker still produces only 68% of the total of his US counterpart. Recent research by McKinsey & Co explaining what Europe must do to close the productivity gap sheds some light on why American workers produce so much:
Economies must liberalize their product markets and allow competitors to enter and exit markets freely....
A level playing field allows productive businesses to thrive while the rest fall by the wayside. To develop innovations and create more value, entrepreneurs need a large, unfragmented market with fewer bureaucratic hurdles.Interestingly, the study also concludes that "the welfare state--defined in the narrow sense as social transfers, entitlements to sick leave and maternity leave, social-insurance payments, and the labor taxes to pay for them--directly influences only a small part of Europe's 19 percent labor input gap."
The conclusion is clear, more than anything intrinsic in our workers, it's the fair and open competition fostered by the American business environment that should get the credit for our outstanding productivity. Still, Americans can come back to work after Labor Day today with a little bit of pride that they've retained the title of world champions of productivity.