Great Graphic: Unexpected Results Of G7 Comparison Of Work And Productivity

Here are two Great Graphics from the UK’s Office of National Statistics. The top chart shows the average hours worked in the G7 countries since the early 1990s. It will surprise many to least that for most of this period, Italy’s average work week was longer than the US. Now it is a little below.  Japanese workers had the longest work week in 1993. German workers have the shortest work week consistently over the past 20 years followed by France.   

The length of the work week may not be the key metric. What part of the population is working, or to say the same the same thing, it is aggregate hours that is more important than than average length of the work week. 

Just as important is output worker. That is a measure of productivity. This is what this lower chart captures:  GDP per worker.  The UK statistics office produced the charts, and they are understandably from the UK’s point of view. The two bars are for 2012 and 2013 respectively.  The time series is fairly stable, so one can imagine that the 2014 bar is similar.  

The US has easily the greatest output per worker, almost 40% above the UK’s, according to this chart. This gap is the largest since the ONS tracked this series beginning in to 1990.   Italy is in actually second in the G7, about 15% above the UK. Japan is the weakest. The UK’s productivity is about 10% greater than the Japan’s. Germany’s does not stand out. That suggests that its ability to keep unit labor costs down is a function of wage restraint.  

Another measure of productivity is GDP per hour worked.  Here Germany and France do better, at 27-28% above the UK, but behind the US, where output per hour worked is about 30% above the UK. Italy’s output per hour is about 17% above the UK’s.  

Policy makers and economists throw around the concept of structural reforms so much that it may have lost of its meaning. In this context though, structural reforms can be thought of as measures that boost productivity, directly and indirectly. 

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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