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33 sats \ 3 replies \ @Undisciplined 20 Nov \ on: Productivity of the World’s Largest 30 Economies (2005-2025) econ
Productivity is important but it’s less relevant to standard of living than total compensation
Yeah, I agree. Productivity is just an economic indicator, and sometimes it’s used to make fun of some countries. Like, just because a country’s productivity is low, it doesn’t mean people aren’t working hard.
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It’s a useful metric for how smoothly an economy is converting labor into stuff.
It’s misleading for comparing European countries, which have tons of labor “protections”, with America because Americans work a lot more hours and labor has diminishing marginal returns like everything else.
If dumb policies made it infeasible to work so much, then Americans would be poorer and total output would be less but American labor would be more productive.
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America relies upon a lot of undocumented workers providing work at very low rates of pay.
Oil revenue is also a significant factor in many countries on the graph- eg Norway and Saudi Arabia.
Having a wealth of oil or other natural resources can hugely distort apparent 'productivity'
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