Editor’s Word: This story initially appeared on Smartest Dollar.
With quite a few financial specialists predicting that the U.S. is headed towards recession, one of many many regarding alerts is a pointy decline in labor productivity.
After greater than a decade of below-average productivity growth, the COVID-19 pandemic raised the prospect of a productivity boom. Many low-productivity jobs have been eradicated early within the pandemic, whereas main infrastructure investments and the accelerated adoption of automation and synthetic intelligence created situations for productiveness to rise.
However newer knowledge has proven productiveness declining. The Bureau of Labor Statistics reported a 7.5% decline in labor productiveness throughout the first quarter of 2022, the steepest decline since 1947.
Productiveness is a helpful metric for assessing the economic system as a result of it displays the economic system’s potential to generate items and providers from the identical quantity of labor. Productiveness progress can concurrently profit companies by elevated income, customers by elevated availability of products and providers, and staff by elevated compensation.
In current a long time, nonetheless, the hyperlink between productiveness progress and wage progress has weakened. Consultants time period this phenomenon the “productivity-pay gap.” Starting within the late Seventies, the expansion price for compensation started to degree out, at the same time as labor productiveness continued to extend.
To find out the states with the best labor productiveness, researchers at Smartest Greenback divided every state’s whole value-added output by its whole annual hours labored. The information used on this evaluation is from the U.S. Bureau of Labor Statistics Office of Productivity and Technology. Learn extra about our methodology on the finish.
Listed here are the states with the best labor productiveness.
15. Pennsylvania
- Labor productiveness: $79.26
- Whole value-added output: $702,670,372,000
- Whole employment: 5,392,400
- Common annual hours per employee: 1,644
14. Texas
- Labor productiveness: $80.54
- Whole value-added output: $1,640,004,984,000
- Whole employment: 11,749,000
- Common annual hours per employee: 1,733
13. Wyoming
- Labor productiveness: $80.62
- Whole value-added output: $31,586,315,000
- Whole employment: 233,400
- Common annual hours per employee: 1,679
12. North Dakota
- Labor productiveness: $82.06
- Whole value-added output: $48,299,490,000
- Whole employment: 353,500
- Common annual hours per employee: 1,665
11. Colorado
- Labor productiveness: $82.26
- Whole value-added output: $334,379,906,000
- Whole employment: 2,540,100
- Common annual hours per employee: 1,600
10. Maryland
- Labor productiveness: $82.34
- Whole value-added output: $310,204,445,000
- Whole employment: 2,313,200
- Common annual hours per employee: 1,629
9. Illinois
- Labor productiveness: $88.42
- Whole value-added output: $778,025,075,000
- Whole employment: 5,326,200
- Common annual hours per employee: 1,652
8. Alaska
- Labor productiveness: $90.44
- Whole value-added output: $39,763,770,000
- Whole employment: 262,600
- Common annual hours per employee: 1,674
7. New Jersey
- Labor productiveness: $91.21
- Whole value-added output: $548,008,610,000
- Whole employment: 3,655,500
- Common annual hours per employee: 1,644
6. Connecticut
- Labor productiveness: $98.65
- Whole value-added output: $247,743,547,000
- Whole employment: 1,538,800
- Common annual hours per employee: 1,632
5. Massachusetts
- Labor productiveness: $100.72
- Whole value-added output: $533,657,907,000
- Whole employment: 3,288,900
- Common annual hours per employee: 1,611
4. California
- Labor productiveness: $103.30
- Whole value-added output: $2,729,409,518,000
- Whole employment: 15,875,600
- Common annual hours per employee: 1,664
3. Delaware
- Labor productiveness: $104.53
- Whole value-added output: $66,888,567,000
- Whole employment: 404,900
- Common annual hours per employee: 1,580
2. Washington
- Labor productiveness: $106.09
- Whole value-added output: $536,309,572,000
- Whole employment: 3,071,500
- Common annual hours per employee: 1,646
1. New York
- Labor productiveness: $117.86
- Whole value-added output: $1,530,281,417,000
- Whole employment: 8,106,800
- Common annual hours per employee: 1,602
Methodology
The information used on this evaluation is from the U.S. Bureau of Labor Statistics Office of Productivity and Technology (OPT). To find out the states with the best labor productiveness, researchers divided every state’s whole value-added output by its whole annual hours labored. Within the occasion of a tie, the state with the higher value-added output was ranked above.
All knowledge proven is for personal, nonfarm industries in 2021. Worth-added output is outlined as gross output minus intermediate inputs (corresponding to power, materials, and providers). A whole set of definitions might be discovered on the BLS glossary page.
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