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Tuesday, September 04, 2007

We're Number One?

A report (#1) issued by the International Labor Organization September 4, 2007 found that America had the highest productivity on a per worker basis of any country in the world. As enjoyable as it would be to be able to say "We're #1", does anyone really buy this?

Before analyzing this in detail, a few obvious caveats require explanation. First, the figure cited is measured on a PER WORKER basis so dividing GDP by the number of people in the work force produces a larger number when the denominator doesn't increase to reflect longer work hours. Per the story, Americans average 1804 hours per year (about 45.1 forty-hour weeks) while some European countries clock in around 1400 to 1550 hours. If the figures are calculated on a per hour of work basis, Norway comes out on top in the productivity race.

The other problem with the figures as reported lies in the count of employees. As you might have heard from recent political debates within the country, America has nearly 12 million undocumented immigrants. Those of working age are not people who tend toward the leisured life sipping margaritas by the pool as they check their portfolio. They are roofing homes, cleaning hotel rooms, mowing lawns, etc. In other words, doing REAL WORK that should be counted in GDP. So are they counted in these numbers as part of the workforce? It's hard to tell. The government doesn't know either and makes no real attempt to include or exclude them per the FAQ page issued with their summary statistics. Whether they are or are not, the numbers still don't add up.

For "per worker productivity" to come out at $63,885 per worker in a $11.6 trillion dollar economy for calendar year 2006, the analysis assumed 181.6 million workers.

Hmmmmm. SOMETHING is out of wack. Recent 2007 data from the Bureau of Labor Statistics puts total employment at 146 million (138 million non-farm). (#2 and #3) Even if you add the entire undocumented alien population into the calculation, you still only have 158 million. So is someone "imputing" another 23.6 million workers? Maybe THAT'S why my project is behind -- I forgot to "impute" another 15 members on the team and leave the windows open at night for the "labor fairies" to materialize in the conference room and do the extra work.

Even after ignoring the "hours worked" versus "people worked" question about the denominator, the fact that American workers come out on top in any figuring of productivity seems highly suspect, especially if you've spent time in Corporate America. I posted a rant (#4) a few weeks back entitled "Earn Your BS In Corporate Communications" about the mindless drivel us wage slaves have to listen to all day as we try to "take things to the next level", get "air cover from senior management" and "work the issues" involved with deploying "business critical functions" across the "enterprise." The rant was pure sarcasm (but possibly quite entertaining after a few beers) but the problem of flawed management and poor / dysfunctional communication in business is very real -- and a major productivity killer.

That's probably the biggest flaw in looking at macro numbers like GDP and productivity. Once spending on contractors, consultants and work that was never required in the first place gets counted as someone else's income, it doesn't suddenly become "productive", especially if you own shares in the business that spent the money on the never-ending project. Furthermore, even a cursory analysis of the numbers coming out of government or think tanks about the economy turns up more questions than it answers. With so many people with vested interests to rig the numbers, it seems a strategy based upon macroeconomic factors as reported / massaged by government and corporate entities is bound to be flawed if your horizon is any shorter than five years.

Now excuse me, I have to log in and check my email at work to find out how many more days my project lost today. I was too tied up in meetings all day to keep up with my project slips.


#1) http://www.rttnews.com/sp/todaystop.asp?item=14

#2) http://www.bls.gov/web/ceshighlights.pdf

#3) http://www.bls.gov/news.release/empsit.nr0.htm

#4) http://watchingtheherd.blogspot.com/2007/02/earn-your-bs-in-corporate-communication.html