A new study found that New York ranks first among all U.S. states in labor productivity.
A study done by the Smartest Dollar revealed the productivity of each state through a series of statistics. They looked into the economy’s ability to generate goods and services all from the same amount of work. The more productivity a state can produce, the more profit businesses are able to bring in, the more consumers are able to get desired goods and increased worker compensation.
The data found that labor productivity in New York State totals to $117.86 per hour worked, compared to the nation’s $82.89per hour worked. NYS works 1,602 hours annually, while the entire country works 1,657 hours annually. New York State alone nearly reaches the nationwide total of working hours, with only 55 hours making the difference between the 2.
The U.S. has been going through a decade long decline of below-average productivity growth. Since the start of the COVID-19 pandemic, many low-productivity jobs have been terminated. This has brought productivity levels across the country rapidly.
Major infrastructure investments as well as the common use of automation and artificial intelligence has made conditions easier on workers, allowing them to do more valuable work even faster.
Despite this, the Bureau of Labor Statistics reported a 7.3% decline in labor productivity during Q1 2022, the steepest decline since 1947. Data is showing that productivity is declining.
It appears that the connecting factor between productivity growth and wage growth has weakened. This is called the “productivity-pay gap” — as productivity rises the compensation for nonsupervisory employees is not properly met.
Since the late 1940s productivity has risen a total of 253%, while compensation wages have only grown 144% over the same time span.
An important factor that plays a key role between compensation, business and productivity is industry. The Bureau of Labor Statistics found that within recent years the industries with productivity-pay gaps are also the industries with the largest gains in productivity. Some industries like technology improved their productivity through innovation, while others like manufacturing gained their growth through automation and by offshoring jobs to less expensive labor markets.
Read more at smartestdollar.com.