Tuesday, September 27, 2022

15 States With the Greatest Labor Productivity


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Editor’s Note: This story originally appeared on Smartest Dollar.

With numerous economic experts predicting that the U.S. is headed toward recession, one of the many concerning signals is a sharp decline in labor productivity.

After more than a decade of below-average productivity growth, the COVID-19 pandemic raised the prospect of a productivity boom. Many low-productivity jobs were eliminated early in the pandemic, while major infrastructure investments and the accelerated adoption of automation and artificial intelligence created conditions for productivity to rise.

But more recent data has shown productivity declining. The Bureau of Labor Statistics reported a 7.5% decline in labor productivity during the first quarter of 2022, the steepest decline since 1947.

Productivity is a useful metric for assessing the economy because it reflects the economy’s ability to generate goods and services from the same amount of work. Productivity growth can simultaneously benefit businesses through increased profits, consumers through increased availability of goods and services, and workers through increased compensation.

In recent decades, however, the link between productivity growth and wage growth has weakened. Experts term this phenomenon the “productivity-pay gap.” Beginning in the late 1970s, the growth rate for compensation began to level out, even as labor productivity continued to increase.

To determine the states with the greatest labor productivity, researchers at Smartest Dollar divided each state’s total value-added output by its total annual hours worked. The data used in this analysis is from the U.S. Bureau of Labor Statistics Office of Productivity and Technology. Read more about our methodology at the end.

Here are the states with the greatest labor productivity.

15. Pennsylvania

Pittsburgh, Pennsylvania
Sean Pavone / Shutterstock.com
  • Labor productivity: $79.26
  • Total value-added output: $702,670,372,000
  • Total employment: 5,392,400
  • Average annual hours per worker: 1,644

14. Texas

Corpus Christi Texas
Sean Pavone / Shutterstock.com
  • Labor productivity: $80.54
  • Total value-added output: $1,640,004,984,000
  • Total employment: 11,749,000
  • Average annual hours per worker: 1,733

13. Wyoming

Jackson Hole, Wyoming
f11photo / Shutterstock.com
  • Labor productivity: $80.62
  • Total value-added output: $31,586,315,000
  • Total employment: 233,400
  • Average annual hours per worker: 1,679

12. North Dakota

Fargo, North Dakota
Jacob Boomsma / Shutterstock.com
  • Labor productivity: $82.06
  • Total value-added output: $48,299,490,000
  • Total employment: 353,500
  • Average annual hours per worker: 1,665

11. Colorado

Colorado Power Plant
Ann Cantelow / Shutterstock.com
  • Labor productivity: $82.26
  • Total value-added output: $334,379,906,000
  • Total employment: 2,540,100
  • Average annual hours per worker: 1,600

10. Maryland

Baltimore, Maryland
ESB Professional / Shutterstock.com
  • Labor productivity: $82.34
  • Total value-added output: $310,204,445,000
  • Total employment: 2,313,200
  • Average annual hours per worker: 1,629

9. Illinois

Joliet Illinois
Henryk Sadura / Shutterstock.com
  • Labor productivity: $88.42
  • Total value-added output: $778,025,075,000
  • Total employment: 5,326,200
  • Average annual hours per worker: 1,652

8. Alaska

Anchorage, Alaska
Rex Lisman / Shutterstock.com
  • Labor productivity: $90.44
  • Total value-added output: $39,763,770,000
  • Total employment: 262,600
  • Average annual hours per worker: 1,674

7. New Jersey

Trenton, New Jersey
FotosForTheFuture / Shutterstock.com
  • Labor productivity: $91.21
  • Total value-added output: $548,008,610,000
  • Total employment: 3,655,500
  • Average annual hours per worker: 1,644

6. Connecticut

house in Hartford Connecticut
Jon Bilous / Shutterstock.com
  • Labor productivity: $98.65
  • Total value-added output: $247,743,547,000
  • Total employment: 1,538,800
  • Average annual hours per worker: 1,632

5. Massachusetts

Worcester, Massachusetts
Sean Pavone / Shutterstock.com
  • Labor productivity: $100.72
  • Total value-added output: $533,657,907,000
  • Total employment: 3,288,900
  • Average annual hours per worker: 1,611

4. California

Modesto, California
Matt Gush / Shutterstock.com
  • Labor productivity: $103.30
  • Total value-added output: $2,729,409,518,000
  • Total employment: 15,875,600
  • Average annual hours per worker: 1,664

3. Delaware

Wilmington, Delaware
Paul Brady Photography / Shutterstock.com
  • Labor productivity: $104.53
  • Total value-added output: $66,888,567,000
  • Total employment: 404,900
  • Average annual hours per worker: 1,580

2. Washington

Bremerton, Washington
Ceri Breeze / Shutterstock.com
  • Labor productivity: $106.09
  • Total value-added output: $536,309,572,000
  • Total employment: 3,071,500
  • Average annual hours per worker: 1,646

1. New York

Buffalo New York
Sopotnicki / Shutterstock.com
  • Labor productivity: $117.86
  • Total value-added output: $1,530,281,417,000
  • Total employment: 8,106,800
  • Average annual hours per worker: 1,602

Methodology

Man analyzing data on a laptop
fizkes / Shutterstock.com

The data used in this analysis is from the U.S. Bureau of Labor Statistics Office of Productivity and Technology (OPT). To determine the states with the greatest labor productivity, researchers divided each state’s total value-added output by its total annual hours worked. In the event of a tie, the state with the greater value-added output was ranked above.

All data shown is for private, nonfarm industries in 2021. Value-added output is defined as gross output minus intermediate inputs (such as energy, material, and services). A complete set of definitions can be found at the BLS glossary page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.



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