What is the best way to define productivity in a business or enterprise setting? How many cars does a plant put out in an hour? How many dollars worth of food get sold at a restaurant? Or even, what percent of students who graduate from high school go to college? The federal government has its own definition, and it recently assigned its yardstick to states.
The Bureau of Labor Statistics of the U.S. Department of Labor, the same agency that reports national unemployment numbers every month, recently released its PRODUCTIVITY BY STATE – 2020. Clearly, the number of hours worked by Americans dropped on average in 2020 because of the pandemic. Output decreased in all 50 states and the District in 2020 and hours worked decreased in all but one state which was Idaho, the BLS reported.
However, productivity is not defined based on that. The BLS defines it this way:
Labor productivity describes the relationship between real output and the labor hours involved in its production. These measures show the changes from period to period in the amount of goods and services produced per hour worked.
Based on this measure, Hawaii had the largest change in productivity between 2019 and 2020, up 8.5%. The productivity figure for non-farm payroll workers rose in 45 states and the District of Columbia. This was the best annual performance in productivity since 2010.
Labor productivity rose by more than 5% in 10 states, including Hawaii. These were Nevada, up 8%, Alaska, up 6.3%, California, up 6.1%, District of Columbia, up 5.9%, Oregon, up 5.8%, Massachusetts, up 5.7%, Delaware, up 5.7%, New Jersey, up 5.4%, and New York, up 5.2%.
Productivity declined in five states. There were Idaho, down 2.7%, South Dakota, down 1.9%, Montana, down .7%, Tennessee, down 1.4%, and Oklahoma, down 1.4%.
Why the difference between state to state. The PRODUCTIVITY BY STATE – 2020 does not give any analysis or offer any explanation.