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An Open Letter to the Associated Press

By: Patricia L Johnson and Richard E Walrath

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The Associated Press article U.N.: U.S. workers are world's most productive was recently published by MSNBC and contains the following comments:

"The average U.S. worker produces $63,885 of wealth per year, more than their counterparts in all other countries,"

"The productivity figure is found by dividing the country's gross domestic product by the number of people employed. The U.N. report is based on 2006 figures..."

AP is stating the productivity figure is found by dividing the country's gross domestic product [GDP] by the number of people employed. If you calculate the average U.S. worker productivity rate based on the explanation provided by the Associated Press the numbers don't jibe. They don't even come close.

Using GDP for 2006 in billions of dollars $13,194.7 [13 trillion] and dividing it by the number of people employed in 2006 - 151,428,000 (81,255,000 men and 70,173,000 women) will not provide anyone with $63,885 in productivity.

$13,194,700,000,000.00 / 151,428,000 = $87,135.14

If you work backwards and take the 2006 GDP figure [13 trillion] and divide by the $63,885 in productivity, it should provide you with the number of people employed - it doesn't.

$13,194,700,000,000.00 / $63,885.00 = 206,538,311

206.5 million "employed" in the U.S. is no more than wishful thinking. There are two major problems with the Associated Press productivity article as far as we're concerned. One is the $64,000 (rounded) figure for worker productivity. The other is the number of workers--200 million (rounded)--implied to produce the stated GDP of $13.1 trillion.

All the endless formulas and equations presumably showing how productivity is computed are questionable, to say the least, when they end up showing $64,000 per worker.

The ILO report is an extremely complex document and when the AP writes an article with a statement indicating a formula for determining a specific number, readers should be provided with more than a one sentence definition. We're not familiar with the ILO report so we don't know if the problem is we're using the wrong figure for GDP, the wrong year for GDP, or the wrong number of employed workers - obviously AP knows what to use otherwise they wouldn't be writing an article providing a definition.

So how about it, AP - what is the full story on the ILO productivity calculation?

The United Nations, International Labour Organization (ILO) released their report entitled "Key Indicators in the Labour Market - Fifth Edition" on September 3, 2007. KILM is a major undertaking by the ILO that is published every other year. The KILM contains a core set of 20 market indicators with KILM 18 focusing on productivity.

The AP article headlines the fact this report indicates U.S. workers are the most productive in the world. Based on the explanation of rankings indicated in KILM 18, U.S. workers might be better off being last.

"The difference in rankings can be explained by the fact that annual working hours per person employed are considerably higher in the United States than in the majority of European economies; therefore, each US worker is able to produce more, leading to higher labour productivity when measured based on per person employed."

Article Source: http://depositarticles.com/

Patricia L Johnson and Richard E Walrath are co-owners of Articles and Answers and often join forces to write articles on subjects of interest to both. For further reading please visit the following site: articles2007.spaces.live

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