Average Labor Productivity
why is average labor productivity a particularly important economics variable?
Average Labor Productivity
Average labor productivity is a tool used in economics to determine the productivity of a
country. It is usually a function of output and time amount input in production. It reflects how
much a country produces and also predicts on the economic progress of a nation. The concept
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AVERAGE LABOR PRODUCTIVITY
achieves this by evaluating the total amount of work done and comparing it to the total amount
of time resource used (BUREAU OF LABOR, 2015, Pg. 47). In the calculation, gross domestic
production enables determination of the total amount of work done. When labor output is divided
with amount of time, then average productivity is obtained.
Average labor productivity is an important tool in assessment of the economic progress of a
country.It also allows countries to compare their productivity among themselves. Countries with
high values of average labor are more productive than those with low values. Through the
determination of average labor productivity, economic predictions give a country a better
understanding regarding the use of resources. An alarming low value of average labor
productivity in a country would for instance necessitate economic measures that would help raise
it. Such measures are more likely to be oriented toward increasing the GDPas time would remain
an independent variable.
The concept allows economists to assess the progress of a country in terms of productivity. This
is done by calculating the value of productivity within certain time limits. Comparison of
production between years for example, would produce a picture of a country’s general progress.
It is most encouraging if average production is maintained at a high value. In addition, average
labor production allows economist to evaluate the impact of different social and environmental
variables in a given population. Losses incurred by a country as a result of such factors as
political uprising among other likely situations can be assessed through determination of average
labor production. Likewise, economic gains for a country as a result of favorable conditions can
be determined from average labor productivity. In whichever case, the variable helps in
monitoring production in countries.
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Reference
BUREAU OF LABOR. (2015). Labor Productivity and Cost: FAQs.
