Productivity

The idea is simple: A nation’s productivity is calculated by dividing what it produces by the labor it took to provide those goods and services. What’s confounding economists is why productivity growth has slowed in many countries during the last decade, even as other economic gauges have improved. There’s a lot of disagreement on why — a mismatch between jobs and skills? Fewer innovations? Aging populations? Measurement problems? While the arguments can be arcane, a country’s economic well-being depends as much on productivity as it does on hotly debated topics like free trade or national debt. As Nobel Prize-winning economist Paul Krugman has said, productivity isn’t everything, but in the long run it’s almost everything.

U.S. productivity gains were almost halved in the past decade compared with their average from 1948 to 2006. In the U.K., it took eight years for productivity to finally return to the level it was at before the 2008 financial crisis. China’s productivity growth in 2016 slumped to a 16-year low. These anemic numbers worry economists and government officials, since sustained productivity growth is what ultimately raises living standards. (If workers are producing more per hour, there’s more output and income to share.) That’s why it’s critical to gauge its progress accurately. While it’s relatively easy to assess the efforts and output of factory employees, it’s harder with service workers. So the Organization for Economic Cooperation and Development is grappling with how best to construct data and compare progress across nations. Meanwhile, some measures by government agencies are lagging behind real-world changes. By late 2017, the U.S. Bureau of Labor Statistics plans to release results of its first survey of temporary workers since 2005. Yet the gig economy has been roaring for years — Uber drivers started ferrying passengers in 2010.