Monday, March 07, 2005

American productivity?

Well, I tried to look for a news link on this, but last week sometime it was widely reported on several source (NBC, ABC, NPR, etc.) that the French were facing an extension to their 35 hour week. They're facing a 10% unemployment and a considerably slower economy growth than the U.S (6%) and the U.K. Folks who are resisting the work week increase point out that the French are considerably more productive per capita per hour. The study implied that the French worked smarter and were more effective so could get the work done quicker.

Well...this just didn't make sense to me. In a diverse workforce like America's, it makes no sense that one country's peoples were as a whole more effective than another's. Do the French who come to America just get lazier? How about compared to these other high growth countries like China and India where the workers there are clearly highly productive in near sweatshop like environments?

Instead, I offer you another simple explanation that we all learn in microeconomics. The law of diminishing returns. At work, I tend to be the most productive during the first hour, probably equally so on the 2nd etc. But when it's Friday afternoon at 3 pm, I'm sure to be winding down on things and not as productive as when I've had a good night's rest and the stresses of the day have not worn me down. Equally, when I'm working an 80 hr week, I'm sure I'm not twice as productive as a 40 hr week. Does that mean I'm inefficient? No, but I need to get 1.5 times amount of work done in a week, so I work twice as long. So there it is folks, my theory as to why Americans have much higher growth and productivity overall than the French yet have a lower productivity rate per hour. Thanks law of diminishing returns.

1 comment:

pachoo said...

My explanation is that labor unions are very strong in Europe, much more so than in the US. Unions tend to be resistant to productivity enhancements like better machinery, automation, etc since they would prefer to keep manufacturing dependant on human power as much as possible.