Joe Biden’s productivity piffle
Vice President Joe Biden falsely claimed that U.S. workers “are three times as productive as any worker in the world.” He’s not even close. By the standard measure for productivity, American workers ranked third in the world behind Norway and Ireland in 2011.
Biden also stated that the U.S. economy is “two and a half times bigger than any other in the world.” That’s close, but still wrong. Last year the U.S. economy was not quite double the size of China’s economy, which is the second largest in the world.
The vice president made both statements in a May 13 commencement address at the University of Pennsylvania — home of FactCheck.org. He spoke about the prowess of the U.S. economy and worker and how the graduates were taught to challenge orthodoxy.
There are different ways of measuring labor productivity. By all measures, U.S. workers are among the most productive. By some measures, they are the most productive. But by no measure we could find are U.S. workers “three times as productive as any worker in the world.”
The Bureau of Labor Statistics says “a general standard of labor productivity for the entire economy” is gross domestic product per hour worked. By that measure, the U.S. ranked third in 2011 at $60.59 per hour worked behind Norway ($81.47) and Ireland ($66.74), according to a Nov. 7, 2012, BLS report called “International Comparisons of GDP per Capita and per Hour, 1960-2011.” The figures are in 2011 U.S. dollars.
That same BLS report shows that by another measure — GDP per employed person — the U.S. ranked second at $106,541 behind Norway ($116,251) in 2011. This time, Ireland was third at $102,983 per employed person. Again, the figures are in 2011 U.S. dollars.
The World Bank calculates a slightly different ranking for GDP per employed person. For 2011, the World Bank ranked the U.S. No. 1. But it is close between the U.S. (68,156) and Hong Kong (65,798), as measured in 1990 constant international dollars, not U.S. dollars.
So, by any measure, U.S. employees are very productive and work long hours. But three times as productive?
We asked the vice president’s office for an explanation, but have yet to receive a response. If we do, we’ll include it in an update.
It is possible that Biden was referring to a 2011 analysis by the Boston Consulting Group comparing U.S. and Chinese manufacturing costs. In his speech, Biden says the U.S. compares favorably to China because of its superior legal system, advanced technology and robust venture capital — which are due to Americans being encouraged to “think different” and challenge orthodoxy. We found that ABC News last year said “the American worker combined with technology in the U.S. makes the American worker more than three times as productive as the Chinese worker,” citing the consulting firm as its source.
ABC News, Feb. 22, 2012: A decade ago, a factory worker in China made 58 cents an hour. Today, wages are more than $3.00 and there are predictions of $6.00 an hour by the year 2015. It may sound cheap, but some economists argue when you factor in productivity those wages add up. The Boston Consulting Group argues the American worker combined with technology in the U.S. makes the American worker more than three times as productive as the Chinese worker.
“When you factor in that the American worker is nearly four times as productive, that math quickly adds ups,” said Hal Sirkin, senior partner at the Boston Consulting Group.
But that analysis covered manufacturing jobs, not all jobs, and it compared U.S. manufacturing workers to Chinese manufacturing workers not “any worker in the world,” as Biden put it. Also, the firm’s analysis factors in technology — not just worker productivity.
As for the claim that the U.S. economy is “two and a half times bigger than any other in the world,” we looked at the GDP for the two largest economies: the U.S. and China. The size of the U.S. economy in 2012 was $15.7 trillion, according to the Congressional Budget Office. That’s not quite double the size of China’s economy, which was $8.28 trillion last year, according to China’s National Bureau of Statistics. Both figures are in U.S. dollars.