Statistics Canada recently released a report on hours worked and labour productivity in the provinces and territories in 2019. The report compares last year’s numbers to those of 2018 and 2017.
Labor productivity is basically how much real gross domestic product (GDP) is produced during an hour of labour, how much our economy produces in an hour.
In Alberta, annual labour productivity barely increased, with a 0.1% rise, to $78.50 per hour. This was the smallest increase of all 10 provinces (although both Ontario and Saskatchewan saw decreases in labour productivity).
Even so, Alberta’s labour productivity is the second highest of all the provinces, coming second only to Saskatchewan, which is at $82.70 an hour.
Here’s what Alberta’s labour productivity looks like since 1997.
Even though Statistics Canada reported Alberta’s labour productivity as $78.50 an hour, that represents only the business sector. The non-business sector’s labour productivity, for example, was $82.20 an hour. If you factor in all sectors, labour productivity in Alberta is actually $79.40 an hour.
Here are the 20 sectors with the highest labour productivity rates:
|Other non-profit institutions serving households||$1582.80|
|Non-conventional oil extraction||$1019.00|
|Basic chemical manufacturing||$931.90|
|Oil and gas extraction||$556.80|
|Petroleum and coal product manufacturing||$511.30|
|Crude oil and other pipeline transportation||$346.20|
|Lessors of real estate||$338.40|
|Mining and oil and gas extraction||$323.50|
|Motor vehicle brake system manufacturing||$312.10|
|Resin, synthetic rubber, and artificial and synthetic fibres and filaments manufacturing||$298.10|
|Conventional oil and gas extraction||$289.70|
|Natural gas distribution||$274.20|
|Pipeline transportation of natural gas||$272.20|
|Pesticide, fertilizer and other agricultural chemical manufacturing||$265.10|
|Grain and oilseed milling||$264.50|
Remember, these are dollars per hour.
Here are the 20 industries in Alberta with the lowest labour productivity rates:
|Motor vehicle seating and interior trim manufacturing||$2.20|
|Forging and stamping||$2.30|
|Ship and boat building||$2.30|
|Household appliance manufacturing||$2.50|
|Motor vehicle gasoline engine and engine parts manufacturing||$4.20|
|Metal ore mining||$5.60|
|Gold and silver ore mining||$5.60|
|Heavy-duty truck manufacturing||$7.30|
|Motor vehicle manufacturing||$8.50|
|Animal production (except aquaculture)||$8.60|
|Taxi and limousine service||$15.00|
|Fishing, hunting and trapping||$15.20|
|Electric lighting equipment manufacturing||$16.20|
|Motor vehicle transmission and power train parts manufacturing||$16.20|
|Sound recording industries||$17.50|
|Metalworking machinery manufacturing||$18.70|
In the same dataset, hours worked for all jobs was 4.2 million for all sectors and 3.4 million for business sector industries.
Here’s what the total hours worked looks like charted since 1997:
As you can see, the total hours worked has steadily increasing, with slight drops during the recessions in 2007–2008 and 2015–2016.
And that makes sense. After all, labour productivity increased during the same period, and if labour productivity is GDP divided by total hours worked, then it makes sense that the total hours worked would have gone up.
Keep in mind, however, that population has also increased, which means that the number of people working would also increase.
And if more people are working, then the total number of hours worked would also increase. But does that explain the increase in labour productivity, too? Well, there’s one way to find out. The Statistics Canada dataset I referenced earlier happens to include average number of hours worked for all jobs in a given year.
Well, that’s interesting. The average number of hours worked in a year has been actually declining during the same period that labour productivity has been increasing.
A 40-hour workweek comes works out to 2,000 hours worked in a year, assuming two weeks of vacation. The average number of hours worked fell from 1,864 in 1997 to 1,743 in 2019, both of which are below 2,000 hours. That means that the average worker is not only working fewer hours, but for the last 23 years, they haven’t even been working 40-hour work weeks.
In 1997, the average worker worked 37.28 hours per week, while their 2019 counterpart worked 34.86 hours. Again, this assumes 2 weeks vacation. Otherwise, it’d be 35.8 and 33.5, respectively.
Our economy is producing more even though workers are working fewer hours.
How is that possible? Well, it can be any number of things.
For example, automation could increase how much companies produce without having to increase the number of hours worked. Education could also improve productivity, by teaching workers how to be more efficient.
Just keep in mind that just because labour productivity rises—even it’s only 10¢ an hour—it doesn’t necessarily mean it’s a good thing.