Looking at the Growing Productivity of American Workers for Labor Day

Thursday, August 31, 2023

Labor Day celebrates the dedication, achievements, and hard work of the American workforce. Here at the Bureau of Labor Statistics, we have a lot to say about workers and how worker productivity contributes to the health of the U.S. economy. In fact, gains in worker productivity are a known ingredient in raising a nation’s standard of living.

Since 2000, labor productivity has increased 1.5 percent per year. This is because output—the amount of goods and services the economy produces—grew faster than total hours worked. With productivity glasses on, that is positive news! From 2000 to 2022, U.S. workers produced about 60 percent more “stuff” and only increased their hours worked by 10 percent. This efficiency in production means more time for fun activities like an afternoon baseball game with friends (reminiscing on what baseball and productivity statistics have in common).

Editor’s note: Data for this chart are available in the table below.

The increase in labor productivity is not just workers trying harder. Today’s workers use more advanced machines in production, and workers are more highly skilled than ever before. The increase in workers’ skills and their ability to adapt to new technology means they can produce the same amount of output in fewer hours. The BLS Total Factor Productivity statistics account for changes in capital and changing labor skills and worker experience, recognizing that all hours worked are not equally productive. The BLS labor composition index measures the changes in worker experience and skills. When the labor composition index increases, it means the skill level of the workforce is rising.

Editor’s note: Data for this chart are available in the table below.

Chart 2 shows that labor input (labor hours adjusted for labor composition) follows the same pattern as hours worked but grows at a faster rate because workers are becoming more skilled. The increase in the labor composition index—the red line—in 2020 was not due to upskilling of workers, but rather driven by the significant pandemic-related job losses experienced by workers in low-wage, low-skill industries. As these workers were rehired, the labor composition index returned to its more gradual upward trend.

Another piece of productivity involves the capital that workers use to make goods and services. Labor and capital go hand in hand. As improvements are made in the tools we use and new technologies are introduced, workers must continuously learn new skills. We can see that workers are, in fact, upskilling as evidenced in the labor composition measure. We can also look at a few types of capital to see how technology has grown since 2000.

Editor’s note: Data for this chart are available in the table below.

The amount of computers, software, communication equipment, and research and development used in the production process have increased at least twofold in just 2 decades. Using these improvements, workers have stepped up and helped the productivity of the economy improve.

At a more detailed level, we can see that industry productivity growth varies across the economy. Looking at the top 5 expanding industries with growth in both hours and output, annual growth in labor productivity over the 2000—22 period ranged from 9.6 percent in electronic shopping and mail-order houses to 3.5 percent in general merchandise stores. Curious about productivity growth in your industry or other industries? See our data tables on labor productivity and cost data for detailed industries.

Editor’s note: Data for this chart are available in the table below.

Throughout the decades, the U.S. workforce has propelled our economy forward. When workers and capital unite, innovation finds a way to make more with less. Productivity growth in the economy celebrates the American spirit, effort, and the hard work of our workers. And over time, productivity growth will increase time saved that can be directed toward new and innovative ideas of tomorrow.

To learn more about productivity and do your own investigation of the pieces of the productivity puzzle, visit our productivity page, check out our educational resources, glossary, and questions and answers, and explore our data.

 

Chart 1. Hours worked, output, and labor productivity for nonfarm business, 2000–22

Year	Labor productivity	Output	Hours worked
2000	100.000	100.000	100.000
2001	102.590	100.679	98.137
2002	106.973	102.368	95.696
2003	110.923	105.540	95.148
2004	114.231	110.110	96.393
2005	116.717	114.410	98.024
2006	117.875	118.218	100.292
2007	119.740	120.920	100.987
2008	121.622	119.852	98.545
2009	126.330	115.236	91.218
2010	130.622	119.035	91.130
2011	130.346	121.471	93.192
2012	131.290	125.510	95.598
2013	132.028	128.321	97.192
2014	132.750	132.137	99.538
2015	134.372	136.599	101.658
2016	135.212	139.108	102.882
2017	136.715	142.872	104.504
2018	138.694	147.898	106.637
2019	141.434	151.925	107.418
2020	147.815	146.665	99.222
2021	151.077	158.139	104.675
2022	148.588	161.743	108.854

 

Chart 2. Hours worked, labor composition, and labor input for private nonfarm business, 2000–22

Year	Hours worked	Labor composition	Labor input
2000	100.000	100.000	100.000
2001	98.031	100.340	98.364
2002	95.525	100.907	96.392
2003	94.980	101.402	96.312
2004	96.256	101.668	97.862
2005	97.926	101.827	99.715
2006	100.224	102.268	102.497
2007	100.937	103.014	103.980
2008	98.454	103.811	102.206
2009	91.072	104.838	95.478
2010	91.016	105.188	95.739
2011	93.147	105.763	98.516
2012	95.621	106.136	101.488
2013	97.261	106.587	103.668
2014	99.664	106.691	106.333
2015	101.816	107.229	109.177
2016	103.039	107.546	110.815
2017	104.682	107.896	112.948
2018	106.819	108.451	115.845
2019	107.654	108.799	117.127
2020	99.368	111.747	111.040
2021	104.928	110.795	116.255
2022	109.156	110.854	120.910

 

Chart 3. Trends in selected types of capital used by workers in production, private nonfarm business, 2000–21

Year	Research and development	Software	Computers	Communication information processing equipment
2000	100.000	100.000	100.000	100.000
2001	105.369	112.649	124.627	113.547
2002	110.304	122.414	142.457	124.096
2003	114.952	130.854	158.239	133.785
2004	119.013	140.465	175.461	145.154
2005	123.002	151.505	195.107	157.784
2006	127.486	162.227	222.039	172.671
2007	132.643	172.707	256.199	191.252
2008	138.211	183.352	290.207	211.859
2009	143.467	192.916	317.558	230.376
2010	147.591	201.248	345.966	251.007
2011	151.276	211.069	374.857	276.922
2012	154.991	225.673	400.048	304.702
2013	159.110	243.392	424.835	335.714
2014	164.270	262.037	443.253	371.480
2015	170.062	281.041	455.267	413.361
2016	177.179	303.089	463.912	462.165
2017	185.031	329.777	473.501	517.057
2018	192.833	361.787	493.659	575.063
2019	201.823	398.055	521.107	632.228
2020	211.734	436.597	553.898	684.893
2021	222.807	480.924	594.339	739.300

 

Chart 4. Annual percent change in labor productivity for selected industries, 2000–22

Industry	Labor productivity
Electronic shopping and mail-order houses	9.6
Used merchandise stores	4.3
Software publishers	3.8
Oil and gas extraction	3.5
General merchandise stores	3.5