Productivity by State News Release

For release 10:00 a.m. (ET) Thursday, May 26, 2022                                   USDL-22-0993

Technical information: 	(202) 691-5606  •  productivity@bls.gov  •  www.bls.gov/productivity 
Media contact:          (202) 691-5902  •  PressOffice@bls.gov


				PRODUCTIVITY BY STATE - 2021
 
Labor productivity in the private nonfarm sector rose in 39 states and the District of Columbia in 2021, 
the U.S. Bureau of Labor Statistics reported today. Output increased in all 50 states and the District of 
Columbia in 2021, following a year of decline for all areas. Hours worked increased in all 50 states but 
declined in the District of Columbia. Washington and New Hampshire experienced the highest growth in 
labor productivity of 6.4 percent and 5.2 percent, respectively.

Labor productivity, output, and hours worked for select states, percent change, 2021 
	* Two states saw productivity growth over 5.0 percent: Washington (6.4 percent) and New 
	Hampshire (5.2 percent). 
	* Output growth exceeded 9.0 percent in three states: California (9.8 percent), Tennessee (9.8 
	percent), and New Hampshire (9.3 percent).
	* Nevada and Florida saw the highest growth in hours worked (9.8 percent and 9.1 percent, 
	respectively).
	* Two states, Arkansas and Oklahoma, saw no change to labor productivity due to gains in output 
	that matched gains in hours worked. 
	* Labor productivity declined in nine states (Alaska, Wyoming, Nevada, Hawaii, Rhode Island, 
	Delaware, Florida, Georgia, and New Jersey) due to a more rapid increase in hours worked than in 
	output. 

Contributions to national labor productivity, 2021 

Each state’s annual contribution to national productivity growth is calculated by multiplying the state’s 
productivity growth rate by its average share of total current dollar national output. The economic size of 
each state influences its contribution to national and regional estimates. For 2021, California had the 
largest contribution to national growth. The state’s 4.2-percent growth in labor productivity in 2021 
contributed nearly one third of the 2.1-percent growth of the nation.


2019-21 trends
While increases in output and hours worked were widespread in 2021, not all areas have fully recovered 
to levels seen before the COVID-19 pandemic. 
	* Output surpassed 2019 levels in 37 states in 2021. 
	* Idaho and Utah share the highest average annual output growth rate (3.7 percent). 
	* Hours worked were still below 2019 levels in 40 states and the District of Columbia. 
	* Hawaii saw the largest decrease in hours worked (-5.8 percent); Idaho experienced the largest 
	increase (3.7 percent).
	* Labor productivity increased in all but two states--Oklahoma and Wyoming.

Seventeen states and the District of Columbia experienced average annual labor productivity growth 
faster than the national rate of 2.5 percent. 
	* Of these 17 states, Utah was the only state that also experienced an increase in hours worked. 
	* The remaining 16 areas had declines in hours worked that outpaced that of the nation (-1.3 
	percent). 
	* Three areas--California, Washington, and the District of Columbia--saw productivity growth of 
	more than 5.0 percent.
	* North Dakota, Vermont, and the District of Columbia had declines in both output and hours 
	worked. 

Long term trends
	* From 2007 to 2021, labor productivity rose in 47 states and the District of Columbia. 
	* Output grew in 46 states and the District of Columbia while hours worked grew in 25 states and 
	the District of Columbia. 
	* North Dakota experienced the highest rate of labor productivity growth of 3.4 percent. Louisiana 
	and Wyoming posted slight declines over the long term and Alaska saw no growth. 
	* In 2020, every state saw declines in output and all but one state saw declines in hours worked, 
	closely mirroring the recession years of 2007-09. 2021 was a year of recovery 
	with all areas experiencing growth in output and hours worked increased in all states.

Contributions to national labor productivity, average annual percent change, 2007-21 

California, New York, and Texas, which have the largest economies, contributed the most to national productivity growth, over 40 percent of the 1.4-percent increase.

Additional Information

Output and compensation measures for 2020 and earlier years reflect revisions to GDP by state and 
industry data published by the Bureau of Economic Analysis. Hours and employment data through 2020 
have been revised to incorporate the BLS 2021 Current Employment Statistics benchmark. 

Access the following productivity data at www.bls.gov/productivity/tables/labor-productivity-by-state-
and-region.xlsx:
	* Detailed data series: indexes of productivity and related measures; rates of change; and levels of state 
	employment, hours worked, value-added output, and labor compensation 
	* Additional years and long-term data

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Technical Note

Labor Productivity: Labor productivity describes the relationship between real output and the labor 
hours involved in its production. These measures show the changes from period to period in the amount 
of goods and services produced per hour worked. Although the labor productivity measures relate output 
in a state to hours worked of all persons in that state, they do not measure the specific contribution of labor 
to growth in output. Rather, they reflect the joint effects of many influences, including: changes in 
technology; capital investment; utilization of capacity, energy, and materials; the use of purchased services 
inputs, including contract employment services; the organization of production; the characteristics and 
effort of the workforce; and managerial skill. 

Output: Measures of real value-added output for the private nonfarm sector are created using GDP by 
state and industry data published by the Bureau of Economic Analysis (BEA). BEA does not produce a 
private nonfarm sector measure of real output by state. To create the necessary output series, several 
industry components are subtracted -- the farm sector, private households, and owner-occupied housing 
-- from GDP by state using a Fisher ideal index formula. 

Labor Hours: Hours are the number of hours worked by all employed persons, including wage and salary 
workers, self-employed persons, and unpaid family workers. Hours for wage and salary workers are 
primarily from BLS Current Employment Statistics (CES) and hours for self-employed and unpaid family 
workers are from the BLS Current Population Survey (CPS). The hours are adjusted from an hours paid 
basis to an hours worked basis using data from the BLS National Compensation Survey (NCS).

Unit Labor Costs: Unit labor costs represent the cost of labor required to produce one unit of output. The 
unit labor cost indexes are computed by dividing an index of nominal industry labor compensation by an 
index of real industry output. Unit labor costs also describe the relationship between compensation per 
hour worked (hourly compensation) and real output per hour worked (labor productivity). When hourly 
compensation growth outpaces productivity, unit labor costs increase. Alternatively, when productivity 
growth exceeds hourly compensation, unit labor costs decrease.

Labor Compensation: Labor compensation, defined as payroll plus supplemental payments, is a 
measure of the cost to the employer of securing the services of labor. Labor compensation measures are 
constructed using BEA nonfarm compensation less private household compensation. Compensation for 
self-employed and unpaid family workers are imputed by assuming that hourly compensation for these 
workers is the same as the average wage and salary worker in each state. 

Contributions to Labor Productivity: Each state’s contribution to national productivity growth is 
calculated by multiplying the state's productivity growth rate by its average share of total current dollar 
national output. Adding up these contributions will approximate, but may not exactly equal, growth rates 
of national productivity. Contributions measures used in this release capture the effects of within-state 
productivity changes but do not include the effects of shifting shares of output and labor among states.