Productivity by State News Release

For release 10:00 a.m. (ET) Thursday, May 27, 2021                                               USDL-21-0936

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


                                    PRODUCTIVITY BY STATE – 2020
 

Labor productivity in the private nonfarm sector rose in 45 states and the District of Columbia in 2020, 
the U.S. Bureau of Labor Statistics reported today. This is the highest number of states with positive 
productivity growth since 2010. Output decreased in all 50 states and the District in 2020 and hours 
worked decreased in all but 1 state – Idaho. Hawaii and Nevada experienced the highest growth in labor 
productivity of 8.5 percent and 8.0 percent, respectively.

Labor productivity by state, percent change, 2020

    • The ten states with the fastest growth in productivity all saw gains of more than 5.0 percent:
        • Hawaii, 8.5 percent
        • Nevada, 8.0 percent
        • Alaska, 6.3 percent
        • California, 6.1 percent
        • District of Columbia, 5.9 percent
        • Oregon, 5.8 percent
        • Massachusetts, 5.7 percent
        • Delaware, 5.7 percent
        • New Jersey, 5.4 percent
        • New York, 5.2 percent
    • Labor productivity declined in five states (Idaho, South Dakota, Oklahoma, Tennessee, and 
      Montana) due to a more rapid decline in output than in hours worked. Idaho is the only state with 
      an increase in hours (1.1 percent) and lower labor productivity.
    • All other states saw increases in labor productivity due to declines in hours that outpaced declines 
      in output. 

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 2020, California had the 
largest contribution to national growth. The state’s 6.1-percent growth in labor productivity in 2020 
contributed nearly one quarter of the 3.6-percent growth of the nation.

 
Long term trends
 
    • From 2007 to 2020, labor productivity rose in 48 states and the District of Columbia. 
    • Output increased in 44 states and the District of Columbia during this period, while hours worked 
      increased in only 15 states. 
    • North Dakota experienced the highest rate of growth of 3.1 percent. Wyoming posted a slight 
      decline in labor productivity over the long term, and Louisiana saw no change.
    • The first and last years of this series coincide with severe recessions. During the recession of 2007 
      to 2009, 47 states experienced increases in labor productivity, though only 10 saw growth in 
      output. No state saw an increase in hours worked during that period. These trends closely mirror 
      the most recent year’s labor productivity and hours trends. 

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

Additional Information

Output and compensation measures for 2019 and earlier years reflect revisions to GDP by state and 
industry data published by the Bureau of Economic Analysis. Hours and employment data through 2019 
have been revised to incorporate the BLS 2020 Current Employment Statistics benchmark. 

The COVID-19 pandemic did not impact the availability of source data used to construct productivity 
measures in this release. Data source providers continued to collect and publish high quality industry data 
for 2020. Additional information can be found on the BLS website at www.bls.gov/covid19/effects-of-
covid-19-pandemic-on-productivity-and-costs-statistics.htm#Industry-Productivity.

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

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Information in this release will be made available to individuals with a sensory impairment upon request. 
Voice phone: (202) 691-5200; Federal Relay Service: (800) 877-8339. 

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 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.