The measure of productivity is extremely important in determining growth performance of a country. After two decades of high productivity growth in the 1950's and 1960's, we observed a significant slowdown of productivity growth following the oil crisis in 1973. The debate on the causes of the worldwide slowdown has turned into a vital concern for economists and policymakers. Several explanations of the slowdown have been suggested, such as the low investment and savings rate, the energy crisis in the 1970's, and the low rate of public investment in infrastructures. However, none of these explanations has been found to be fully satisfactory. Economists define productivity as "the difference between labour plus capital costs and economic outputs" (Salgado, p.9). It is generally acknowledged that over time, rising levels of productivity are necessary conditions to rising standards of living. Also, the slowdown of output growth is related to the slowdown of labor productivity growth. This is because output growth comprises the growth of the number of hours worked and the growth of output per hour worked (labor productivity). Productivity is determined by the efficiency with which resources are combined to produ
According to Industry Canada, Canada's productivity has been increasing in assembly labor productivity over the past decade. They say there has been a 40 percent improvement since 1983 and that Canadian assembly plant have increased labor productivity more rapidly than U.S. plants (see Figure 1 and Table 3).
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