Japan’s labor productivity ranked 30th among 38 OECD members in 2022

Japan ranked 30th in labor productivity among the 38 Organization for Economic Cooperation Development members in 2022, down two spots from the previous year and to a new lowest-ever position, a Tokyo-based group has said.

Measured by the worth of goods or services a worker can produce per hour, labor productivity totaled $52.30 in Japan, the lowest calculated among the Group of Seven advanced economies since 1970 when comparable data became available, the Japan Productivity Center said.

The result marked the fourth straight year Japan has fallen down the rankings since placing in 21st in 2018, although its productivity calculation edged up 0.8% from the previous year, the report released in December showed.

Compared to 2019, before the coronavirus pandemic, Japan’s productivity expanded 2.0% in 2022 but was still behind others that saw larger advances.

In the 2022 rankings, Ireland placed first with $154.10 in value per person per hour, followed by Norway at $149.90, while the average among the OECD members was at $65.20. Among the G7, the United States ranked in ninth at $89.80 and Germany 11th at $87.20.

To enhance labor productivity, the center proposed Japan “proactively utilize digital technologies, including generative artificial intelligence, to create new additional value while making up for labor shortages.”

A separate report by the country’s labor ministry also showed that labor productivity per person remained nearly flat for 25 years through 2021 and has lagged other advanced economies.

Nominal labor productivity, calculated by dividing nominal gross domestic product by the number of workers, put Japan at 101.6 against the 1996 base of 100, while Britain and the U.S. were at 200.3 and 241.0, respectively, the white paper showed.

In terms of real labor productivity adjusted according to price fluctuations, Japan’s value improves to 113.2 but it was still behind other advanced economies, including the U.S., Britain and France, the paper showed.