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Productivity

In economics, productivity is the amount of output created (in terms of goods produced or services rendered) per unit input used. For instance, labour productivity is typically measured as output per worker or output per labour-hour. With respect to land, the "yield" is equivalent to "land productivity". Within Capitalism, productivity increases lead to higher standards of living for the general popualtion. As Henry Hazlitt explains in Economics in One Lesson, increasing production reduces prices, and therefore goods become more widely available. Automobiles for example, where hand made initially, and only available to the wealthy. As productivity increased, and the price of automobiles fell, they became widely available to the general population.

Contents

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• 1 Measures of factor productivity
• 2 Productivity studies
• 3 Increases in productivity
• 4 Labour productivity
• 5 Marx on productivity
• 6 See also
• 7 External links

Measures of factor productivity

Some economists write of "capital productivity" (output per unit of capital goods employed), the inverse of the capital/output ratio. "Total factor productivity," sometimes called multifactor productivity, also includes both labor and capital goods in the denominator (weighted by their incomes).

Unlike labor productivity, the calculation of both capital productivity and total factor productivity is dependent on a number of doubtful assumptions and is subject to the Cambridge critique. Even measures of land and labor productivity should be used only when conscious of the role of the heterogeneity of these inputs to the production process.

Productivity studies

Productivity studies analyze technical processes and engineering relationships such as how much of an output can be produced in a specified period of time (see also Taylorism).It is related to the concept of efficiency, which is the amount of output produced relative to the amount of resources (time and money) that go into the production.All else constant, it benefits a business to improve productivity, which over time lowers cost and (hopefully) improves ability to compete and make profit. Increases in productivity also influence society more broadly, by improving living standards, creating income, and generating economic growth.

Increases in productivity Companies can increase productivity in a variety of ways. The most obvious methods involve automation and computerization which minimize the tasks that must be performed by employees. Recently, less obvious techniques are being employed that involve ergonomic design and worker comfort. A