Fact of the Week: Each Hour Worked Contributes Over $16 More to GDP in the United States Than It Does in Canada

Sources: Organization for Economic Cooperation and Development, Productivity – GDP per hour worked (US dollars; accessed June 27, 2022); Organization for Economic Cooperation and Development, Productivity – Unit labour costs (accessed June 27, 2022).

Commentary: GDP per hour worked in 2020 was $73.37 in the United States, compared to $56.86 in Canada. This gap is decreasing, however, with Canada’s GDP per hour worked increasing at twice the rate of that of the United States between 2010 and 2020 (1.6 percent and 0.8 percent per year, respectively). Moreover, during that period, unit labor cost (the ratio of hourly wage to output per hour worked, a widely used measure of labor’s price competitiveness) rose by 23.3 percent in the United States compared to 20.3 percent in Canada. Thus, while U.S. labor is currently more productive than Canadian labor, it is losing ground both in terms of pure productivity and price competitiveness. For now, however, Canada’s longstanding productivity gap with the United States remains.