The subject of statistics involves the study of how to collect, summarize, and interpret data (Bowerman, 2010). Descriptive statistics summarize the population data by describing what was observed in the sample numerically or graphically. Numerical descriptors include mean and standard deviation for continuous data types, while frequency and percentage are more useful in terms of describing categorical data. Inferential statistics uses patterns in the sample data to draw inferences about the population represented, accounting for randomness. These inferences may take the form of answering yes/no questions about the data, estimation, correlation, regression, extrapolation, or ...view middle of the document...
1 More recently, productivity growth slowed, which has raised concerns that the trend rate of growth has shifted again. Since 2003, labor productivity growth has averaged 1.8 percent annually, and in the final two quarters of 2006 it averaged 0.5 percent at an annual rate. This recent slowdown underscores the variability in productivity growth and highlights the need for a long-term perspective when estimating trends in productivity. It also highlights the need to identify the sources of changes in productivity growth to determine whether they are likely to persist. (Labor Productivity, 2007)
WHY IT IS IMPORTANT
Advances in productivity are a significant source of increased potential national income. The U.S. economy has been able to produce more goods and services over time, but without an increase in labor, by making production more efficient. The production function is a simple description of the mechanism of economic growth. Economic growth is defined as any production increase of a business or nation.
Since firms face a great deal of competition (regional, national, and international), which limits their ability to raise prices, how can they raise profits? The answer is to lower costs, generally by finding ways to raise labor productivity. This has taken two forms: use of more modern equipment and machinery (labor-saving technology), and better management methods (horizontal management). So, in times of rising labor productivity, as now, firms are able to produce more output with fewer hours worked (either fewer workers or shorter work weeks). And, strange as it might seem, we shouldn’t attempt to track output by focusing on employment trends in periods when productivity is rising. (Taking the Mystery, 2001)
Labor productivity relates output to the labor hours used in the production of that output. Two BLS programs produce labor productivity and costs (LPC) measures for sectors of the U.S. economy. The Major Sector Productivity program publishes quarterly and annual measures of output per hour and unit labor costs for the U.S. business, nonfarm business, and manufacturing sectors. These are the productivity statistics most often cited by the national media. The Industry Productivity program publishes annual measures of output per hour and unit labor costs for U.S. industries. (U.S. Bureau, 2010)
HOW IT IS MEASURED
Productivity is measured by comparing the amount of goods and services produced with the inputs which were used in production. Labor productivity is the ratio of the output of goods and services to the labor hours devoted to the production of that output. Worker productivity can be measured in physical terms or in price terms. Companies can increase productivity in a variety of ways. The most obvious methods include making processes automated and computerized which minimize the tasks that must be performed by employees. Some less obvious techniques are being employed that involve ergonomic design and worker comfort....