Japan’s labor productivity sinks to lowest level since 1970

Yomiuri Shimbun file photo
Office buildings in Minato Ward, Tokyo

Japan’s labor productivity in 2021 ranked 27th among the 38 Organization for Economic Cooperation and Development member countries, according to the Japan Productivity Center.

OECD data on labor productivity indicates the output a worker produces in a certain amount of time.

According to the center, Japanese workers logged $49.9 per hour in 2021, giving Japan its lowest ranking since comparable data was first compiled in 1970.

Among OECD countries, Ireland topped the ranking at $139.2, followed by Luxembourg at $119.2. Both have low corporate tax rates and many foreign-owned companies operating in the countries.

The United States ranked seventh at $85.0, the highest among the Group of Seven countries.

Even though Japan’s economic growth rate increased, labor productivity fell compared to 2020 as output was sluggish amid government restrictions on economic and social activities which resulted in people going out less.

Compared to other developed countries, Japan is believed to invest less in human capital. The Japan Productivity Center stressed that investment in people is vital to increase labor productivity.