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Japan’s labor productivity in 2023 was $56.8 per hour, which ranked 29th among the 38 member countries of the Organization for Economic Co-operation and Development, according to a country-by-country comparison of productivity for the year published by the Japan Productivity Center (JPC).
Japan rose in the rankings for the first time in 20 years after a prolonged downward trend during which the country hit its lowest place ever at 31st in 2022.
Labor productivity is an index showing the amount of output or services a worker has produced in a certain period of time.
Ireland ranked No. 1 on the list at $154.9 thanks to multiple reasons, including low corporate tax and the fact that foreign-owned enterprises are concentrating their profits to branches in the country. Among the Group of 7 advanced countries, the United States ranked top at the 8th position at $97.7 while Japan ranked last. Countries close to Japan include Poland at $57.5 and Estonia at $56.5.
In 2023, Japan finally saw some progress in the normalization of its economic activity following the COVID-19 pandemic, which lagged compared to other countries. The country’s economic growth rate also went up. Those factors are believed to have helped Japan rise in the rankings.
“Before, the superior quality of Japanese products and services were not fully reflected in the rankings,” the JPC wrote. “Since there have been price pass-through moves, the situation in Japan is becoming similar to that of other countries.”
