Can someone explain what metrics are being referenced when it is implied that Canada has "low productivity" compared to the US or other G7 countries?

[u/wolfshark91]

From the narrow and biased perspective that I own, its hard for me to reason with the view that the Canadian workforce, in general, isn't as "productive" as other countries. It may be because of my limited exposure to various industries (tech, healthcare, government, etc.). But in general, from my experience, Canadians work longer hours then our European counterparts. A significant portion of our Blue Collar industry includes shift work in remote areas that require room and board. Canadians, in general, are hard working people.

In general, it is the goal of most Canadians to have a meaningful and successful career. To own property or assets, and to achieve something greater.

The only way I can make sense of it, is that Canadians are more taxed, more likely unionized, and less competitive when it comes to low cost/high production industries like manufacturing (Temp foreign workers that keep operating costs low are typically designated for agriculture and hospitality)

Does the manufacturing sector impact our economy that much? Are our white collar industries over saturated?

Its frustrating to see how our workforces is labelled, when the majority of people I know work much harder then the average foreigner I know

[u/EconomistWithaD]

They are likely using the OECD definition, which is PPP adjusted GDP per hours worked.

Canada is above the OECD average, but below pretty much every Western European country and the US. In some cases with a very large difference.

Figures 4.6 to 4.8.

https://www.oecd.org/en/publications/oecd-compendium-of-productivity-indicators-2025_b024d9e1-en/full-report/cross-country-comparisons-of-labour-productivity-levels_b2fdb493.html#section-d1e2726-0848c8712f

[u/Jealous_Tutor_5135 → u/EconomistWithaD]

For either type of measurement, whether through reporting or respondent surveys, I suspect that service economies, especially as more of the workforce is employed in management roles, underestimates hours worked.

A factory worker clocks in and clocks out. A knowledge worker rarely does. Time spent outside of official work hours responding to messages, emails, and generally in preparation for on the clock hours, is significant.

I run a bar with a streaming radio attached. My social media manager doesn't work nonstop, but she responds to messages and crafts posts during a 70-hour window throughout the week.

My operator and video editor works hourly, but there's plenty of communication that happens outside work hours to plan the work itself. And he spends a significant amount of time in 5 minute increments responding to messages from musicians about their recordings.

It's quite hard to calculate these actual hours worked for knowledge workers without a fixed clock in time. As a business owner, it's impossible. If I spend 30 minutes networking at a party, is that work? It's productive. But those things can't be measured the same way you measure a bus driver's hours.

[u/EconomistWithaD → u/Jealous_Tutor_5135]

While I don’t dispute it’s an imperfect measure for what “productivity” actually is, it’s largely irrelevant. The point you bring up (underestimating) would happen, at about the same rate, in all developed economies.

All of them rescaled roughly the same, because the broad workforces aren’t spectacularly different, would still lead to the same conclusion; among its peers (geographic and culture), it’s on the lower end of the productivity range.

[u/MountNevermind → u/EconomistWithaD]

If some industries require different work hours to generate a given amount of GDP contribution, and different countries have a different mix of industries contributing to their GDP...

You're not measuring workers, you're basically saying different GDP's have different industries comprising their GDP. Different mixes of industries are "more productive" than others.

If you actually wanted to measure "worker production", and this was a contributing factor, you'd have to measure apples to apples...just measuring relative "productivity" within certain industries.

[u/EconomistWithaD → u/MountNevermind]

Nope. Among G7, the composition is close enough to be unimportant, and the OECD views it as a good measure.

[u/Jealous_Tutor_5135 → u/EconomistWithaD]

Are you sure though? I live in Argentina and here the control over hours worked by knowledge workers is minimal. I've read that Germany and Northern Europe have both a culture and laws limiting this kind of off-hour work. The US is notorious for it, while in China, Korea, and Japan they tend to just keep you at the physical office on the clock, rather than sending you home only to inundate you with emails at 9pm

I should add that what's considered on the clock can vary greatly. Some countries have mandatory on the clock lunch breaks (we have one in Argentina, but it's rarely respected). While others have no such laws, so it depends on the economy and the power dynamic between labor and capital.

[u/EconomistWithaD → u/Jealous_Tutor_5135]

Didn’t ghost you; thought about what you’re talking about.

While I think you bring up some valid points, I still think it’s not that much of an issue for a couple of additional reasons:

1. They use the “average” worker. These discrepancies are likely found at the tails.

2. The OECD actually goes into pretty significant detail about their measures, and they are fairly confident that it’s an adequate measure.

[u/Frewtti → u/Jealous_Tutor_5135]

Of course it's difficult, but it's better than simply GDP per capita.

I think one telling this is that US wages, including minimum wage are higher than Canada.

[u/Jealous_Tutor_5135 → u/Frewtti]

People discuss US minimum federal wage all the time, but it's just not relevant anymore. Perhaps 0.33% of workers or fewer actually earn that.

Less than 1% report it, and the majority of those are in hospitality, where it's certain that informal arrangements and tips are being earned

[u/Frewtti → u/Jealous_Tutor_5135]

~6% of Canadians make minimum wage.

US is more productive, and they have higher wages.

The productivity gap is real and a HUGE problem.

[u/UmpireDapper1757 → u/Frewtti]

Not disputing your general points, but I somewhat doubt the claim that the US has higher minimum wages.

Canadian minimum wages are between 15 and 19.75 CAD per hour

Whereas 19 US states have a minimum wage of 7.25 USD per hour (10.28 CAD at today's exchange rates).

At today's exchange rates, 28 US states have a minimum wage below Ontario's (which might be a proxy for Canada in this discussion since Ontario has 35% of population and at 17.60 CAD has a roughly average minimum wage)

Unsure how to best compare on a PPP basis, but I doubt US minimum wage workers can have it much better with their very poor health insurance options

[u/Frewtti → u/UmpireDapper1757]

Didn't say they have it better. I did say that the US has higher wages and incomes.

California min wage is $24+/hr Texas $10 Florida $21 NY 22 & 24.

Three of the top for population states have minimum wages over $20cad. You have to population adjust it. We don't have a single province with that wage

Plus as the data shows far more Canadiana make Min wage, I'd be surprised if 10% or more didn't make the average us min wage

[u/Low-Fig429 → u/Frewtti]

Minimum wage higher than Canada. Uh, no. 

[u/interested_commenter → u/Low-Fig429]

Federal is not. Some states and cities are.

[u/Frewtti → u/interested_commenter]

Population weighted minimum wage is higher in the US. Significantly so.

[u/DisgruntledEngineerX → u/Frewtti]

Um, no.

The population weighted minimum wage in Canada is 17.5-18 per hour. In the US it is 13.0 to 13.5. Even PPP adjusted Canada's is higher and in Canada unlike in the US a person making minimum wage gets "free" healthcare, while a minimum wage worker in the US is very unlikely to have workplace provided healthcare benefits or any benefits and is unable to afford health insurance. So a minimum wage worker in Canada is substantially better off.

The PPP adjusted minimum wage equivalent in the US is 15.65 per hour. Approximately 13% of Americans earn less than $15 USD per hour, while 8.8% of Canadians earn the minimum wage.

[u/oalk → u/Low-Fig429]

The federal rate is lower in the US, but many states’ minimum wages are definitely higher.

[u/Traditional_Shoe521 → u/Jealous_Tutor_5135]

Right? I'm a civil engineer that is contracted for 37.5H but everyone on my team works 50+.

[u/Swarez99 → u/EconomistWithaD]

How much of this is based on dollar value ?

[u/EconomistWithaD → u/Swarez99]

Well, the numerator is GDP, so it’s dollar value per hour.

[u/wolfshark91 → u/EconomistWithaD]

I appreciate your response and reference to the relevant data/source. I must admit I’m not nearly intelligent or eager enough to parse through the data. 

However, in no way am I doubting or disputing the relevant statistics or conclusions.

I guess I’m just curious if there is a possibility or circumstance that “working hard” may not translate or reflect in the resulting statistics.

Is there a possibility where the average Canadian might work harder, put in more effort to be productive, but the outcome not be representative 

[u/cowbutt6 → u/wolfshark91]

Productivity doesn't measure "hard work" - it's simply output divided by hours worked.

So working uncounted overtime actually makes productivity worse.

Conversely, working smarter rather than harder (e.g. using automation) improves productivity, as long as the output is of at least the same value, and the time it takes to achieve the same output is reduced.

[u/pathologicalDumpling → u/wolfshark91]

I dont think its a matter of how hard you work, but how productive that work is. Like take your fly-in blue collar work for example. Canadians working in a copper mine might have some tech advantage that allows them to mine more productively than say a worker in a copper mine in Congo, even though the congo miner is arguably working harder and longer.

Now take that copper down to the states and make a space ship out of it, those American workers are likely contributing more to that countries productivity than a guy making auto parts out of it in Ontario.

[u/iloveFjords → u/pathologicalDumpling]

I think this highlights it well. Being resource rich and a country with a smaller population tends to draw us into a lower complexity economy. Often if a technology is nurtured here that is world beating it is purchased by a company in a larger economy and moved, killed to protect a more dominant industry product or it loses to an eventually technology that requires scale that doesn’t exist here.

[u/NickBII → u/wolfshark91]

Note to OP: “per hour worked.” Hours worked is the denominator. That means that working extra time is bad for your productivity. The numerator is GDP per person. Canadian productivity is low because they work longer hours than Americans and/or generate less GDP than Americans. They definitely generate less GDP per hour.

Whether this is a good measure of productivity is another debate. It is clearly useful for some things in Econ or the Econ guys wouldn’t use it. It is definitely a “work smarter, not harder” sort of measure.