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Delaware's Decade of Poor Productivity is unlikely to change...
no productivity gains equals no wage gains
Center for Economic Policy and Analysis
Over a decade, Delaware has performed poorly on labor productivity and output per employee. The differences in labor productivity explains the differences in the state's business cycles and the persistence of the state's income inequality.
With falling labor productivity and output per employee, it comes as no surprise that Delaware has undergone five recessions since 2009 and that Delaware's per capita income has gone from above the nation to below the nation.
GRAPH 1 (below)From 2009-19 Delaware's labor productivity fell by 6%. Meanwhile, labor productivity rose 14% in Maryland, 5% in New Jersey, and 12% in Pennsylvania. Throughout the Northeast, labor productivity was up 9% and soared 13% in Texas.
GRAPH 2 (below)Similar to labor productivity, from 2009-19 output per employee fell in Delaware by 5%. At the same time, rising 13% in Maryland, 6% in New Jersey, and 15% in Pennsylvania. Throughout the Northeast, output per employee rose 9% and rocketed up 16% in Texas.
Productivity increases when businesses and government invest in new technology to improve output without increasing employees, such as assembly robots in factories and IT software and Hardware such as ATM’s and direct check-out at supermarkets.
Businesses are not making these investments in Delaware or launching a new business mainly because of consistently underperforming public schools. Other reasons include high electric rates, very high corporate taxes, and high personal income taxes.
With job growth concentrated in lower-paying service sector industries, Delaware’s low productivity status is unlikely to change.
(Labor productivity is a measure that represents the amount of goods and services that can be produced relative to the amount of labor service used. Labor productivity measures the rate at which labor is used to produce the output of goods and services, typically expressed as output per hour of labor. Output per employee is a measure that represents the amount of goods or services a person engaged in a particular occupation (job) can produce over an interval of time, such as a year, regardless of the actual number of hours worked.)
SOURCE: The Bureau of Labor Statistics has published experimental state-level labor productivity and cost measures for the private non-farm sector.


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