productivity
The efficiency of production, measured as output per unit of input — typically output per worker hour — a key driver of long-run economic growth and living standards.
Example
“Technology-driven productivity gains allowed the economy to grow without inflation — more output from the same number of workers.”
Memory Tip
PRODUCTIVITY = more output per worker. The ultimate source of rising living standards.
Why It Matters
Productivity growth directly affects your earning potential and job security. When an economy becomes more productive, wages typically rise and employers can afford to pay workers more, which increases your long-term wealth and purchasing power.
Common Misconception
Many people think productivity simply means working harder or longer hours, but it actually measures how much output you generate per hour worked. You can be more productive by working smarter through better tools or processes, not necessarily by working more hours.
In Practice
Consider a factory worker who produces 10 widgets per hour using basic machinery. After the company invests in new automated equipment, the same worker produces 15 widgets per hour. Productivity increased by 50 percent even though the worker did not work any harder, and this efficiency gain allows the company to increase wages and remain competitive globally.
Etymology
From Latin 'productivus' (capable of producing) — the capacity to PRODUCE efficiently.
Common Misspellings
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See Also
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