Productivity is the single most important determinant of a society’s standard of living. But how can you gauge it, and why does it matter? For economists, productivity simply refers to the level of economic output generated for a given amount of input – or, put simply, how much you get out of what you put in. Tracking productivity is important not only to better understand economics, but also to make sense of any number of global dynamics. This is because highly productive societies are able to generate more with what they have, receiving more in return for this increased output. Such highly productive societies tend to generate more wealth, and growing wealth typically confers increased political power.
In the United States, broadly speaking, we have seen productivity rise nearly every year since 1889 (though 2022 is projected to show the largest productivity decline in nearly 50 years). These national numbers, however, obscure the differences in productivity among large U.S. cities along with the factors that produce such variations. In this second report from the American Growth Project, we examine the productivity levels of the 50 largest microeconomies in the United States along with how those productivity levels have shifted during the last 15 years.