An article titled Seven Reasons Why Korea Has the Worst Productivity in the OECD, from March 2014, has been recently making rounds in TK's Facebook feed again. It was a dumb article at the time of the publication, and it remains dumb today. Regardless, the article continues to receive approving reactions--which merits pointing out exactly what is dumb about this article.
First, the article itself. The author Michael Kocken, writing for Business Korea magazine, begins with this:
Korea was recently named the worst place for worker productivity in the OECD, which was featured in a recent article by this magazine. This news is not surprising for any professional previously or currently working in Korea, as the notorious overtime hours coupled with years of low growth have been a widely-discussed issue over the past few years.Then the article makes the familiar, banal complaints about Korea's corporate culture: Korea's corporate structure is too rigid and hierarchical; there is no honest and direct communication; worker distraction from the Internet and smartphones; hungover workers, valuing form over substance, new workers who are poorly equipped, and the need to put in useless "face time."
|Typical office scene in Korea. Is this the home of low productivity?|
What's dumb about this article?
First, the article's starting premise is flatly untrue. Korea's labor productivity was not the worst in the OECD. Korea's labor productivity per worker in 2012 (which was the most recent data available as of the article's writing) was at 23rd place among the 34 OECD member states. Sure, 23 out of 34 is still in the lower range. But it is a far cry from being at the worst place.
But let's be generous and make an ample allowance between the bottom third and the rock bottom. After all, it would be good for Korea to aspire to be on the above-average side of the OECD. However, even this allowance cannot save this article. The main problem with the article is that the author does not seem to understand what "labor productivity" means. This is apparent from the second sentence of the article's opening paragraph, which refers to Korea's long overtime hours. Even setting aside the factual inaccuracy that TK noted earlier, this is a strange statement.
Why is it strange? Because OECD measures labor productivity by, essentially, dividing "output" by number of hours worked. (The precise methodology is somewhat more complicated, especially on how one defines "output." If you are interested in the actual methodology, you can find it here.) This necessarily means that the longer one works, the lower the labor productivity, because if you increase the denominator while holding the numerator at the same level, the result is always a smaller number. In other words, Korea's labor productivity is low because of long overtime hours, not despite the overtime, as Kocken appears to imply.
This leads us to the most important lesson: what OECD means by "labor productivity" is not what an ordinary person would think. When OECD states Korea has low labor productivity, the word "productivity" is not being used in the same manner in which regular people talk about being "productive at work." But the latter is exactly how the author Michael Kocken uses the term "productivity." Then the article simply runs with the incorrect understanding of the term, and make the trite, stereotypical complaints about Korea's corporate culture.
(More after the jump.)
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