But service work is not priced properly or at all and is thus not properly accounted for in that simple measure of productivity. The definition of productivity you point to is just one definiton and just one measure not the exclusive measure.

How do you account for volunteer or off the book's labor/tips? Almost all manufacturing labor is W2 or 1099 book kept. Very few people in the U.S. work manufacturing jobs for no pay or are paid off the books. The value of volunteer, off the books, unpaid internships, barter, rent in lieu of pay, unpaid care giving and child care is huge but because it is not given a dollar value it does not show up in GDP and they are all service work (jobs even if not paid). When manufacturing labor dropped these categories increased as a percentage of hours worked. Also service jobs average lower pay rates than manufacturing jobs so that also increases the divergence between productivity and wages.

Another thing to think about is how many hours many people who work salary work vs. how many hours are actually recorded. I am salary but I fill out a timecard because some of our work is on Time and Material contracts so how much our customers pay is depends on how many hours we work on their job. Some of our other work is Firm Fixed Price so how many hours I work on those jobs does not affect cash flow. I also work on internal research and development or other tasks unrelated to active customers. I work more hours than I record on my timecard because we don't have charge codes for everything I do. I am salary exempt and thus don't qualify for overtime compensation or limits to hours I can work in a given time frame we also have an unlimited time off policy. I am going to research how productivity in the GDP/hours metric to see how they estimate hours worked because it is not reported for many jobs.

TEK