Question

Say that the average worker in Canada has productivity of $33 per hour while the average worker in the United Kingdom has productivity of $29 per hour (both measured in U.S. dollars). Over the next six years, say that worker productivity in Canada grows at 1% per year while worker productivity in the UK grows 3% per year. At that point, who will have the higher productivity level, and by how much?

Answer 1

Answer:

The answer is: Canadian workers will still have a higher productivity, it will be $0.40 per hour higher.

Explanation:

We can elaborate the following productivity table:

Year     Canadian productivity                 British productivity

0                   $33 per hour                        $29 per hour

1                   $33.33 per hour                    $29.87 per hour

2                  $33.66 per hour                    $30.77 per hour

3                  $34 per hour                         $31.69 per hour

4                  $34.34 per hour                    $32.64 per hour

5                  $34.68 per hour                   $33.62 per hour

6                  $35.03 per hour                   $34.63 per hour

At the end of year 6, Canadian workers' productivity will be $35.03 and British workers' productivity will be $34.63 per hour (Canadian workers will be $0.40 more productive).