A common metric in economics assesses the amount of physical resources available to each employee. This is determined by dividing the total value of a nation’s or firm’s physical capital stock by the total number of workers. Physical capital stock includes items such as machinery, buildings, and equipment used in production. For example, if a company has $1,000,000 worth of equipment and employs 100 people, the value is $10,000 per worker.
This value serves as a critical indicator of labor productivity. Economies or firms with greater amounts of physical resources available to each employee generally exhibit higher levels of output per worker. Furthermore, it can be used to track changes in the availability of resources over time, thereby providing insights into economic growth and development. Historically, increases in this measure have been associated with significant improvements in living standards and economic prosperity.
