AMERICAN PRODUCTIVITY has been zipping briskly upward for the past couple of years. It's a healthy sign, but it's just about what you'd expect as the country comes out of a recession. Over any longer period, the productivity trend in this country has not been impressive. Productivity - economic output per man-hour - underlies the standard of living, and the Labor Department has just published the international comparisons through 1976. By the standards of the other major industrial nations, the Ameerican gain in productivity is, once again, strikingly small.
From 1970 to 1976, a span that covers a boom and two recessions, productivity in the United States rose 17 per cent. In France it rose 37 per cent; in West Germany, 42 per cent; in japan, 40 per cent. Even Britain, with all of its well-advertised troubles, scored slightly better than the United States.
One large reason for the American performance today is the birth rate of the 1950s. Young people are now leaving school and entering the labor market in unprecedented numbers. Among women, the proportion going to work is steadily rising. The ratio of capital investment to manpower is no longer increasing quite so fast as it used to. The economy is growing, but a little more of it is coming from labor and a little less from machines than Americans ecpected in 1970. In the other industrial nations there's nothing like the surge of young people into the labor force that's going on here and in Canada.
The international comparisons make an interesting point about labor costs, on which the Labor Department keeps a careful eye. In this country, average wage costs per dollar of production rose 35 per cent in those same six years from 1970 to 1976. In West Germany the rise was exactly the same, calculated in Deutschemarks. But the Deutschemark rose, over those years, and the dollar sank. Those shifts in currency values are not merely the obscure mutterings of banks' computers. They make a difference. Translated into American dollars, German labor costs doubled over those six years. In France they rose 90 per cent, and in Japan 132 per cnet. That helps explain why European businessmen now describe American labor costs as competitive for the first time since World War II and are beginning to step up their investment in plants here.
Slow growth of American productivity contributed to the devaluation of the dollar in the early 1970s. That cost the average American family something in its standard of living. But it has also meant more jobs here than we otherwise would have had. Despite the present high unemployment, the gain in jobs in this country and Canada in recent has been far faster than anywhere else in the industrial world. Nobody really planned it that way. That's simply the waay the international system workd when it's working - and, at the moment, for the United States, it seems to be working fairly well.