THE GRADUAL, powerful trends in the world's economic history generally go unnoticed amidst the crises of the moment - of which there is no shortage this week. But that's not a bad reason to try to take a longer perspective. There are a lot of ways to measure prosperity and, in industrial countries, one useful indicator is the compensation paid to production workers.
By the middle of 1978, in a comparison of 10 rich industrial countries, American workers' compensation ranked fifth. The figures are computed by the U.S. Bureau of Labor Statistics, which accompanies them with a warning that they have certain limitations. That term "compensation" includes not only what's in the pay envelope, but the withheld taxes and the fringe benefits. Since taxes and benefits very widely from one country to another, it is impossible to compare them exactly. The figures are all expressed below in U.S. dollars; the statisticians made computations for each country in its own currency, then translated them at the exchange rates that happened to prevail last July. But if you will accept it as an approximation, the following brief table gives you a fairly good idea of average compensation for production workers in manufacturing, in 10 leading industrial countries: [TABLE OMITTED]
Some of those figures are a bit suspect. You would be justified in doubting the number reported for Italy, the Italians do a large amount of unreported moonlighting at low wages. To add a more subtle qualification, people spend their money differently from one country to another, and governments distribute subsidies differently. The Germans, for example, do not live quite as well as that high number suggests, nor do the British live quite so badly as you might think from their low one.
But it's the change across the 1960s and 1970s that is particularly revealing. The 1978 figure for Japan is exactly the same, discounting inflation, as the figure for the United States in 1960.The pattern is most visible if we take U.S. workers' compensation for each year as 100, and express other countries' levels in relation to it. The numbers below are not dollars, but percentages of the American average that year: [TABLE OMITTED]
What you observe here is the evidence of the success of the post-war economic system, established primarily under American and British laedership in the middle and latter 1940s. It was pivoted on one dominant economy - the U.S. economy - and on the dollar. Its purpose was to generate steady economic growth that would provide a solid basis for political democracy. All that has worked brilliantly - so well that the other countries are now too powerful, and the flows of trade too great, to move within a system managed by the United States alone. If you look at the last column above, you will have a clue to help explain why other countries are suddenly able to bid with such unexpected force against American consumers for food and oil. The industrial world has outgrown the past generation's regime, and is moving uncertainly toward a new one that has not yet been invented. Painful and anxious though the transition may be, it is important to remember that it does not result from failure. On the contrary, it is the price of success - the rising productivity and broadly distributed rewards that are reflected in the pay of industrial workers.