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Study: U.S. Workers More Productive Than Japan, Germany

October 14, 1992

BALTIMORE (AP) _ The image of the lazy, inefficient American worker isn’t true, according to a study that found U.S. employees are more productive than those in Japan, Germany, France and Britain.

If the United States is considered at the top of a scale of 100, French worker productivity was five points below at 95, West Germany was third at 89, Japan fourth at 77, and Britain fifth at 75, said William Lewis, director of the McKinsey Global Institute, which sponsored the study released Tuesday.

The United States has higher productivity than the other big industrial nations largely because of its highly competitive and open trade environment, the study said.

″There’s more competition for U.S. companies,″ said Martin Baily, a University of Maryland economics professor and coauthor of the study. ″Managers are forced to raise productivity in order to survive and be profitable.″

Productivity is the ratio of goods and services produced to the resources used to produce them. Worker productivity measures goods and services produced by employees in an hour, week or year.

In 1990, each full-time U.S. worker produced $49,600 in goods and services, compared with $44,200 for West German workers, $38,200 for Japanese workers, and $37,100 for British workers, the institute said.

East Germany was not included in the figures because data in the study was collected before the October 1990 reunification. The study also excluded statistics about workers in government, education, health and real estate.

Japan led the United States in productivity in automobile production and consumer electronics, but the rest of its economy lagged behind, Lewis said.

Japanese productivity in general merchandise retailing, for example, was only 44 percent of that of U.S. workers, and Japanese factory workers overall produced only 80 percent as much as Americans on an hourly basis, the study said.

″What they’ve done is create a powerhouse in automobiles, semiconductors, and consumer electronics, and they’ve exported those products around the world,″ Baily said. ″But they don’t encourage competition in the rest of their economy, so the rest has really languished.″

Researchers had expected to find the five countries about equal because of the increasingly global marketplace and were surprised by the results, Lewis said.

Dr. Wassily Leontief of the Institute for Economic Analysis at New York University said the results also surprised him.

″The wages of American workers are not the highest, they are lower than some other countries, and usually wages are supposed to reflect productivity,″ Leonties said. ″Supposedly, the more productive labor is, the higher wages usually are.″

However, Faye Duchin, director of the Institute for Economic Analysis at New York University, said worker productivity figures should not be the only numbers considered by policy makers.

″That kind of reductionist approach is popular because it’s generally relatively easy to interpret. It’s useful for public debate and things like that, but I’m not sure how much it advances us in understanding a basis for action.″

The McKinsey Global Institute, a Washington-based division of the McKinsey consulting firm, combined data from a Dutch study on manufacturing with figures it compiled on the service sector for an overall estimate of productivity. The service sector now employs three quarters of all American workers.

Lewis’ institute gave the data to three productivity experts: Nobel laureate Robert Solow; Francis Bator of Harvard, and Baily, who is also a member of the Brookings Institution, a Washington think tank.