Trends in manufacturing productivity and labor costs in the U.S. and abroad, (EXCERPT), Monthly Labor Review Online, December 1987

Trends in manufacturing productivity
and labor costs in the U.S. and abroad

Arthur Neef and James Thomas

The U.S. gain in manufacturing labor productivity in 1986—about 3½ percent—was matched only by the United Kingdom among 11 other industrial countries studied. Modest increases of about 1 to 3 percent were recorded by Japan and five European countries—Belgium, Denmark, France, West Germany, and Italy. Productivity fell slightly in Canada and two European countries—the Netherlands and Norway—and remained unchanged in Sweden.

While this marked the fourth consecutive year of relatively large productivity increases in the U.S. manufacturing sector, manufacturing employment declined for the second consecutive year to 91 percent of the 1979 peak. Employment also fell in Japan and four of the European countries, but rose 1 to 2 percent in Canada, Germany, the Netherlands, Norway, and Sweden.

Unit labor costs—a measure of the relationship between hourly labor costs and labor productivity (output per hour)—fell about ½ of 1 percent in U.S. manufacturing in 1986. Unit labor costs rose in all of the other industrial countries—by about 1 percent in Japan and Belgium, more than 7 percent in Norway and Sweden, and 2 to 5 percent in the other countries. This marked the first year since 1981 that Japanese unit labor costs rose. Korea (Republic of Korea), newly added to the unit labor cost comparison, recorded an increase of 3½ percent.

This excerpt is from an article published in the December 1987 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.

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