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roductivity and the Economy: A Chartbook U.S. Department of Labor Bureau of Labor Statistics June 1983 Bulletin 2172 Productivity and Sfh© E©®n©m^: U.S. Department of Labor Raymond J. Donovan, Secretary Bureau of Labor Statistics Janet L. Norwood, Commissioner June 1983 Bulletin 2172 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 - Price $5.00 ☆ U.S. GOVERNMENT PRINTING OFFICE : 1983 0 - 3 8 1 - 6 0 8 (4 3 0 4 ) reface Productivity plays a role in most issues of economic policy. Conse quently, there is a continuous need for information about productivity, though the focus of attention varies with the economic climate. During periods of rising prices, attention centers on the relationship among productivity, wages, and costs. The relation between productivity and employment has also been a con cern, especially in times of economic slowdown. Furthermore, the link bet ween productivity and economic growth remains a perennial subject of intense study. This chartbook is designed to show what productivity is and how it interacts with other aspects of the economy. It is divided into two parts. The first part shows how productivity has changed over time. The second portrays changes in costs and prices as influenced by productivity. It also includes charts tracing trends in capital formation, and research and development. Wherever possible, in te rn a tio n a l c o m p a ris o n s are presented so as to add perspective to a subject that is often treated solely within a national framework. This chartbook was produced in the Office of Productivity and Technology of the Bureau of Labor Statistics. Material in this publica tion is in the public domain and may, with appropriate credit, be reproduc ed without permission. C ontents V Page Part I: Produetlvlty and how It Is measured................................................................................................ 1 Charts: 1. Output per hour of all persons in the business economy, 1909-82................................................................... 2. Output per hour of all persons in the total business and nonfarm business economies, 1947-82 ................. 3. Output per hour of all persons, output per unit of capital, and multifactor productivity, private business sector, 1948-81 ................................................................................................................. 3 5 4. Output per hour of all persons, capital effects, and multifactor productivity, 1948-73 and 1973-81 ............. 5. Output per hour of all persons by major sector, 1947-81 .................................................................................. 6. Output per employee year, output, and employee years in the Federal Government, measured sample, fiscal years 1967-81 ...................................................................................................................................... 7. Output per employee year by functional grouping, Federal Government, fiscal years 1967-81 ..................... 8. Output per employee hour in selected industries, 1960-81 .............................................................................. 9. Productivity rates before and after 1973, selected industries.......................................................................... 10. Trends in real gross domestic product per employed person, selected countries and years, 1950-81........... 11. Relative levels in real gross domestic product per employed person, selected countries and years, 1960-81 ......................................................................................................................................................... 12. Output per employee hour in manufacturing, selected countries, 1950-81 ...................................................... 13. Output per employee hour in manufacturing, selected countries, 1950-73 and 1973-81 ................................. 14. Levels of output per hour in the iron and steel industry, selected countries and years, 1964-80 ................... 9 11 23 25 27 29 Part ID: Changes In productivity: [Relationship to costs, prices, and real income, and underlying fa c to rs ............................................................................................................................. 31 15. Output per hour of all persons, unit labor costs, and compensation per hour in the business economy, 1948-82 ......................................................................................................................................................... 16. Composition of price changes, business economy, 1948-82 ........................................................................... 17. Output per hour of all persons, compensation per hour, unit labor costs, and prices in major sectors, 1973-81 ......................................................................................................................................................... 18. Output per employee hour and compensation per employee hour, selected industries, 1967-80.................. 19. Output per employee hour and prices, selected industries, 1960-80 ............................................................... 20. Output per employee hour, compensation per hour, and unit labor costs in manufacturing, selected countries, 1973-81 ....................................................................................................................................... 21. 22. 23. 24. Output per hour of all persons and real compensation per hour in the business economy, 1950-82 ............. Output per employee hour and employment, selected industries, 1960-81...................................................... Output and employment in selected industries with similar productivity growth, 1960-81 ............................. Gross domestic product per capita and average weekly hours per person engaged in production in the business economy, 1947-81 ........................................................................................................................ 7 13 15 17 19 21 33 35 37 39 41 43 45 47 49 51 Contents— Continued vi Page 25. Output per hour of all persons in the business economy, adjusted for shifts in employment from the farm to the nonfarm business economy, 1947-82.................................................................................. 26. Gross nonresidential capital formation per employed person, selected countries, averages for periods, 1960-81 and 1974-81 .................................................................................................................................... 27. Expenditures for research and development as a percent of gross national product, selected years, 1961-82 ................................................................................................................................ 28. Expenditures for research and development as a percent of gross national product, selected countries, 1961-82 ......................................................................................................................... Appendix: Supporting data for charts 53 55 57 59 61 Fart l fP ro d u e tiw ity a n d b@m St is m e a s y r e d Productivity is a concept that ex presses the relationship between the quantity of goods and services pro duced—output—and the quantity of labor, capital, land, energy, and other resources that produced it—input. Productivity can be measured in two ways. One way relates the output of an enterprise, industry, or economic sector to a single input such as labor or capital. The other relates output to a composite of inputs, combined so as to account for their relative impor tance. The choice of a particular pro ductivity measure depends on the purpose for which it is to be used. The m ost g e n e ra lly u seful measure of productivity relates out put to the input of labor tim e -o u tput per hour, or its reciprocal, unit labor requirements. This kind of measure is used widely because labor productivity is relevant to most economic analyses, and because labor is the most easily measured in put. Relating output to labor input provides a tool not only for analyzing productivity, but also for examining labor costs, real income, and employment trends. Labor p ro d u c tiv ity can be measured readily at several levels of aggregation: The business economy, its component sectors, industries, or plants. Nearly all of the productivity measures used in this chartbook are measures of output per hour. De pending on the components of the measure used and the context, labor productivity will be called output per hour of all persons engaged in the productive process, output per employee hour, or just output per hour. 1 The use of labor productivity in dexes does not imply that labor is solely or primarily responsible for productivity growth. In a techno logically advanced society, labor ef fort is only one of many sources of productivity improvement. Trends in o utput per hour also re fle ct technological innovation, changes in capital stock and capacity utiliza tion, scale of production, materials flow, management skills, and other factors whose contribution often cannot be measured. The output side of the output per hour ratio refers to the finished product or the amount of real value added in various enterprises, in dustries, sectors, or the economy as a whole. Few plants or industries produce a single homogeneous com modity that can be measured by simply counting the number of units produced. Consequently, for the pur pose of measurement, the various units of a plant’s or an industry’s out put are combined on some common basis—either their unit labor re quirements in a base period or their dollar value. When information on the amount of units produced is not available, as is often the case, out put must be expressed in terms of the dollar value of production, ad justed for price changes. As noted, productivity can be measured in terms of several inputs. Multifactor productivity measures, consisting of output per unit of com bined inputs of labor and capital, have been developed by b l s . They are included in this chartbook and cover total private business, nonfarm business, and manufacturing. 2 Pr@<o!y©tivity has g@n@rally improved ©wer tim© Official U.S. measures of produc tivity begin with the year 1909 and continue to the present. In general, productivity has moved upward. In 1982, productivity in the business economy was 41/2 times above its 1909 level. Period Output per hour of all persons in the business economy1 (average annual percent change) 1909-82 ....................................................................... 2.5 1909-29 .............................................................. 1929-47 .............................................................. 1947-82 .............................................................. 1.6 2.9 2.6 1Total private economy, 1909-46. 3 Chart 1. Output per hour of all persons in the business economy, 1909-82 Index, 1909 = 100 Source: Bureau of Labor Statistics Ratio scale 4 Frodlyetiwity adlwaoie© has stowed ®w<sr the past 1? years Rates of growth in the productivity of the business economy and the nonfarm business economy have significantly slowed since 1965. Ex planations for the slowdown have in cluded the effects of change in the composition of the labor force as the proportion of younger and less ex perienced workers has increased; a slower rise in the capital-labor ratio, resulting from lessened investment in equipment and structures at the same time that employment and hours rose strongly; a leveling off in research and development expend itures; diversion of investment funds to pollution abatement; the matura tion of some industries with little new technology; and changes in at titudes toward work. No simple ex Period planation for the decline exists, nor is there general agreement on the quantitative impact of the various factors. The deceleration since the mid-1960’s must really be broken in to two periods—the period from 1965 to 1973 and from 1973 to the present. The factors affecting productivity trends during these two periods were quite different. The composition of the labor force shifted to less ex perienced workers in the 1965-73 span compared with what it had been between 1947 and 1965. Growth in the capital-labor ratio, strong in the 1947-65 and 1965-73 periods, weakened considerably from 1973 forward. Output per hour of all persons (average annual percent change) Business economy Nonfarm business economy 1947-82 ............................................... 2.5 2.4 1947-65 ...................................... 1965-73 ...................................... 1973-82 ...................................... 3.4 2.4 .9 3.3 2.4 .7 5 Chart 2. Output per hour of all persons in the total business and nonfarm business economies, 1947-82 1947 1950 1955 Source: Bureau of Labor Statistics 1960 1965 1970 1975 1980 1985 6 [MiuStifaeS©r pr@dly©tD¥ity !ndex<is take aee©uinit ©f ©apetal as well as labor inputs Multifactor productivity, measured by output per unit of combined labor and capital input, rose an average of 1.5 percent per year from 1948 to 1981 in the private business sector. This new productivity series shows the changes in the amount of labor and capital used in production. As such, it reflects the joint effect of many influences, including changes in technology, the level of output, utilization of capacity, the organiza tion of production, managerial skills, as well as changes in the char a cteristics and efforts of the workforce. The tra d itio n a l p ro d u c tiv ity series—output per hour of all per sons—reflects these influences and also the impact of changes in capital per unit of labor input. The new measures, therefore, supplement the existing measures by providing a basis for measuring that impact. Over the 1948-81 period, when multifactor productivity increased 1.5 percent per year, the traditional productivity measure of output per hour rose 2.4 percent per year. Therefore, the growth in capital per hour contributed 0.9 percentage point to the growth in output per hour. Output per unit of capital services fluctuated between 1948 and 1981 but did not register a significant trend over the period as a whole. 7 Chart 3. Output per hour of all persons, output per unit of capital, and multifactor productivity, private business sector, 1948-81 1948 1950 1955 Source: Bureau of Labor Statistics 1960 1965 1970 1975 1980 1985 8 Multifactor produoSowity trends refleet a sigmifneamt slowdown for nearly all ®f tBi® past 1® years The growth in multifactor produc tivity in the private business sector showed two distinct patterns: 2.0 percent per year from 1948 to 1973, but only 0.1 percent per year from 1973 to 1981. This slowdown reflected a falloff in output growth, coupled with a faster growth of com bined inputs of labor and capital. The accelerated increase in labor and capital inputs after 1973 was due to the faster increase in the hours of all persons. The annual rate of growth of capital was slower after 1973. The tra d itio n a l p ro d u c tiv ity measure of o utp ut per hour slowed—dropping from a growth rate of 3.0 percent during the 1948-73 period to 0.8 percent from 1973 to 1981. Of this 2.2 percentage point falloff, 0.3 percentage point was the result of the slowdown in the growth of capital per unit of labor in put. The balance—that of multifac tor productivity growth—reflected the remaining influences. Average annual rates of change in output per hour of all persons, the contribution of capital services per hour, and multifactor productivity, 1948 to 1981 1948-81 (D 1948-73 (2) 1973-81 (3) Output per hour of all persons................................ 2.4 3.0 0.8 -2.2 Minus: Contribution of capital services per hour2..................... .9 1.0 .7 -.3 Equals: Multifactor productivity3 ............. 1.5 2.0 .1 -1.9 Measure Slowdown (2-3) Private business1 1 Excludes government enterprises. 2 Change in capital per unit of labor weighted by capital's share of total output. 3 Output per unit of combined labor and capital input, 9 Chart 4. Output per hour of all persons, capital effects, and multifactor productivity, 1948-73 and 1973-81 Average annual rates of change, in percent 3.0 30 Capital effects 2.5 2.5 1.0 CO 08 c o 2.0 CO CD CL i— 15 o =J o H— 1.5 h - t H CD CL CJ "5 o CL Multifactor productivity growth '■ . 2.0 1.0 S o !_ 1.7 0.8 C5 0.7 0.5 0.1 Private business 1948-73 1973-81 Source: Bureau of Labor Statistics Private nonfarm business 1948-73 1973-81 Manufacturing 1948-73 1973-81 10 Th@ m ajor s t o lo n of th@ teotniomy display widely waryipg produetnwity Iremids Wide variations prevail between the rates of productivity change of the various sectors of the economy. All sectors, however, experienced significant slowdowns of their average annual rates of productivity improvement after 1965. Further more, all sectors, except commuhications, had slower rates of gain from 1973 to 1981 than from 1965 to 1973. Output per hour (average annual percent change) C om m unications.................................. F a r m ...................................................... Electricity, gas, and sanitary services............................................. Transportation....................................... T ra d e ...................................................... M anufacturing....................................... M in in g .................................................... 1947-81 1947-65 1965-73 1973-81 5.3 4.8 5.4 5.3 4.7 5.2 5.3 3.4 4.4 2.3 2.4 2.7 2.2 6.4 2.1 2.4 2.6 4.2 3.6 2.2 2.6 2.7 2.5 .3 .2 1.0 1.7 5.0 1 Adequate productivity data are not available for services; construction; and finance, insurance, and real estate. 11 Chart 5. Output per hour of all persons by major sector, 1947-81 Index, 1947 = 100 Source: Bureau of Labor Statistics Ratio scale M m f F e d e ra l fu n c tio n s 12 h a w s p r o d u c tiv ity G o v e rn m e n t s h o w n a d v a n c e s In recent years, b l s has developed and refined productivity measures for a substantial portion of the Federal Government, which employs 20 percent of all governm ent workers. Currently, these measures cover about 66 percent of Federal civilian employment. Productivity in creased in the measured sample at a rate of 1.5 percent a year between 1967 and 1981, reflecting a 1.4-per cent average annual increase in out put and a -0.1-percent average an nual decline in employment. s ig n ific a n t 13 Chart 6. Output per employee year, output, and employee years in the Federal Government, measured sample, fiscal years 1967-81 1967 1968 1969 1970 1971 1972 Source: Bureau of Labor Statistics 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 14 Improwed t@ehn©i©iy mderfoes mueh ©f the rising produetSwity in fyn©ti@ns ©f the Federal Government Federal Government organiza tions have been grouped into 28 functional classifications. Some functions are fairly homogeneous, such as finance and accounting; others, such as information services, represent aggregations of diverse activities. Productivity trends for the functions varied substantially, rang ing from long-term increases of 11.6 percent per year for communications to -0.8 percent in printing and d u p lic a tio n . Nineteen of the categories exceeded the rate for the overall sample while nine fell below. The largest gains in productivity were due to technological im provements in equipment and the in troduction of computerized systems. Thus, the increase in productivity in the communications function bet ween 1973 and 1981 was associated with a sharp growth in output (11.0 percent annually) and a declining work force (-0.6 percent annually). Through equipment upgrading, technological improvements, and the increased use of automated facilities, the Federal Telecommuni cations System, for example, was able to service an expanding volume of calls at lower cost. Noteworthy productivity advances also occurred in library services. The 5.2-percent annual growth in produc tivity was linked with an 8.1-percent annual rise in output and a 2.8-percent annual increase in employee years. The application of automated systems to data retrieval systems, cataloging, circulation, distribution, and inventory control contributed to productivity ad vances. Among the functional areas which experienced long-term productivity declines were legal activities. As the scope of cases adjudicated has become more complex (this is not fu lly reflected in the output measure), the productivity index understates possible actual improve ment. In printing and duplication, the long-term p ro ductivity drop is traceable to declining workloads which were not fully offset by input adjustments. 15 Chart 7. Output per employee year by functional grouping, Federal Government and total measured sample, fiscal years 1967-81 Average annual percent change Communications1 Library services Loans and grants General support services Personnel investigations Records management Buildings and grounds maintenance Traffic management3 Procurement Specialized manufacturing Transportation Finance and accounting Social services and benefits Regulation-rulemaking and licensing Regulation-compliance and enforcement Education and training1 2 Audit of operations Personnel management S upply and in ve n to ry co n tro l Total Postal service Natural resources and environmental mgmt. Equipment maintenance2 Information services Medical services Military base services Electric power production and distribution Legal and judicial activities Printing and duplication -1 1Fiscal years 1973-81. ^Fiscal years 1968-81. 3Fiscal years 1972-81. Source: Bureau of Labor Statistics 0 2 4 6 8 10 12 16 ProduetiwSty In imdiwidoal indy strifes has ©hasugidl at widely warying rates Productivity trends in individual in dustries are widely dispersed around the average for the economic sector, such as manufacturing or transpor tation, to which they belong. For ex ample, productivity in manufacturing rose at an average annual rate of 2.7 percent between 1960 and 1981 but a number of the industries for which b l s develops measures showed rates far in excess of the manufacturing average and many showed rates well below. Productivity growth differs be tween industries for a variety of reasons. Some industries, such as hosiery, which (together with syn thetic fibers and malt beverages) led for the period with an average annual increase of close to 7 percent, in stalled highly advanced production machinery and enjoyed rapidly grow ing demand for their output. Air transportation’s showing is linked to the introduction of jetliners during the sixties, accompanied by strong expansion in air travel. At the other end, the lack of productivity gains in footwear has been linked to dif ficulties in adopting mass produc tion methods, and the decline in pro ductivity in coal mining has been partly related to the need to comply with new safety and health regula tions after 1969. 17 Chart 8. Output per employee hour in selected industries, 1960-81 Average annual percent change 11963-80. 21960-80. 31967-80. Source: Bureau of Labor Statistics 18 Industry produetswity growth has stowed sinee the early 1970’s The slowdown in productivity growth in recent years has been per vasive among industries. Four-fifths of the 116 industries for which ade quate measures were available up to 1981 experienced lower productivity growth from 1973 forward than they had previously. 19 Chart 9. Productivity rates before and after 1973, selected industries 1947-73 1973-81 Average annual percent change __________________ _____ Telephone communications Synthetic fibers ®__________ Bottled and canned soft drinks Air transportation Tires and inner tubes _______________ Major household appliances Paints and allied products ___ Paper, paperboard, and pulp mills Railroad transportation - revenue traffic Glass containers Motor vehicles and equipment Petroleum refining Drug and proprietary stores Electric utilities Steel Sawmills and planing mills, general Plastic and paper bags [ C Primary aluminum Motors and generators c Coal mining Machine tools Hydraulic cement Ball and roller bearings Millwork Laundry and cleaning services -2 Source: Bureau of Labor Statistics -1 0 1 2 3 4 5 6 7 8 20 ILLS. pre>d!u©tnwity growtih lh®s trailed that ©f ©Shir ma|@r industrial ©®yntrn©s Between 1950 and 1981, real gross domestic product (g d p ) per employed person increased at substantially different rates among the six major industrial countries compared here. It grew about 1Vz percent per year in the United States and 2 percent per year in Canada and the United Kingdom, compared to 6 percent per year in Japan and 4 to 4Vz percent per year in France and Germany. Each country experienced a slower rate of growth in real g d p per employed person in the period 1973 to 1981 than in previous periods. The slowdown was greatest in the United States and Canada and least in France and Germany. Real gross domestic product per employed person (average annual percent change) United S tates......................................... Canada ................................................. France................................................... G e rm a n y............................................... Japan..................................................... United Kingdom .................................. 1950-81 1965-73 1973-81 1.6 1.9 4.1 4.5 6.3 2.2 1.6 2.4 4.6 4.3 8.2 3.2 0.2 .1 2.4 2.5 2.9 1.3 21 Chart 10. Trends in real gross domestic product per employed person, selected countries and years, 1950-81 1950 1955 Source: Bureau of Labor Statistics 1960 1965 1970 1975 1980 1985 Higher rates of change in real domestic product per employed per son may not signify higher levels from one country to another. The United States still has the highest level of real gross domestic product per employed person, even though the gap between the United States and the countries compared here has narrowed significantly since 1960. Japan gained the most over the period, yet its estimated level in 1981 was still comparatively low. After Germany, Canada comes closest to the United States, but its real product per employed civilian still remains 6 percent below that of the United States. 23 Chart 11. Relative levels in real gross domestic product per employed person, selected countries and years, 1960-81 1960 1965 Source: Bureau of Labor Statistics 1970 1975 1980 1985 24 Inn all major Industrial eoumtriss ©ompared, the productivity adwan©© In manufacturing outpaced th® United Stat@s Between 1950 and 1981, output per hour in manufacturing rose in all the major industrial countries shown here. But it grew at the slowest rate in the United States (2.6 percent a year), and at the most rapid rate in Japan (9.2 percent a year). It is noteworthy that the second highest rate, 5.3 percent annually for Ger many, was less than three-fifths of Japan’s. Country Manufacturing output per hour, 1950-81 (average annual percent change) United States .............................................................. Canada ......................................................................... France ......................................................................... G erm any....................................................................... Japan ........................................................................... United Kingdom .......................................................... 2.6 3.9 5.3 5.6 9.2 3.4 25 Chart 12. Output per employee hour in manufacturing, selected countries, 1950-81 Index, 1950 = 100 1950 Ratio scale 1955 Source: Bureau of Labor Statistics 1960 1965 1970 1975 1980 1985 1mall majj 26 ndustrial i countries compared, the prodliuetowsty adlwaoi©© slowed Dtra th@ 1 i? 0 9s m The slowdown in the rate of growth in output per hour in manufacturing was pervasive in the 1970’s, but affected the industrial countries compared here unevenly. Between 1950-73 and 1973-81, the average annual rate of growth drop ped by 37 percent in the United States, compared with a 28-percent decline for Japan, a 24-percent d e clin e fo r Germany, and a 13-percent decline for France. Despite a slowdown, Japan’s pro ductivity growth rate in the 1973-81 period, 6.8 percent a year, was higher than the 1950-73 and 1973-81 rates for any of the other countries shown. 27 Chart 13. O utput per employee hour in manufacturing, selected countries, 1950-73 and 1973-81 Average annual percent change DigitizedSource: for FRASER Bureau of Labor Statistics 28 International ©©mparisomi off produetlwity levels m the orem amid steel Industry International comparisons of manufacturing productivity by bls are limited to trends over time. Com parisons of absolute levels of pro ductivity have not been calculated because of the d ifficulties of developing adequate and com prehensive intercountry measures. However, b l s has calculated levels of productivity in the iron and steel in dustry in the major producing coun tries beginning with 1964. In 1964, productivity in the U.S. iron and steel industry greatly ex ceeded the levels reached in other major steel-producing countries. Output per hour in Germany was about 55 percent of the U.S. level; in Japan, France, and the United Kingdom, it was about 45-50 per cent. In 1980, British steel productivi ty was still about 50 percent of the U.S. level, but productivity in the French industry was up to about 90 percent, the German industry was about equal to, and the Japanese in dustry greatly exceeded the U.S. level. Output per hour (average annual rate of change)1 Country United S tates........................................ Japan..................................................... F rance................................................... G e rm a n y............................................... United Kingdom .................................. 1964-80 1964-73 1973-80 1.1 8.2 5.1 5.3 1.1 2.2 11.8 5.9 7.1 3.7 -0.3 3.8 4.1 2.9 -2.2 Based on midpoints of minimum and maximum estimates. 29 Chart 14. Levels of output per hour in the iron and steel industry, selected countries and years, 1964-80 Index, United States = 100 1964 1980 1964 Source: Bureau of Labor Statistics 1980 1964 1980 1964 1980 Part IB. CinaEfigss in prodyetiwity: P®l@ti®pshDp t© ©®sts, prices, and real income, and ymderiying factors In this part, productivity change is examined in relation to changes in costs, prices, real income, and em p loym en t. A lso, tre n d s in multifactor productivity and some factors underlying p ro ductivity change are portrayed. The first several charts demon strate the role of output per hour as a critical link between the cost of labor and the price of goods and services. Labor costs, which include rates of pay, overtime, and fringe benefits, represent the largest single cost ele ment for most industries. Hence, the trend in labor costs per unit of output plays a major role in determining price. If the effects of an increase in unit labor costs can be reduced by increased productivity, pressure to increase prices will lessen. Of course, increases in the cost of materials or fuels per unit may offset this effect. Increases in unit labor costs can result from, as well as cause, price increases. If employee purchasing power drops because of higher prices, pressure will develop for higher wages. Should wage in creases exceed productivity growth, unit labor costs will rise. The next set of charts indicates 31 that, adjusted for changes in con sumer prices, labor compensation has risen at about the same rate as output per hour in the business sec tor over the post-World War II period. It also shows that productivity in creases can be taken in the form of increased income or increased leisure. They have, in fact, largely been taken in the form of higher in come. The next set of charts examines the relationship between productivi ty and employment. The effects of productivity on employment depend upon the circumstances in which the productivity change occurs. In ex panding industries, increasing pro ductivity has been associated with rising employment; in contracting in dustries, productivity gains have been associated with declining em ployment. The last set of charts bears on some of the forces underlying pro ductivity change. The impact of these forces on productivity cannot always be directly measured. The charts show changes in capital for mation per employed person, and in research and development expendi tures—both key factors affecting productivity change over time. 32 TGd@tohawior of unit Bator ©@sts Is inversely r@lat@dl to changes DDD prodluetowity Productivity is an important deter minant of cost movements. This is demonstrated by the two top panels of the chart, which are almost mirror images of each other, showing that unit labor costs tend to rise when productivity growth slows, and to slow or decline when productivity growth accelerates. Hourly compensation rose more after the mid-1960’s than before. In addition, the rate of productivity im provement was slower. Hence, unit labor costs rose much more rapidly after the mid-1960’s. Between 1973 and 1981, the rate of productivity im provement was particularly slow, while hourly compensation ac celerated. Therefore, unit labor costs rose more steeply during this period than in the previous two periods shown in the table. Average annual percent change Period Output per hour Unit labor costs Compensation per hour 1947-81 ............................................... 2.6 3.4 6.1 1947-65 ...................................... 1965-73 ...................................... 1973-81 ...................................... 3.0 2.2 1.0 2.0 4.6 8.0 5.1 6.9 9.0 33 Chart 15. Output per hour of all persons, unit labor costs, and compensation per hour in the business economy, 1948-82 12 Unit labor costs ■/ \ k Ik 4 A A / vy ' y n - 4 ________________ i___________ i___________ i___________ i____________i___________ i___________ 12 i Compensation per hour . / \ x \ A I / S a . V .4 1948 Source: Bureau of Labor Statistics 1955 1960 1965 1970 1975 1980 1985 34 Changes in unit labor eosts are eioseiy associated with ohanges in prices Changes in unit labor costs generally are by far the most impor tant component of price changes, as the chart shows. Thus, if productivity growth mitigates increases in unit labor costs, this will in turn mitigate increases in prices. During periods such as the early 1960’s, unit labor costs rose little— mainly because productivity in creases kept pace with the growth of hourly compensation. Prices also reflected the small increases in unit labor costs. In the late 1960’s, however, hourly compensation in creased at a faster rate while produc tivity growth slowed, with the result that unit labor costs increased, and so did prices. This situ a tio n moderated somewhat in the early 1970’s, as the normal recovery pat tern of increased productivity and reduced unit labor costs asserted itself. However, beginning in 1973, unit labor costs started to climb again, pushing prices along with them as compensation increased at near record rates, and productivity growth slowed and even declined. This pattern persisted until 1981. Chart 16. Composition of price changes, business economy, 1948-82 Percent change Implicit price deflator 10 8 6 Unit nonlabor payments 4 2 0 -2 i A \ jA \ I a \f\^ X _ I ___ w 1948 N A \ i ^ W ^ /^ \\ ^ i_ _ _ _ _ _ _ i_ _ _ _ _ _ _ i_ _ _ _ _ _ _ i_ _ _ _ _ _ _ i_ _ _ _ _ _ _ i_ _ _ _ _ _ _ 1955 Source: Bureau of Labor Statistics W / 1960 1965 1970 1975 1980 1985 36 TGi® m@r® rapid the advance nm productivity, tBi® s0@w®r th® imereas® in unit lab®r ©©its and pri©@s The rate of productivity growth in a sector is generally reflected in the trends of costs and prices of the sec tor’s output. Unit labor costs and prices usually rise most in sectors where productivity is growing slowly, and least in sectors where produc tivity is growing rapidly. Between 1973 and 1981, produc tivity in the communications sector increased at an average annual rate of 5.3 percent. Although compensa tion per hour rose more in this than in any other nonfarm sector shown—9.7 percent a year—this high rate was in large part offset by the strong productivity advance, yielding relatively low unit labor cost changes. Price increases, therefore, remained comparatively low. The op posite pattern held for the mining sector, where a declining rate of pro ductivity provided no offset to high compensation rates. On the con trary, declining productivity con tributed to a steep rate of unit labor costs, and hence also to a high rate of price increase. 37 Chart 17. Output per hour of all persons, compensation per hour, unit labor costs, and prices in major sectors, 1973-81 Average annual percent change Output per hour Unit labor costs Farm. Communications I Electric, gas, and sanitary services I Transportation --------~" ■ __ __ Mining Manufacturing Trade Compensation per hour Prices Farm Communications I Electric, gas, and sanitary services I Transportation Mining Manufacturing Trade -5 10 Source: Bureau of Labor Statistics 15 -5 0 5 10 15 20 38 Changes °m hourly ©©mpensafiomi and ©hainigts Bun pr©dly©tiwity air© TOft ©l®s@!y related In contrast to prices, the factors influencing changes in compensa tion in individual industries appear to be independent of the factors in fluencing changes in productivity. This is shown by the high degree of uniformity in the bars in the chart in dicating compensation per hour, as compared with the bars indicating output per employee hour. Hourly compensation increased about as much between 1967 and 1980 in in dustries with a relatively low rate of p ro d u c tiv ity grow th, such as machine tools and bakery products, as in industries with a high rate of productivity growth, such as soft drinks and pharmaceuticals. 39 Chart 18. Output per employee hour and compensation per employee hour, selected industries, 1967-80 Average annual percent change Output per employee hour Compensation per hour Preserved fruits and vegetables Grain mill products Bakery products Bottled and canned soft drinks Nonwool yarn mills Office furniture Paper and plastic bags Corrugated and solid fiberboard boxes Pharmaceutical preparations Soaps and detergents Paints and allied products Tires and inner tubes Concrete products Steel foundries Copper rolling and drawing Hand and edge tools Machine tools Pumps and compressors Ball and roller bearings Electric lamps 0 1 2 3 4 5 6 7 8 Source: Bureau of Labor Statistics 9 0 1 2 3 4 5 6 7 8 9 40 Pro©®® generally ris® m©r® rapidly w b m prodyotSwity oin)©r@®s®s slowly A generally inverse relation prevails between price change and productivity change at the industry level. Between 1960 and 1980, prices tended to decline or to increase slowly in such industries as radio and tv sets, hosiery, and synthetic fibers, where productivity rose at above-average rates. In contrast, prices rose strongly in such in dustries as footwear, steel, and laun dry and cleaning services, where pro ductivity change over the period was comparatively low. 41 Chart 19. Output per employee hour and prices, selected industries, 1960-80 Average annual percent change Prices - 1 0 1 Source: Bureau of Labor Statistics 2 3 4 Output per employee hour 5 6 7 8 42 Unit lab®ir ©@sfis in manyfaeturong haw® aee®l®rat®d sin©® 1973 in most indystdiai ©®yntri®s9 as pr@dly©tiwitf adlwan©® sflowed In all countries shown, except Japan, unit labor costs rose sharply between 1973 and 1981. Currency revaluation accentuated unit labor cost increases for Germany and Japan; when expressed in U.S. dollars, these increases were higher than in the United States in all coun tries but Canada and Japan. Slower productivity advances in the 1973-81 period than earlier, com bined with pronounced increases in compensation per hour, underlay the acceleration in unit labor cost rates. All the countries shown experienced slowing productivity improvements after 1973 in manufacturing, but Japan and the United Kingdom were the most severely affected. Compen sation per hour during the 1973-81 span rose at higher rates than earlier in the United States, Canada, France, and the United Kingdom —but at slower rates in Germany and Japan. The rate of increase was smallest for Germany, and only slightly higher for the United States. 43 Chart 20. Output per employee hour, compensation per hour, and unit labor costs in manufacturing, selected countries, 1973-81 Average annual percent change Output per hour United States _ _ ___ I___________ 1____I____ ■ Canada _........ —........ _ Compensation per hour i i Unit labor costs - National currency Unit labor costs - U.S. dollars .... ..... ........ .................................. - France Germany _______________________________ Japan United Kingdom Source: Bureau of Labor Statistics 44 Besi hourly ©@mp(irssatS®in has adwamjtgtd m Din© with pr©du©fin¥ifiy Labor has shared in the gains from productivity over the long run. Hourly compensation adjusted for changes in purchasing power—real hourly compensation—has risen at about the same rate as output per hour. In 1981, real hourly compensation stood almost twice as high as in 1947. However, as the table and chart show, the rate of real hourly compensation slowed down from 1965 on, as did output per hour. Average annual percent change Period Output per hour of all persons Real compensation per hour 1947-81 ............................................... 1947-65 ...................................... 2.6 3.0 2.5 3.3 1965-81 ...................................... 1965-73 .............................. 1973-81 .............................. 1.6 2.2 1.0 1.2 2.3 .1 45 Chart 21. Output per hour of all persons and real compensation per hour in the business economy, 1950-82 Index, 1950 = 100 Source: Bureau of Labor Statistics Ratio scale 46 Dmmamy industries, ®mpl®ym®in)t Dim©r@as<is with rising productivity Increases in productivity are often believed to be associated with decreases in employment. The chart shows this is not necessarily so. In all industries for which b l s has calculated productivity measures, productivity has risen, except for coal mining and class I bus carriers. Yet employment grew in two-thirds of the industries shown here over a 21-year timespan. At times, large productivity ad vances are accompanied by com paratively large employment in creases, as for example, in air transportation. In a few industries, employment gains exceed produc tivity improvement, as in eating and drinking places. Reductions in employment are in all instances associated with productivity growth, either because of strong techno logical progress (petroleum pipe lines) or modest output increases (railroad transportation). 47 Chart 22. Output per employee hour and employment, selected industries, 1960-81 Average annual percent change Employment r Eating anc drinking p aceso" o Commercial banking Hotels, motels, and tourist courts 0 Pumps and ^ compressors'' Q Coal mining Hand and © edge tools" " Nonwool yarn mills Reta I food storesO Copper mining, „ recoverable metal Franchised new . . car dealers q . lc preparations Electric utilities „ Gas and electric utilities Motor vehic|es equipment O & O Synthetic © Q fibers Metal cans Machine tools 'sL/ oPharm afeu Construction machinery and equipment Paper, paperboard ~ and pulp mills Class I bus carr ie r s Copper rolling and drawing \ O Gasoline service stations r Major household appliances q steel Jp Sawmills and p la n in g ^ X mills, general _ . ,, . Total tobacco ® Iron mining, usable ore n Petroleum refining ° n Radio and television receiving sets Primary copper, lead, and zinc 0 Railroad transportation revenue traffic „ Laundry and u cleaning services ^ ° Footw ear© Structural clay products O Hosiery _____ I_____ I_____ I_____ I_____ I_____ I_____ I_____ -1 0 1 Source: Bureau of Labor Statistics 2 3 4 Output per employee hour 5 6 7 8 48 Similar rates ®f ©hang® odd industry produetiwity ©ftesu rsffleet differing rates ©f ©hamge in ©ntpyt and employment The same or nearly the same trend in the labor productivity of different industries is frequently associated with differing trends in output and employee hours. The chart shows three industries with similar productivity rates for the 1960-81 period. All three averaged annual rates of productivity advance of just below 2 percent. Despite this sim ila rity in labor productivity growth, trends in employment varied widely—rising strongly in primary aluminum, declining in sawmills and planing mills, and remaining un changed in cigarette manufacturing. The relation between labor produc tivity growth and employment trends is basically determined by the climate in which output growth in a given industry occurs. Rapid output growth—as in primary aluminum —was accompanied by comparative ly large increases in employment. Weak gains in output, as shown here by sawmills and planing mills, were a s s o c ia te d w ith e m p loym en t declines. Where output rose at a relatively moderate rate, as in cigarette manufacturing, virtually no change in employment resulted. 49 Chart 23. Output and employment in selected industries with similar productivity growth, 1960-81 Primary aluminum Source: Bureau of Labor Statistics Cigarettes Sawmills and planing mills 50 Prodyetiwity advance has r@sylt@dl m higher incomes asud ©©misympftoGi, rather than additi©nal leisyr® One of the benefits of productivity improvement is that it makes an in creasing amount of goods and services available for consumption. This is shown by the steady increase in gross domestic product per per son throughout the 1947-81 period. (Employment rose relative to popula tion from the mid-1960’s onward; since then, the growth in domestic product per capita has exceeded the growth in productivity.) Some of the advance in productivi ty may be taken in the form of leisure (fewer hours worked). In addition to shorter weekly hours, earlier retire ment or later entry into the labor force may be options which are preferred over goods and services. Had all the productivity gains of the past 34 years been allocated to in creasing product per capita, its growth rate would have been 2.5 per cent annually over the 1947-81 period, rather than 2.1 percent. In contrast, had the productivity gains all been taken in the form of more leisure, average weekly hours would have decreased at an annual rate of 2.6 percent, instead of 0.4 percent. Clearly, increased income and, with it, increased consumption had greater appeal than increased leisure. Average annual percent of change Period Gross domestic product per capita Average weekly hours ............................................... 2.1 -0.4 1947-65 ...................................... 1965-73 ...................................... 1973-81 ...................................... 1.8 2.3 1.8 -.4 -.7 -.5 1947-81 51 Chart 24. Gross domestic product per capita and average weekly hours per person engaged in production in the business economy, 1947-81 1947 1950 1955 1960 1965 1970 1975 Source: Bureau of Economic Analysis and Bureau of the Census, U.S. Department of Commerce; Bureau of Labor Statistics 1980 1985 52 Th® ®ff®eS ©gh productivity ©f shifts im ®mpl®ym®oit b®tw®®n s®et@rs has b@@rB minor Productivity movements in ag gregates such as the business and the nonfarm business sectors reflect shifts in the relative importance of their component sectors, as well as changes within them. For example, productivity might increase in the business sector without increasing in any of its component sectors because of employment shifts from low to high productivity sectors. Chart 2 showed that productivity grew faster in the total business than in the nonfarm business sector between 1947 and 1982. The dif ference reflected both the greater in crease in farm productivity, and the shift of workers out of the farm sec tor, where the level of productivity was relatively low, into higher pro ductivity jobs in the nonfarm sector. The chart opposite shows the trend of labor productivity in the business sector before and after adjusting it to exclude the productivity gain associated with the farm/nonfarm employment shift. In recent years, the gap between the farm and nonfarm levels of labor Period Output per hour in the business sector productivity has narrowed, and the magnitude of the employment shift has lessened. Consequently, the fraction of productivity change in the business sector (which includes farming) attributable to this shift has declined. There has also been considerable change in the distribution of hours of labor input within the various non farm sectors. Nevertheless, because the differences in productivity levels are smaller between these sectors than between the farm and the non farm sectors, these shifts have had little effect on total productivity growth. Since 1947, the effect of shifts among nonfarm sectors has contributed little more than 0.1 percentage point to the overall pro ductivity growth rate. While the shift to the service sector is widely believ ed to have contributed to the produc tivity slowdown, the relative impor tance of the shift has been quite small, although it has become somewhat more pronounced in re cent years. Attributed to— Productivity effect Shift effect Shift effect as a percent of total productivity change Average annual percent change1 1947-81 .................................. 2.4 2.2 0.2 12 1947-65 .......................... 1965-73 .......................... 1973-81 .......................... 3.3 2.4 .7 2.9 2.2 .7 .4 .2 .1 12 8 11 1Average annual rates shown are arithmetic averages of annual percent changes and may differ from rates shown elsewhere in this chartbook. ) 53 Chart 25. Output per hour of all persons in the business economy, adjusted for shifts in employment from the farm to the nonfarm business economy, 1947-82 1947 1950 1955 Source: Bureau of Labor Statistics 1960 1965 1970 1975 1980 1985 54 U.S. capital f®irmati©n p@ir ©mptoysd person has trailed Canada and Japan in reoent years Ihternational comparisons of the amount of real resources countries are devoting to increasing their capital stocks, and thereby to im proving labor productivity, are dif ficult to make. The comparative measures of real capital investment depicted in this chart are based on benchmark estimates—for 1970 and 1973, from a United Nations study that covered Japan and the Euro pean countries, and for 1965, from a Canadian study. These estimates were extrapolated to the other years shown on the basis of relative trends in real capital investment as measured for each country. These comparative estimates should be considered as approximations; they are not precise measures. For the 1960-81 period as a whole, the United States had a higher average level of real capital forma tion (average annual gross additions to nonresidential capital stock) per employed person than any of the other countries shown, except Canada. During the period 1974-81, only Canada’s and Japan’s levels of capital formation per employed per son ran ahead of the United States. Since these estimates of com parative real capital formation relate to the total economy, they reflect dif ferences in industrial structure as well as differences in industryspecific investment levels. For exam ple, Canada has a much larger share of its investment in such capitalintensive activities as waterworks and the production of electricity, gas, and steam than do the other countries. 55 Chart 26. Gross nonresidential capital formation per employed person, selected countries, 1960-81 and 1974-81 Averages for periods Index, United States = 100 Source: Irving Kravis et al., A System for International Comparisons of Real Product and Purchasing Power, and Bureau of Labor Statistics 56 U=Snresearch and dewetopment expenditures declined somewhat in relation to the gross national produet Expenditures for research and development (r &d ) can generate in creases in productivity through the development and subsequent ap plication of more efficient equip ment and processes. One indicator of the relative importance of r &d is the proportion of gross national product devoted to it. This proportion reached a peak in the midsixties. It slowly declined in the early 1970’s, but has increased again since 1977. 57 Chart 27. Expenditures for research and development as a percent of gross national product, selected years, 1961-82 Percent 3 .0 ----- 1961 1965 1970 1975 Source: National Science Foundation and U.S. Department of Commerce, Bureau of Economic Analysis 1977 1981 1982 58 As a pere®fi)t ©f gross national prodyet, U.S. R&D @xp®ndltyr@s generally have run ahead ®f ©ther ma|©r indystrial ©©yrstries S ta tis tic s on research and development activity are not as readily available for other countries as they are for the United States. Nevertheless, sufficient information exists to make some comparisons possible between the United States and its major trading partners. r &d expenditures as a proportion of g n p were higher in the United States than in the four other in dustrial countries compared until 1975, when the rate of expenditure in Germany caught up with the U.S. rate. The latest available data in dicate that the proportion of g n p devoted to r &d ranged from 2.7 per cent in Germany to 1.9 percent in France. More than half of U.S. r &d funds are provided by the Government and more than half of these expenditures are for defense and space objec tives. When r &d expenditures for na tional defense and space are exclud ed from the comparisons, Japan and Germany show the highest ratios of r &d expenditures to output. 59 Chart 28. Expenditures for research and development as a percent of gross national product, selected countries, 1961-82 1961 1965 Source: National Science Foundation 1970 1975 1980 1985 Appendix. Supporting data for charts 61 Table 1. Output per hour of all persons in the business economy,1 1909-82 (Index, 1909 = 100) Year Output per hour Year Output per hour 1909 .................................. 1 9 1 0 .................................. 1911 .................................. 1 9 1 2 .................................. 1 9 1 3 .................................. 1 9 1 4 .................................. 100.0 105.5 100.7 103.4 103.4 100.0 1946 1947.............................. 1948 1949 196.4 195.3 205.8 208.8 1 9 1 5 .................................. 1 9 1 6 .................................. 1 9 1 7 .................................. 1 9 1 8 .................................. 1 9 1 9 .................................. 99.8 100.9 97.8 103.5 107.6 1950 . 1951................................ 1952 1953 1954 225.3 231.5 239.0 246 7 250.6 1920 ................................ 1921 .................................. 1922 .................................. 1923 .................................. 1924 ................................ 104.0 104.6 114.4 119.9 122.0 1955 1956................................ 1957 1958 1959 260.6 263.3 269 9 278.2 287.1 1925 1926 1927 1928 1929 .................................. .................................. .................................. .................................. .................................. 128.1 131.5 131.9 131.3 137.8 1960 1961................................ 1962 1963 1964 291.3 300.9 312 4 324.1 338.0 1930 1931 1932 1933 1934 .................................. .................................. .................................. .................................. .................................. 131.6 131.0 124.0 121.9 134.9 1965 1966................................ 1967 1968 1969 349.9 360.8 368.9 381.2 382.0 1935 1936 1937 1938 1939 .................................. .................................. .................................. .................................. .................................. 141.1 149.5 149.8 153.4 159.8 1970 1971................................ 1972 1973 1974 385.1 398.8 412.9 423.4 413 3 1940 1941 1942 1943 1944 .................................. .................................. .................................. .................................. .................................. 166.3 176.8 178.6 182.9 195.0 1975 1976................................ 1977 1978 1979 422 4 436.3 446 9 449.5 445 2 1945 .................................. 203.2 1980 1981................................ 1982 441 9 449.8 451.5 Total.private economy until 1946. 62 Table 2. Output per hour of all persons in the total business and nonfarm business economies, 1947-82 (Index, 1947 = 100) Output per hour Year Business Nonfarm business 100.0 105.5 107.7 100.0 104.5 107.2 115.7 119.1 123.1 127.2 129.9 113.3 115.6 118.6 120.8 123.2 1955 1956 1957 1958 1959 134.8 136.4 140.2 144.9 149.4 127.7 128.3 130.9 134.5 138.8 1960 1961 1962 1963 1964 151.7 156.9 162.8 168.7 175.6 140.2 144.5 149.7 154.4 160.3 1965 1966 1967 1968 1969 181.7 187.2 191.2 197.3 198.3 165.2 169.3 172.3 177.7 177.8 1970 1971 1972 1973 1974 200.3 207.4 214.4 219.7 215.9 178.8 184.8 191.3 195.9 192.4 1975 1976 1977 1978 1979 220.9 227.6 233.0 234.6 233.1 196.5 202.3 206.8 208.3 206.4 1980 1981 1982 232.5 236.3 237.3 205.6 208.4 208.8 1947 1948 1949 1950 1951 1952 1953 1954 . . . . . 63 Table 3. Output per hour of all persons, output per unit of capital, and multifactor productivity, private business sector, 1948-81 (Index, 1948 = 100) Year Output per hour of all persons Output per unit of capital Multifactor productivity 1948 ..................................................... 1949 ...................................................... 100.0 101.6 100.0 94.4 100.0 98.9 1950 1951 1952 1953 1954 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... 109.9 113.1 116.9 120.8 122.8 99.6 101.0 100.2 101.5 97.1 105.9 108.4 110.4 113.3 112.8 1955 1956 1957 1958 1959 ...................................................... ..................................................... ..................................................... : ................................................... ...................................................... 127.8 129.2 132.5 136.7 141.2 10.1.8 100.8 98.7 95.1 100.1 117.8 118.2 119.2 120.0 124.8 1960 1961 1962 1963 1964 ..................................................... ...................................................... ..................................................... ..................................................... ...................................................... 143.2 148.1 153.8 159.7 166.5 99.3 98.8 102.0 103.4 106.1 125.6 128.0 132.7 136.5 141.4 1965 1966 1967 1968 1969 ..................................................... ..................................................... ...................................................... ...................................................... ..................................................... 172.5 177.7 181.8 188.1 188.5 108.7 108.9 105.7 106.3 104.5 145.9 148.7 149.2 152.7 152.0 1970 1971 1972 1973 1974 ...................................................... ...................................................... ..................................................... ...................................................... ...................................................... 190.3 197.2 204.1 209.3 204.3 99.4 98.9 101.8 103.8 97.3 150.2 153.5 158.6 162.3 156.2 1975 1976 1977 1978 1979 ...................................................... ..................................................... ...................................................... ...................................................... ..................................................... 208.8 215.8 221.0 222.2 220.0 92.7 96.9 100.8 102.6 101.2 155.8 161.7 166.5 168.2 166.3 218.3 222.3 96.1 95.8 162.5 164.3 1980 ..................................................... 1981 ..................................................... 64 Table 4. Output per hour of all persons, capital effects, and multifactor productivity, 1948-73 and 1973-81 (Average annual rate of change, in percent) Total private business sector1 Productivity Year Output per hour of all persons Output per unit of capital Inputs Multi factor produc tivity1 2 Output3 Hours of all persons4 Capital5 Combined units of labor and capital inputs6 Capital per hour of all persons 1948-81 ..................... 2.4 -0.1 1.5 3.3 0.9 3.5 1.8 2.6 1948-73 ............. 1973-81 ............. 3.0 .8 .2 -1.0 2.0 .1 3.7 2.2 .7 1.4 3.6 3.2 1.7 2.0 2.8 1.8 Private nonfarm business sector1 1948-81 ..................... 2.0 -0.1 1.3 3.4 1.4 3.6 2.1 2.2 1948-73 ............. 1973-81 ............. 2.5 .6 .2 -1.1 1.7 .0 3.9 2.1 1.3 1.5 3.6 3.3 2.1 2.1 2.3 1.7 Manufacturing sector 1948-81 ..................... 2.6 -0.2 1.8 3.3 0.7 3.6 1.6 2.8 1948-73 ............. 1973-81 ............. 2.9 1.5 .6 -2.6- 2.2 .4 4.0 1.2 1.1 -.2 3.5 4.0 1.8 .9 2.4 4.2 1The private business sector includes all of the gross na tional product except the rest-of-world sector, the rental value of owner-occupied real estate, the output arising in nonprofit organizations, the output of paid employees of private households, government, and the statistical discrepancy in preparing the National Income Accounts. The private nonfarm business sector also excludes farms, but includes agricultural services. 2 Output per unit of combined labor and capital inputs. 3 Gross domestic product originating in the sector, in cons tant dollars. 4 Paid hours of all employees, plus the hours of proprietors and unpaid family workers engaged in the sector. 5A measure of the flow of capital services used in the sec tor. 6 Hours of all persons combined with capital input, using labor and capital shares of output as weights. 65 Table 5. Output per hour of all persons by major sector, 1947-81 (Index, 1947 = 100) Year Farm Mining Manufac turing Transpor tation Communi cations Electric, gas, and sanitary services Trade 1947 ....................... 1948 ....................... 1949 ....................... 100.0 110.8 109.7 100.0 103.8 104.8 100.0 106.2 110.3 100.0 97.3 94.5 100.0 101.9 109.1 100.0 107.5 116.3 100.0 99.9 101.8 1950 1951 1952 1953 1954 ....................... ....................... ....................... ........................ ....................... 125.1 125.6 135.3 153.9 162.1 116.2 122.0 123.7 130.2 137.9 116.2 120.2 122.4 124.4 126.2 101.1 104.7 102.9 101.8 103.0 116.7 123.5 126.6 133.1 136.3 112.3 138.8 147.6 155.7 170.6 111.2 109.8 112.6 114.7 114.9 1955 1956 1957 1958 1959 ....................... ....................... ....................... ....................... ........................ 164.3 170.2 180.0 202.7 191.6 145.9 147.9 149.0 154.6 159.2 132.4 131.3 133.8 133.2 139.5 108.8 111.6 112.1 113.5 115.9 145.5 145.5 154.5 169.9 184.5 178.8 188.2 197.8 207.0 225.1 122.2 122.6 125.0 126.4 130.9 1960 1961 1962 1963 1964 ........................ ........................ ........................ ....................... ........................ 209.9 220.6 226.5 244.0 251.8 166.1 175.9 184.9 197.4 203.8 140.4 144.1 150.4 161.2 169.1 118.8 121.8 126.0 133.2 135.2 193.1 205.8 219.6 235.1 242.7 240.3 254.3 266.8 276.8 294.7 130.8 133.3 140.7 146.5 151.1 1965 1966 1967 1968 1969 ........................ ........................ ........................ ........................ ........................ 267.9 279.2 304.4 305.0 327.4 212.0 223.8 234.0 246.8 249.8 174.3 176.7 176.6 182.9 186.1 143.7 152.3 150.0 160.9 161.1 251.5 262.0 276.9 293.5 301.1 300.9 319.6 326.7 353.0 363.3 156.6 163.4 168.2 175.6 173.8 1970 1971 1972 1973 1974 ....................... ........................ ........................ ....................... ........................ 366.2 399.2 386.4 391.1 394.4 260.6 260.8 359.4 256.4 239.0 185.7 197.1 206.9 217.9 212.8 159.3 160.7 170.4 177.7 180.1 312.1 335.0 349.6 363.9 370.5 362.8 393.7 397.4 403.6 383.1 175.3 181.0 190.8 196.9 192.4 1975 1976 1977 1978 1979 ........................ ........................ ........................ ........................ ........................ 433.7 433.3 454.2 439.9 473.2 217.9 207.5 201.0 197.5 184.1 219.0 228.7 234.4 236.5 238.0 178.6 183.9 187.4 192.1 188.3 419.9 454.2 470.4 490.7 498.3 423.0 423.6 429.5 422.4 418.7 194.9 199.9 203.3 207.9 208.8 1980 ........................ 1981 ........................ 488.2 554.8 175.5 163.6 238.5 245.1 179.8 177.1 524.4 547.4 414.5 398.4 203.7 208.7 Table 6. Output per employee year, output, and employee years in the Federal Government, measured sample, fiscal years 1967=81 (Index, 1967 = 100) Output per employee year Output Employee years 1967 .. 1968 .. 1969 . . 100.0 101.2 103.6 100.0 103.7 107.1 100.0 102.6 103.4 1970 1971 1972 1973 1974 .. .. .. .. .. 104.0 105.8 106.4 109.4 108.9 107.4 108.8 109.0 110.8 111.0 103.2 102.9 102.5 101.3 102.0 1975 1976 1977 1978 1979 .. .. .. .. .. 110.4 112.3 115.6 117.7 118.6 112.8 113.8 115.7 118.5 119.7 102.2 101.2 100.1 100.7 100.9 1980 .. 1981 .. 121.2 124.2 123.3 125.1 101.7 100.8 Fiscal year Table 7. Output per employee year by functional grouping, Federal Government, fiscal years 1967-81 (Average annual percent change) Functional grouping Total Audit of operations.................................... Buildings and grounds maintenance . . . . Communications1....................................... Education and training2 ............................ Electric power production and distribution Output per employee year 1.5 1.8 3.3 11.6 2.0 -.3 Equipment maintenance2. Finance and accounting . . General support services . Information s e rv ic e s ........ Legal and judicial activities .7 2.5 4.0 .5 -.4 Library se rv ic e s .................................. Loans and g ra n ts ................................ Medical s e rv ic e s ................................ Military base services ....................... Natural resources and environmental m anagem ent.................................. 5.2 4.2 .1 .1 Personnel investigations Personnel m anagement. Postal service ............... Printing and duplication . P ro cu re m e n t................. 3.8 1.6 1.3 -.8 3.0 Records m anagem ent.............................. Regulation-compliance and enforcement Regulation-rulemaking and licensing . . . . Social services and benefits ................... Specialized manufacturing ..................... 3.5 Supply and inventory control Traffic management3 ........... Transportation..................... 1.6 3.1 2.9 Fiscal years 1973-81. Fiscal years 1968-81. 1.0 2.1 2.3 2.4 3.0 Fiscal years 1972-81. 67 Table 8. Output per employee hour in selected industries, 1960-81 Average annual percent change Industry Average annual percent change Synthetic fib e rs .................................... H osiery................................................. Malt beverages.................................... Telephone com m unications............... Air tra nspo rtatio n................................ 6.9 6.9 6.9 5.7 5.7 Household furniture1 ................................ Nonmetallic minerals, except fu e ls ......... Primary copper, lead, and zinc ............... Gas utilities ............................................... Hydraulic cement .................................... 2.3 2.3 2.3 2.3 2.2 Petroleum p ip e lin e s ............................ Aluminum rolling and drawing ........... Radio and television receiving sets1 . . Fluid milk ............................................. Pharmaceutical preparations1 2 ........... 5.7 4.8 4.7 4.6 4.4 Hotels, motels, and tourist c o u r ts ........... Gray iron foundries .................................. Intercity tru c k in g ....................................... Pumps and compressors1 ....................... Bakery products......................................... 2.1 2.1 2.0 2.0 2.0 Major household appliances ............. Electric u tilitie s .................................... Railroad transportation-revenue traffic Corrugated and solid fiberboard boxes Drug and proprietary s to re s ............... 4.3 4.2 4.2 4.1 4.1 Construction machinery and equipment . Folding paperboard boxes5 ..................... Ball and roller b e a rin g s ............................ Nonwool yarn m ills .................................... Franchised new car dealers ................... 2.0 1.9 1.9 1.9 1.9 Candy and confectionery products3 . . Petroleum refining1............... ........... Gasoline service s ta tio n s ................... Cosmetics and other toiletries1........... Paper, paperboard, and pulp mills . . . 4.1 4.0 3.9 3.8 3.7 Copper rolling and drawing ..................... S teel............................................................ Sawmills and planing mills, g e n e ra l........ Total to b a c c o ............................................. Motors and generators ............................ 1.9 1.9 1.8 1.8 1.7 Veneer and plywood1 .......................... Gas and electric u tilitie s ..................... Grain mill products2 ............................ Bottled and canned soft d rin k s ............. Preserved fruits and vegetables1 . . . . 3.6 3.6 3.1 3.0 3.0 Office furniture1 ......................................... Primary a lu m in u m .................................... Electric la m p s ........................................... Copper mining, recoverable m e ta l........... Commercial banking6................................ 1.7 1.6 1.6 1.3 1.3 Motor vehicles and equipm e nt............. Soaps and detergents1 ......................... Structural clay p ro d u c ts....................... Sugar ..................................................... Farm and garden machinery1 ............... 2.9 2.8 2.8 2.8 2.8 Hand and edge tools1................................ Ready-mixed concrete1 ............................ Millwork1 .................................................... Retail food s to re s ....................................... Fabricated structural m e ta l...................... 1.2 1.2 1.2 .9 .9 Concrete products1 .............................. Tires and innertubes ............................ Paper and plastic bags1 ....................... Paints and allied products ................... Iron mining, usable o r e .......................... 2.7 2.7 2.6 2.5 2.5 Steel foundries........................................... Laundry and cleaning services ............... Machine tools ........................................... Farm machinery7 ....................................... Eating and drinking p la ce s........................ .9 .7 .6 .6 .4 Transformers2........................................ Lighting fixtures4.................................... Metal c a n s ............................................. Glass containers.................................... 2.5 2.4 2.4 2.4 F o o tw e a r.................................................... Coal mining ............................................... Class I bus carriers1 .................................. .3 -.2 -.3 Industry 1 1960-80. 2 1963-80. 3 1960-78. 4 1961-80. 5 1963-81. 6 1967-80. 7 1972-80. 68 Table 9. Productivity rates before and after 1973: Change from 1947-73 to 1973-81, selected industries Advance or falloff from 1947-73 to 1973-81 Industry 1947-73 1973-81 Telephone communications1 Synthetic fibers ................. Malt beverages ................. Fluid m i l k ........................................... Radio and television recieving sets2 ............................................... 6.4 5.8 5.2 4.0 6.7 6.4 6.0 5.1 0.4 .5 .8 1.1 4.9 5.0 .1 Bottled and canned soft drin ks......... Hosiery ................... Grain mill products3 .......................... Office furniture2 Metal cans 1.8 5.6 3.4 2.0 2.3 4.9 4.3 4.0 3.8 3.8 3.1 -1.2 .6 1.8 1.5 Air transportation ............................ Pharmaceutical preparations3 . Corrugated and solid fiber board boxes4 ........................................... Primary copper, lead, and z in c ......... Gasoline service stations4 7.5 5.4 3.6 3.3 -3.9 -2.1 3.7 2.3 3.8 3.3 3.2 3.1 -.4 .9 -.6 4.0 2.9 -1.1 1.8 5.5 3.7 2.7 2.8 2.7 2.7 2.6 1.0 -2.7 -.9 .0 4.0 2.6 -1.4 Candy and confectionery6 ............... 5.0 1.7 2.0 3.6 2.4 2.3 2.3 2.2 -2.5 .6 .3 -1.4 Copper rolling and drawing ............. Nonwool yarn mills4 .......................... Motor vehicles and equipment7 . . . . Sugar .. . Total to b a c c o .................................... 3.1 2.4 3.7 4.1 3.2 2.2 1.9 1.9 1.8 1.7 -1.0 -.5 -1.9 -2.2 -1.4 Veneer and plywood2 Preserved fruits and vegetables. . . . Iron mining usable ore8 Petroleum refining Hotels, motels, and tourist courts4 ........ 4.9 2.9 4.0 5.7 1.7 1.6 1.5 1.2 -3.2 -1.3 -2.4 -4.5 2.4 1.1 -1.3 Drug and proprietary stores4 Aluminum rolling and drawing4......... 5.2 5.6 1.1 1.0 -4.1 -4.6 Tires and innertubes Copper mining, recoverable metal ................. Major household appliances Transformers3 .................................. Paints and allied products4 Paper, paperboard, and pulp m ills ............................................... Railroad transportationGlass containers 1 1951-73 2 1958-73 3 1963-73 4 1958-73 5 1954-73 6 1954-73 7 1957-73 as as as as as as as well well well well well well well ........ as as as as as as as 1973-81. 1973-80. 1973-80. 1973-81. 1973-81. 1973-78. 1973-81. Advance or falloff from 1947-73 to 1973-81 Industry 1947-73 1973-81 Pumps and compressors2............... Electric utilities4 .............................. Soaps and detergents2 ................... Lighting fixtures9.............................. Household furniture2........................ 2.4 6.4 2.9 3.0 2.5 1.0 .9 .8 .8 .8 -1.5 -5.5 -2.1 -2.2 -1.7 S te e l................................................. Nonmetallic minerals, except fuels4............................................. Commercial banking10 ................... Structural clay products4 ............... Franchised new car dealers4 ........ 1.8 .8 -1.0 3.4 2.1 3.4 2.6 .7 .7 .7 .6 -2.6 -1.3 -2.7 -2.0 Farm and garden machinery2 ......... Intercity trucking5 ............................ Hand and edge tools2 ..................... Sawmills and planing mills, general4 ...................................... Concrete products11....................... 2.5 2.7 2.0 .5 .5 .5 -2.0 -2.2 -1.5 3.1 3.3 .4 .4 -2.6 -2.9 Gas and electric u tilitie s ................. Bakery p ro d u c ts .............................. Footwear ......................................... Folding paperboard boxes12........... Construction machinery and equipment4 .................................. 6.7 2.4 1.3 2.0 .4 .3 .1 .1 -6.3 -2.1 -1.2 -1.9 2.1 .1 -2.0 Paper and plastic bags13................. Cosmetics and other toiletries2....................................... Gray iron fou ndrie s.......................... Primary aluminum ......................... Motors and ge nerators................... 2.7 -.1 -2.8 4.7 2.3 4.4 4.1 -.1 -.2 -.3 -.4 -4.8 -2.5 -4.7 -4.4 Gas u tilitie s ...................................... Class I bus carriers13........................ Fabricated structural m e ta l4 ........ Retail food stores4 .......................... Ready-mixed concrete2 ................. 4.8 1.1 2.3 2.8 2.0 -.4 -.4 -.4 -.6 -.7 -5.2 -1.6 -2.8 -3.4 -2.7 Coal mining8 .................................... Petroleum pipelines4........................ Machine tools4 ................................ Hydraulic ce m e n t............................ Ball and roller bearings4 ................. 3.7 9.4 1.5 4.5 3.5 -.7 -.7 -.7 -.7 -.9 -4.4 -10.1 -2.2 -5.2 -4.4 Millwork2 ........................................... Eating and drinking places4 ........... Steel foundires5 .............................. Laundry and cleaning services4 . . . 2.5 1.4 1.4 1.7 -1.0 -1.3 -1.6 -1.6 -3.5 -2.3 -3.0 -3.3 8 1955-73 9 1961-73 10 1967-73 11 1947-73 12 1963-73 13 1954-73 as as as as as as well well well well well well as as as as as as 1973-81. 1973-80. 1973-80. 1973-80. 1973-81. 1973-80. 69 Table 10. Trend in real gross domestic product per employed person, selected countries and years, 1950-81 (Index, 1950 = 100) Year United States Canada France Germany Japan United Kingdom 1950 ............................ 1955 ............................ 1960 ............................ 100.0 114.0 122.0 100.0 118.5 129.8 100.0 122.2 154.9 100.0 137.3 184.1 100.0 137.6 187.7 100.0 111.4 123.2 1965 1966 1967 1968 1969 ............................ ............................ ............................ ............................ ............................ 142.2 146.5 146.9 150.5 151.1 149.4 151.0 151.9 157.5 160.8 201.0 209.4 218.6 226.2 238.4 227.7 243.2 241.1 256.3 272.2 284.2 307.7 334.0 369.7 411.0 138.3 140.8 146.0 152.9 155.0 1970 ............................ 1 9 7 1 ............................ 1972 ............................ 1973 ............................ 1974 ............................ 149.9 154.2 158.2 161.6 157.5 163.3 170.8 175.7 180.1 179.1 251.1 263.5 277.6 288.9 295.9 284.9 293.3 305.0 319.2 327.0 446.1 463.6 503.3 533.8 530.3 159.2 166.4 169.0 178.2 176.0 1975 1976 1977 1978 1979 ............................ ............................ ............................ ............................ ............................ 157.9 160.7 163.7 164.6 164.0 178.1 184.6 185.7 186.9 185.5 299.4 312.8 319.8 330.8 341.7 332.1 352.5 363.9 372.9 384.1 544.6 568.1 590.0 612.3 635.7 175.6 183.2 184.6 190.2 192.3 1980 ............................ 1 9 8 1 ............................ 162.6 164.1 180.4 181.1 345.1 348.1 387.5 389.7 656.6 670.7 193.3 198.2 Table 11. Relative levels in gross domestic product per employed person,1 selected countries and years, 1960-81 (Index, United States = 100) Year Canada Japan France Germany Italy United Kingdom 1960 ............................ 89.8 26.9 55.8 59.7 38.5 53.7 1965 1966 1967 1968 1969 ............................ ............................ ............................ ............................ ............................ 88.8 87.1 87.3 88.4 89.9 35.0 36.8 39.8 43.0 47.6 62.1 62.9 65.4 66.0 69.4 63.4 65.7 65.0 67.4 71.3 44.6 46.9 49.5 51.7 55.1 51.8 51.2 52.9 54.1 54.6 1 ^ 7 0 ............................ 1 9 7 1 ............................ 1972 ............................ 1973 ............................ 1974 ............................ 92.0 93.6 93.8 94.2 96.1 52.1 52.6 55.7 57.8 58.9 73.6 75.1 77.1 78.6 82.6 75.2 75.3 76.3 78.2 82.2 58.4 57.8 59.3 61.6 64.6 56.5 57.4 56.9 58.7 59.5 1975 1976 1977 1978 1979 ............................ ............................ ............................ ............................ ............................ 95.3 97.0 95.8 95.9 95.5 60.4 61.8 63.1 65.1 67.8 83.4 85.5 85.9 88.3 91.6 83.3 86.8 88.0 89.7 92.7 61.7 63.7 63.5 64.6 67.2 59.2 60.7 60.1 61.5 62.4 1980 ............................ 19812 .......................... 93.7 93.3 70.7 71.5 93.3 93.2 94.3 94.0 69.4 68.4 63.3 64.3 Output based on international price weights. 2 Data are based on preliminary estimates. Table 12. Output per employee hour in manufacturing, selected countries, 1950-81 (Index, 1950 = 100) Year United States Canada France Germany 1950 ............................ 1 9 5 1 ............................ 1952 ............................ 1953 ............................ 1954 ............................ 100.0 103.4 105.3 107.1 108.7 100.0 104.1 106.9 110.6 115.4 100.0 105.2 108.7 114.4 117.8 100.0 103.0 112.8 120.8 125.8 100.0 125.0 131.2 149.1 160.0 100.0 100.2 96.3 100.9 104.3 1955 1956 1957 1958 1959 ............................ ............................ ............................ ............................ ............................ 114.1 113.3 115.6 115.1 120.6 122.8 128.0 128.9 133.3 140.5 123.5 131.6 133.7 138.9 149.0 133.9 137.4 149.5 157.0 169.7 168.1 178.7 195.6 182.7 212.9 107.8 107.8 110.6 112.7 117.1 1960 ............................ 1 9 6 1 ............................ 1962 ............................ 1963 ............................ 1964 ............................ 121.4 124.7 130.1 139.4 146.2 145.5 153.3 161.3 167.5 174.9 156.7 163.9 171.5 181.7 190.9 181.6 191.4 203.6 212.8 229.7 245.0 277.6 289.5 312.8 354.6 124.1 125.2 128.4 135.2 144.8 1965 1966 1967 1968 1969 ............................ ............................ ............................ ............................ ............................ 150.8 152.4 152.4 157.7 160.4 181.5 187.7 193.7 206.9 219.1 201.8 216.0 228.0 253.9 263.2 244.7 253.3 269.8 288.3 305.1 369.5 406.9 466.9 525.6 607.2 149.5 155.2 162.3 174.0 178.3 1970 ............................ 1 9 7 1 .........' .................. 1972 ............................ 1973 ............................ 1974 ............................ 160.1 169.9 178.4 188.1 183.7 222.2 238.0 248.6 264.3 270.2 276.4 291.1 307.8 324.7 336.0 310.1 322.9 344.0 364.2 384.0 684.5 727.7 810.7 893.8 915.6 179.7 186.8 201.3 213.8 215.4 1975 1976 1977 1978 1979 ............................ ............................ ............................ ............................ ............................ 189.0 197.4 202.3 204.1 205.5 263.2 277.3 288.5 293.1 298.1 346.3 374.7 393.7 416.0 436.5 404.3 433.2 454.5 469.3 492.2 951.0 1,040.4 1,114.9 1,202.5 1,309.4 211.2 219.6 233.2 230.6 238.2 1980 ............................ 1 9 8 1 ............................ 205.8 211.5 288.2 289.1 443.6 450.8 499.2 512.6 1,397.8 1,442.9 239.7 253.9 United Kingdom Japan Table 13. Output per employee hour in manufacturing, selected countries, 1950-73 and 1973-81 (Average annual rate of change, in percent) Manufacturing—-output per hour Country United S tates........................................ Canada ................................................. France................................................... G erm an y............................................... Japan..................................................... United Kingdom .................................. 1950-73 1973-81 2.7 4.3 5.3 5.9 9.5 3.5 1.7 1.4 4.6 4.5 6.8 2.2 71 Table 14. Levels1 of output per hour in the iron and steel industry, selected countries and years, 1964-80 (Index, United States = 100) Year Japan France Germany United Kingdom 1964 1972 1973 1974 ......................................... ......................................... ......................................... ......................................... 4 4 - 51 8 3 - 98 98-116 98-116 47-49 63-68 64-69 65-70 53 76 82 85 - 58 82 87 91 47-49 53-55 54-56 49-51 1975 1976 1977 1978 1979 ......................................... ......................................... ......................................... ......................................... ......................................... 96-115 102-124 108-130 106-129 119-145 60-64 63-68 69-74 71-77 79-86 81 - 87 8 4 - 90 8 7 - 93 8 9 - 94 99-105 45-47 48-50 48-50 47-49 52-54 1980 ......................................... 128-155 86-93 102-109 47-49 1 Range of estimates. Table 15. Output per hour of all persons, unit labor costs, and compensation per hour in the business economy, 1948-82 (Percent change from previous year) Year Output per hour of all persons Unit labor costs Compensation per hour 1948 ..................................................... 1949 ..................................................... 5.3 1.5 3.0 .1 8.5 1.6 1950 1951 1952 1953 1954 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... 7.9 2.8 3.2 3.2 1.6 -.8 6.9 3.0 3.1 1.6 7.1 9.8 6.4 6.4 3.2 1955 1956 1957 1958 1959 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... 4.0 1.0 2.5 3.1 3.2 -1.4 5.5 3.9 1.3 1.0 2.5 6.5 6.5 4.4 4.3 1960 1961 1962 1963 1964 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... 1.5 3.3 3.8 3.7 4.3 2.7 .5 .7 .0 .8 4.2 3.8 4.6 3.7 5.2 1965 1966 1967 1968 1969 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... 3.5 3.1 2.2 3.3 .2 .3 3.8 3.0 4.4 6.7 3.9 7.0 5.5 7.8 7.0 1970 1971 1972 1973 1974 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... .8 3.6 3.5 2.6 -2.4 6.4 2.9 2.9 5.3 12.1 7.3 6.6 6.5 8.0 9.4 1975 1976 1977 1978 1979 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... 2.2 3.3 2.4 .6 -.9 7.3 5.1 5.1 8.0 10.7 9.6 8.6 7.7 8.6 9.7 1980 ..................................................... 1981 ..................................................... 1982 ..................................................... -.7 1.8 .4 11.2 7.7 6.9 10.4 9.6 7.3 72 Table 16. Composition of price changes, business economy, 1948-82 (Percent change) Point contribution to percent change Year Implicit price deflator Unit labor costs 1948 ..................................................... 1949 ..................................................... Unit nonlabor payments1 7.0 -1.0 2.0 .1 4.9 -1.1 1950 1951 1952 1953 1954 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... 1.6 7.4 1.1 .9 1.0 -.5 4.4 1.9 2.0 1.1 2.1 3.0 -.8 -1.2 -.1 1955 1956 1957 1958 1959 ...................................................... ..................................................... ..................................................... ...................................................... ...................................................... 1.6 3.3 3.5 1.3 2.0 -1.0 3.5 2.6 .9 .7 2.5 -.2 .9 .5 1.3 1960 1961 1962 1963 1964 ..................................................... ..................................................... ...................................................... ..................................................... ...................................................... 1.4 .6 1.5 1.1 1.0 1.8 .3 .5 .0 .6 -.3 .2 1.0 1.1 .4 1965 1966 1967 1968 1969 ..................................................... ...................................................... ..................................................... ..................................................... ..................................................... 1.9 3.0 2.7 4.0 4.9 .2 2.4 2.0 2.8 4.4 1.7 .6 .8 1.2 .5 1970 1971 1972 1973 1974 ..................................................... ..................................................... ...................................................... ..................................................... ...................................................... 4.5 4.4 3.4 5.5 9.5 4.3 2.0 1.9 3.5 8.0 .2 2.5 1.5 2.0 1.5 1975 1976 1977 1978 1979 ..................................................... ...................................................... ...................................................... ...................................................... ...................................................... 9.8 4.7 5.8 7.5 9.0 4.9 3.4 3.4 5.3 7.1 4.9 1.4 2.2 2.3 1.9 1980 ...................................................... 1981 ...................................................... 1982 ...................................................... 9.4 9.5 5.5 7.6 5.3 4.6 1.9 4.2 .9 1 Unit nonlabor payments include corporate pro fit and the profit component of proprietors’ income, as well as capital consumption allowances (replacement basis), net interest, and rental in come of persons. Note : Figures in the second and third columns may not add up to figures in the first column because of rounding. 73 Table 17. Qutpufl per hour of all persons, compensation per hour, unit labor costs, and prices in major sectors, 1973-81 (Average annual percent change) Output per hour of all persons Sector Comm unications..................... F a rm ......................................... Manufacturing ........................ Transportation ....................... T rade......................................... Electric, gas, and sanitary service s................. M in in g ....................................... Compensation per hour Unit labor costs Prices 5.3 3.8 1.7 .2 1.0 9.7 11.0 9.6 9.3 8.5 4.2 7.0 7.8 9.0 7.4 3.4 3.3 7.1 9.1 7.1 .3 -5.0 9.1 9.9 8.8 15.8 9.0 18.8 Table 18. Output per employee hour and compensation per employee hour, selected industries, 1967-80 (Average annual percent change) Industry Output per employee hour Compensation per hour Industry Output per employee hour Compensation per hour Fluid milk ........................................................ Preserved fruits and vegetables................... Grain mill p ro d u c ts ......................................... Bakery p ro d u c ts ............................................. Sugar .............................................................. 5.1 2.8 2.8 1.1 2.6 7.8 8.6 8.6 8.3 9.1 Footw ear........................................................ Glass con tainers........................................... Hydraulic c e m e n t......................................... Structural clay p ro d u c ts .............................. Concrete products ....................................... .3 2.1 1.1 2.8 1.5 6.6 10.0 9.9 7.9 7.9 Candy and confectionery products1 ............. Malt beverages............................................... Bottled and canned soft d rin k s ..................... Total to b a c c o ........... .................................. H osiery............................................................ 4.5 7.3 4.2 1.7 6.9 8.5 9.2 8.6 11.7 7.1 Ready-mixed c o n c re te ................................ S te e l.............................................................. Gray iron fo u n d rie s....................................... Steel fo u n d rie s ............................................. Primary copper, lead, and z in c ................... .3 1.6 2.0 .8 2.9 8.2 10.4 9.5 8.7 11.3 .................................... Nonwool yarn mills Sawmills and planing mills, g e n e ra l............. Millwork .......................................................... Veneer and plyw oo d....................................... Household fu p n itu re ....................................... 2.2 1.1 .0 2.8 2.2 8.0 9.5 7.9 9.2 7.3 Primary alum inum ......................................... Copper rolling and dra w in g .......................... Aluminum roiling and draw ing..................... Metal cans .................................................... Hand and edge to o ls ..................................... Fabricated structural metal ........................ 1.2 1.7 4.8 2.7 .6 .0 11.1 8.2 10.1 10.0 7.9 7.6 Office fu rn itu re ............................................... Paper, paperboard, and pulp m ills ............... Paper and plastic b a g s .................................. Folding paperboard b o x e s ............................ Corrugated and solid fiberboard boxes . . . . 1.9 3.4 2.3 2.0 4.4 8.4 9.8 8.6 8.3 8.8 Synthetic fib e rs ............................................... Pharmaceutical preparations........................ Soaps and detergents..................................... Cosmetics and other to ile trie s ..................... Paints and allied products ............................ 7.7 3.9 2.5 3.5 2.7 9.4 8.4 8.5 8.0 8.1 Farm and garden m achinery........................ Construction machinery and equipm ent. . . Machine to o ls ............................................... Pumps and compressors ............................ Ball and roller b e aring s................................ Transformers ............................................... 27 1.9 .4 1.8 1.4 2.2 9.5 9.5 8.0 8.4 8.6 6.9 Petroleum re fin in g ......................................... Tires and inner tu b e s ..................................... 2.8 1.9 9.7 8.1 Motors and g e n e ra to rs................................ Major household appliances........................ Electric la m p s ............................................... Lighting fixtures ........................................... Radio and television receiving s e ts ............. Motor vehicles and e q u ip m e n t................... .9 4.0 1.6 2.2 4.8 2.8 7.5 7.7 8.7 8.0 9.1 9.7 1967-78. 74 Table 19. Output per employee hour and prices, selected industries, 1960-80 (Average annual percent change) Industry Output per employee hour Prices Industry Output per employee hour Prices Preserved fruits and vegetables................... -0.3 4.6 3.0 3.1 3.5 10.5 3.9 4.7 4.9 4.2 Clay re fra cto rie s........................................... Concrete p ro d u c ts ....................................... Ready-mixed c o n c re te ................................ S te e l.............................................................. Gray iron fo u n d rie s...................................... 3.0 2.7 1.2 1.9 2.2 5.5 5.0 5.4 6.3 6.4 Blended and prepared flour1.......................... Wet corn milling1 ............................ Prepared feeds for animals and fowls1. ......... 1.6 2.3 1.1 7.1 2.9 5.9 5.1 4.7 5.1 4.9 Steel fo u n d rie s ............................................. Primary copper, lead, and z in c ................... Primary c o p p e r............................................. Primary alum inum ......................................... Copper rolling and d ra w in g .......................... 1.1 2.1 2.0 1.7 1.9 5.6 6.1 5.7 5.1 5.6 Sugar ............. Candy and confectionery products2 ............. Malt beverages Bottled and canned soft drinks ........... 2.1 2.9 4.1 7.0 3.0 5.4 6.4 5.0 2.9 5.7 Aluminum rolling and draw ing..................... Metal cans ................................................... Hand and edge to o ls .................................... Fabricated structural metal ........................ Farm and garden machinery........................ 5.1 2.4 1.2 .9 2.8 4.4 6.3 5.9 6.2 5.3 1.5 2.6 7.1 2.0 1.9 5.2 2.2 .2 3.6 8.0 Construction machinery and equipm ent. . . Machine to o ls ............................................... Metal-cutting machine to o ls ........................ Metal-forming machine tools ..................... Pumps and compressors ............................ 2.1 .7 1.0 -.3 2.0 6.4 6.7 6.6 7.1 5.5 6.3 5.4 3.3 4.0 3.8 Ball and roller b e aring s................................ Transformers1 ............................................... Motors and g e n e ra to rs................................ Major household appliances........................ Household cooking e q uipm e nt................... 2.1 2.5 1.9 4.5 4.0 4.2 2.6 4.7 2.8 3.4 Metal household furniture ............................ 1.2 3.6 2.2 1.9 2.0 Paper, paperboard, and pulp m ills ............. Paper and plastic b a g s .................................. 4.1 1.6 1.6 3.8 2.6 2.8 5.3 5.4 4.9 5.0 Household refrigerators and fre ezers........ Household laundry e q u ip m e n t................... Household appliances, n.e.c........................ Electric la m p s ............................................... Lighting fixtures3 ........................................... 5.0 4.4 3.3 1.6 2.4 2.5 2.7 2.8 4.7 3.9 3.4 4.5 .8 2.1 4.0 Radio and television receiving s e ts ............. Motor vehicles and e q u ip m e n t................... Railroad transportation-revenue traffic4 . . . Class I bus carriers5 .................................... Air transportation5......................................... 4.7 3.0 4.3 -.3 5.9 1.1 4.1 9.5 7.9 6.1 Soaps and detergents.................................... 2.1 4.2 6.9 4.4 2.8 3.0 4.6 8.8 4.2 5.0 Telephone com m unications........................ Gas and electric u tilitie s .............................. Electric u tilitie s ............................................. Gas u tilitie s ................................................... Retail food s to r e s ......................................... 5.6 3.8 4.5 2.5 1.0 2.0 5.5 4.7 6.3 5.5 F o o tw e a r........................................................ 3.8 2.6 4.0 2.6 .3 Brickand structural c la y tile .......................... 2.4 2.5 3.0 3.0 2.3 5.8 6.1 4.8 4.6 5.6 Franchised new car d e a le rs ........................ Gasoline service s ta tio n s ............................ Eating and drinking p la c e s .......................... Drug and proprietary s to r e s ........................ Hotels, motels, and tourist c o u rts ............... Laundry and cleaning s e rv ic e s ................... 1.9 4.0 .5 4.3 2.3 .9 3.4 5.9 6.2 2.9 5.7 5.7 Ceramic wall and floor tile ............................ 3.9 2.5 Cereal breakfast foods1 Cigarettes, chewing, and smoking tobacco .............................. Sawmills and planing mills, g e n e ra l............. Millwork Veneer and plywood .................................. ............... Corrugated and solid fiberboard boxes . . . . Glass containers............................................. Hydraulic c e m e n t........................................... Structural clay products 1 1963-80 (output per employee hour). 2 1960-78 (output per employee hour). 3 1961-80 (output per employee hour). 4 1969-80 (prices). 5 1964-80 (prices). n.e.c. = not elsewhere classified. 75 Table 20. Output per employee hour,compensation per hour, and unit labor costs in manufacturing, selected countries, 1973-81 (Average annual percent change) Country Output per hour 1973-81 Compensaation per hour 1973-81 United States .......................... Canada .................................... France .................................... G erm any.................................. Japan ...................................... United Kingdom ..................... 1.7 1.4 4.6 4.6 6.8 2.2 9.6 11.1 15.1 9.4 9.7 19.1 Unit labor costs National currency 1973-81 U.S. dollars 1973-81 7.7 9.5 10.0 4.7 2.7 16.6 7.7 6.5 9.4 9.1 7.2 15.0 Table 21. Output per hour of all persons and real compensation per hour in the business economy, 1950-82 (Index, 1950 = 100) Year Output per hour of all persons Real compensation per hour 1950 1951 1952 1953 1954 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... 100.0 102.8 106.1 109.5 111.2 100.0 101.7 105.8 111.8 114.9 1955 1956 1957 1958 1959 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... 115.7 116.9 119.8 123.5 127.5 118.2 124.0 127.7 129.7 134.2 1960 1961 1962 1963 1964 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... 129.3 133.6 138.7 143.9 150.0 137.6 141.3 146.1 149.6 155.3 1965 1966 1967 1968 1969 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... 155.3 160.1 163.7 169.2 169.6 158.7 165.0 169.0 174.9 177.6 1970 1971 1972 1973 1974 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... 170.9 177.0 183.3 187.9 183.4 179.8 183.8 189.6 192.7 190.0 1975 1976 1977 1978 1979 ..................................................... ..................................................... ..................................................... ..................................................... ..................................................... 187.5 193.7 198.4 199.5 197.6 190.8 195.9 198.1 199.9 197.0 1980 ..................................................... 1981 ..................................................... 1982 ..................................................... 196.2 199.7 200.4 191.5 190.2 192.2 76 Table 22. Output per employee hour and employment, selected industries, 1960-81 (Average annual percent change) Industry Output per employee hour Employment Industry Output per employee hour Employment Iron mining, usable ore Copper mining, recoverable metal Coalm ining .................................. Nonmetallic minerals, except f u e l s ............. Fluid milk . ............................................... 2.5 1.3 -.2 2.3 4.6 -1.1 1.3 2.5 .0 -4.1 Steel fo u n d rie s ............................................. Primary copper, lead, and z in c ................... Primary alum inum ......................................... Copper rolling and d ra w in g .......................... Aluminum rolling and d raw ing..................... .9 2.3 1.6 1.9 4.8 1.4 -1.8 3.0 -1.3 .9 Preserved fruits and vegetables’ Bakery products Sugar .............................................................. Candy and confectionery products2 ............. Malt beverages............................................... 3.0 2.0 2.8 4.1 6.9 .8 -1.5 -1.0 -.8 -2.4 Metal cans ................................................... Hand and edge tools’ .................................. Fabricated structural metal ........................ Farm and garden m a c h in e ry '..................... Construction machinery and equipment. . . 2.4 1.2 .9 2.8 2.0 .4 2.2 1.3 1.8 2.4 3.0 1.8 6.9 1.9 1.8 1.2 -1.4 -3.1 2.2 -1.3 Machine to o ls ............................................... Pumps and compressors’ ............................ Ball and roller be aring s................................ Transformers4 ............................................... Motors and g e n e ra to rs................................ .6 2.0 1.9 2.5 1.7 .2 2.8 .3 1.2 -.2 1.2 3.6 2.3 1.7 3.7 1.7 .3 1.2 3.8 2 Major household appliances........................ Electric la m p s ............................................... Lighting fixtures5 ........................................... Radio and television receiving sets’ ........... Motor vehicles and e q u ip m e n t................... 4.3 1.6 2.4 4.7 2.9 -.5 1.3 1.4 -1.2 1.1 2.6 1.9 4.1 6.9 4.4 1.3 -1.1 1.0 .7 2.5 Railroad transportation-revenue tra ffic. . . . Class I bus carriers’ ..................................... Intercity trucking-general freight ............... Air tra n s p o rta tio n ......................................... Petroleum pipelines .................................... 4.2 -.3 2.0 5.7 5.7 -2.3 .0 1.6 3.7 -.5 2.8 3.8 2.5 4.0 2.7 .8 3.0 .3 -1.1 .7 Telephone com m unications........................ Gas and electric u tilitie s .............................. Electric u tilitie s ............................................. Gas u tilitie s ................................................... Retail food s to r e s ......................................... 5.7 3.6 4.2 2.3 .9 2.4 1.4 2.0 .2 1.8 .3 2.4 2.2 2.8 2.7 -2.9 .7 -1.2 -2.7 .7 Franchised new car d e a le rs ....................... Gasoline service s ta tio n s ............................ Eating and drinking p la c e s .......................... Drug and proprietary s to r e s ........................ Commercial banking6 .................................. 1.9 3.9 .4 4.1 1.3 1.3 -.1 4.6 1.0 4.5 1.2 1.9 2.1 1.8 -.9 .7 Hotels, motels, and tourist c o u rts ............... Laundry and cleaning s e rv ic e s ................... 2.1 .7 3.1 -2.7 Total tobacco Hosiery Millwork1 . .......................... ................................................. Office furniture’ . .................................. Paper and plastic bags’ ................................ Corrugated and solid fiberboard boxes . . . . Ready-mixed concrete’ Steel ........ Gray iron fou ndrie s......................................... 11960-80. 2 1960-78. 3 1963-81. 4 1963-80. 5 1961-80. 6 1967-80. 77 Table 23. Output and employment in selected industries with similar productivity growth, 1960-81 (Average annual rate of change) Industry Output per employee hour Output Employee hours Primary a lum inum ................................ C ig a re tte s ............................................. Sawmills and planing mills ................. 1.6 1.5 1.8 4.5 1.6 .5 2.9 .1 -1.2 Gasoline service stations ................... Cosmetics and other toiletries .......... Paper, paperboard, and pulp mills . . . . 3.9 3.8 3.7 4.0 6.9 3.2 -1.3 3.0 -.5 Mattresses and bedsprings................. Household cooking e q u ip m e n t........... Railroad transportationrevenue tra ffic .................................. 4.1 4.0 3.0 5.8 -1.0 1.7 4.2 1.4 -2.6 Table 24. Gross domestic product per capita and average weekly hours per person engaged in production in the business economy, 1947-81 (Index, 1947 = 100) Year GDP per capita Average weekly hours 1947 ...................................................... 1948 ..................................................... 1949 ...................................................... 100.0 102.4 101.1 100.0 99.4 98.3 1950 1951 1952 1953 1954 ...................................................... ...................................................... ...................................................... ...................................................... ...................................................... 108.0 115.1 117.3 119.8 116.3 98.3 98.3 97.8 97.3 96.4 1955 1956 1957 1958 1959 ...................................................... ...................................................... ...................................................... ...................................................... ...................................................... 121.9 122.3 122.3 119.8 124.9 97.0 96.3 95.0 94.3 95.0 1960 1961 1962 1963 1964 ...................................................... ...................................................... ...................................................... ...................................................... ...................................................... 125.5 126.7 132.0 135.4 140.5 94.5 94.1 94.4 94.3 94.1 1965 1966 1967 1968 1969 ...................................................... ...................................................... ...................................................... ...................................................... ...................................................... 147.1 154.1 156.6 162.2 165.1 94.3 93.8 92.6 92.2 91.7 1970 1971 1972 1973 1974 ...................................................... ...................................................... ...................................................... ...................................................... ...................................................... 162.8 166.3 173.8 182.1 179.3 90.3 90.0 89.9 89.8 88.7 1975 1976 1977 1978 1979 ...................................................... ...................................................... ...................................................... ...................................................... ..................................................... 175.4 183.2 191.4 198.8 202.2 87.8 87.8 87.6 87.3 86.9 1980 ..................................................... 1981 ...................................................... 199.2 201.2 86.0 85.8 78 Table 25. Output per hour of all persons in the business economy, adjusted for shifts in employment from the farm to the nonfarm business economy, 1947-82 (Index, 1947 = 100) Output per hour Shift-adjusted output per hour 1947 1948 1949 100.0 105.3 106.9 100.0 104.7 106.6 1950 1951 1952 1953 1954 115.3 118.5 122.3 126.3 128.3 113.6 115.5 118.5 121.2 123.1 1955 1956 1957 1958 1959 133.4 134.8 138.2 142.4 147.0 127.8 128.3 130.8 134.6 138.5 1960 1961 1962 1963 1964 149.1 154.0 159.9 165.9 173.0 140.1 144.4 149.5 154.6 160.6 1965 1966 1967 1968 1969 179.1 184.7 188.8 195.1 195.6 165.8 170.1 173.6 179.2 179.1 Year 197.1 204.2 180.3 1971 1972 1973 1974 211.3 216.7 211.6 193.1 197.7 193.0 1975 1976 1977 1978 1979 216.2 223.4 228.8 230.1 227.9 197.3 203.5 208.2 209.3 207.1 1980 1981 1982 226.2 230.3 231.1 205.5 209.1 209.9 1970 186.6 79 Table 26. Gross nonresidential capital formation per employed person, selected countries, averages for periods, 1960-81, and 1974-81 (Index, United States = 100 each period) Year 1960-81 1974-81 Canada ................................................. Japan..................................................... F rance. . ... ............... G erm an y............................................... Ita ly ........................................................ United Kingdom .................................. 115.9 83.9 73.1 79.4 52.6 47.2 124.8 114.8 87.5 90.3 58.5 52.0 Note : Comparative levels of real investment are based on international price weights. Table 27. Expenditures for research and development as a percent of gross national product, selected years, 1961-82 Year Total Industrial 1961 ..................................................... 1965 ..................................................... 2.73 2.90 2.07 2.05 1970 ..................................................... 1975 ..................................................... 1977 ..................................................... 2.63 2.27 2.24 1.82 1.56 1.56 1981 ..................................................... 19821 ...................................................... 2.47 2.59 1.78 1.90 1 Preliminary estimates. Table 28. Expenditures for research and development as a percent of gross national product, selected countries, 1961-82 Year United States France Germany Japan United Kingdom 1961 1962 1963 1964 ......................................... ......................................... ......................................... ......................................... 2.73 2.73 2.86 2.96 1.38 1.46 1.55 1.81 n.a. 1.25 1.41 1.57 1.39 1.47 1.44 1.48 2.45 n.a. n.a. 2.29 1965 1966 1967 1968 1969 ......................................... ......................................... ......................................... ......................................... ......................................... 2.90 2.88 2.90 2.82 2.72 2.01 2.06 2.13 2.08 1.94 1.73 1.81 1.97 1.97 2.05 1.52 1.46 1.52 1.60 1.64 n.a. 2.31 2.29 2.25 2.22 1970 1971 1972 1973 1974 ......................................... ......................................... ......................................... ......................................... ......................................... 2.63 2.48 2.40 2.32 2.29 1.91 1.90 1.86 1.76 1.79 2.18 2.38 2.33 2.22 2.26 1.81 1.85 1.86 1.90 1.97 n.a. n.a. 2.05 n.a. n.a. 1975 1976 1977 1978 1979 ......................................... ......................................... ......................................... ......................................... ......................................... 2.27 2.27 2.24 2.23 2.27 1.80 1.77 1.76 1.76 1.81 2.38 2.29 2.31 2.31 2.59 1.96 1.95 1.93 1.96 2.09 2.05 n.a. n.a. 2.13 n.a. 1980 ......................................... 1981 ......................................... 1982 ......................................... 2.39 2.47 12.59 1.85 1.97 n.a. 2.65 2.68 n.a. 2.23 n.a. n.a. n.a. n.a. n.a. Preliminary estimates. n.a. = not available. BLS Handbookof [ M o f f lh i© d 3 @ 1982 Edition, Volume I* O Labor force, employment, and unemployment © Negotiated wage and benefit changes BLS statistics are used for many purposes, and sometimes data well suited to one purpose may have limitations for another. This Handbook aims to provide users of BLS data with the information necessary to evaluate the suitability of the statistics for their needs. Included are program descriptions for: O Occupational employment statistics © Employment Cost Indexes Th e fo llo w in g BLS re giona l o ffic e s w ill e xp e d ite o rders. 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