More in Less Time

Not since the Roaring Twenties, when production per man-hour rose 5.3% yearly, has there been such a sustained rise in the productivity of the U.S. economy. While manufacturing productivity from 1947 to 1962 increased only 2.9% a year on the average, it has jumped more than 4% in each of the past two years. Last week the Department of Commerce reported that the gain will be 4.3% this year. "Most impressive," said Walter Heller, chief economist for the President.

But Government economists fret over the pains of progress in an economy that needs fewer blue-collar workers as it becomes more efficient. A 4% rate of rise in productivity means that the U.S. will have to create 2,400,000 jobs every year just to keep unemployment from climbing above the current high level of 5.7% of the work force. If the productivity spurt continues, factory production will double in the next 20 years without creating any new jobs. Some U.S. economic policymakers have characteristically begun to argue that the job of making jobs will require not only a cut in taxes but a boost in Government spending as well.

Bonus for Breakthroughs. Productivity is being increased partly by men but mostly by machines. In the past five years, such devices as continuous mining machines, automatic freight yards and automated pipeline networks have increased the productivity of coal miners by 35%, rail workers and oilfield roughnecks by 25%.

Though management argues that labor alone has done little to enhance productivity, labor has contributed by becoming better skilled and schooled--with the help of management. Du Pont uses the new "teaching machines" to upgrade its blue collars so that when their jobs are made obsolete, they can shift over immediately to new ones. Kaiser Steel recently started to pay monthly bonuses for increases in productivity and reductions in production costs, has paid an average $524 per man so far this year, finds that workers now take noticeably greater pains to prevent costly mechanical breakdowns.

Labor Becomes Impatient. Productivity has been rising faster than labor costs, which went up 3% in manufacturing last year. The pressures of unemployment have moderated union demands, but there are signs that labor is becoming impatient. The current issue of the A.F.L.-C.I.O.'s monthly magazine, American Federationist, says that the productivity rise "justifies and even requires higher wage increases than have been occurring in the past several years." Everyone concerned expects a showdown next April, when the United Auto Workers are due to reopen their contract with an industry that is setting new highs in production and profits. Last week in Washington, U.A.W. President Walter Reuther said that labor chiefs should demand increases that at least match the gains in productivity.

Wage rumbles, on top of recent price rises by steelmakers and other manufacturers, have started the New Frontier worrying about prospects of renewed inflation. To head it off, a top policymaker confides, the Administration early next year will issue a new round of wage-and-price "guidelines" for labor and management.

This file is automatically generated by a robot program, so reader's discretion is required.