Agenda - Council - 12/22/1981 - Laserfiche WebLink

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'1 81-47 November 20, 1981 The Economy CHARLES STEELE SPEAKS ON MEASURING PRODUCTIVITY I believe that many of the answers to productivity problems can be found in the individual com- pany, and corrective action, should begin with top managements that can provide the clear think- ing required. In order for a business to make improvements, it should measure, as much as pos- sible, the elusive quality of productivity. These views were expressed by DH&S Managing Partner Charles G. Steele this week to businessmen at The Town Hall of Los Angeles. Some excerpts from Mr. Steele's presentation: While U.S. productivity remains the highest in the world, we face some problems at the national level. Our labor productivity during recent years has been declining. Real incomes can rise, and the nation's standard of living can improve, only when productivity per worker increases at a rate that is at least equal to increases in wage rates. If the present situation persists, however, and productivity continues to decline, our expectations about rising living standards cannot be met. The problem is compounded by the positive rates of productivity growth of some of our major inter- national trading partners. Projections of current trends indicate that, if the U.S. productivity does not improve, 2 or 3 nations will surpass us in productivity within a few years. I believe that the undesirable national decline in productivity can be improved significantly through initiatives taken by individual businesses. Encou raging Developments Regardless of the apparent shortcomings of the statistics, I see encouraging developments for pro- ductivity on the national level. One such development is the recent passage of the Economic Recovery Tax Act. It provides incentives for research and development and for plant and equip- ment investment. ~-he Tax Act also lowers marginal tax rates, thereby increasing the incentive to work, save and invest. The Task Force on Regulatory Relief, headed by Vice President George Bush, and the newly-appointed National Productivity Advisory Committee, chaired by William Simon, offer businesses the op- portunity to support regulatory reform and to make suggestions for further improvements in our nation's productivity. Productivity initiatives outside the government sector are a'lso encouraging. One example is the American Productivity Center in Houston, founded several years ago by Jackson Grayson. It de- votes significant resources to develop national policy recommendations for improving productiv- ity and to increase the nation's awareness of the importance of productivity and the benefits of