America's Changing Work Ethic

December 14, 1979

Report Outline
Changing Employee Values
Impact on U.S. Productivity
Redesigning the Work Place
Special Focus

Changing Employee Values

Productivity Lag and the New Work Ethic

How many people work in your organization?” one executive asked another. “About half.” This old joke still is repeated in corporate boardrooms across the nation, but it probably produces fewer chuckles today than it did in the past. Growing concern about the United States' relatively sluggish productivity record of recent years has made worker performance a topic of intense scrutiny and debate. President Carter, in a televised address to the nation July 15, singled out declining productivity as one of the symptoms of the “crisis of the American spirit” which he said was “threatening to destroy the social and political fabric of America.”

Many economists and business executives regard productivity, broadly defined as output per man-hour, as the best single measure of the economy's vitality. Certainly it is the most complex economic indicator, reflecting the contribution not only of labor but also of technology, managerial expertise, wealth and natural resources. From the end of World War II through the 1960s, productivity in the United States rose by slightly more than 3 percent a year, reaching a peak around 1966. The rate of increase has slowed down since then; in 1978 it was only 0.4 percent. During the first nine months of 1979, the productivity rate actually declined, making it likely that the nation will post a decline for the year as a whole. In the 32 years the U.S. government has been keeping records on productivity it has dropped only once — in 1974, at the start of the country's steepest postwar recession.

Improving America's productivity will not be easy, since numerous factors have contributed to its decline. But most business leaders and economists agree that without workers' support, the task will be nearly impossible. “As the American economy becomes more labor-intensive as a result of the shift towards service, clerical and knowledge work,” James J. O'Toole, associate professor of management at the University of Southern California Graduate School of Business, wrote recently, “the attitudes of workers become central factors in national productivity.”

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