U.S. Productivity Ills Explained: Sunday Tables Listing Mixed
The growth in economic output and productivity in this country trails that of other major industrial nations in large part because the United States devoted a much smaller share of its production to upgrading and expanding its manufacturing facilities, a Treasury Department study concludes.</br></br>Because of this disparity in investment, the ÛÏabsolute level of superiority of U.S. productivity is rapidly diminishing," according to the study.</br></br>Treasury Department economists Herman I. Lie-bling and Julian Jaakson say that the lag in U.S. investment has ÛÏeffectively lowered rates of advance in living standards of the average consumer in the U.S., created shortages in basic-mate-rials-producing industries during periods of economic expansion and added substantially to the inflationary' consequences of high employment in recent years.Û</br></br>Furthermore, it has ÛÏlimited job opportunities in the sense that, had the growth of plant and equipment exceeded that of the labor force, more jobs would have been required to utilize that increased capacity.Û</br></br>Liebling and Jaakson argue that there is a strong correlation between the so-called investment ratio (the percentage of output a nation invests) and the growth of output.