Thanks in large part to nonfarm productivity gains that have averaged 2.2%
a year in the '90s--double the pace of the '80s--the U.S. economy is ranked as
the most competitive in the world by the World Economic Forum in Geneva,
Yes, America's mighty economy is moving again, as witnessed by last year's booming stock market and strong corporate profits. But something is missing from this rosy picture. The people who made many of these gains possible--ranging from factory workers to middle managers--have not received a fair share of this economic good fortune. In fact, some are worse off than they were before America embarked on its business resurgence.
Over the last two decades, real wages for American workers have been flat, while those in the higher echelons of the economy have prospered. A study of large companies by the Crystal Report found that the salary of the average CEO in the 1987-1989 period was 141 times that of the average worker. Currently, that ratio has climbed to 235 to 1. With this growing income gap, I'm not surprised that 67% of those polled in a recent U.S. News & World Report survey said that the economy is stagnating or declining. Yet this widespread unease flies in the face of solid economy growth, low inflation, healthy export levels, and heavy investment in new technology by U.S. firms.
Economists say there is often a lag of five years or more between the time when a country's productivity surges--and when workers see higher wages as a result. Better pay also will come to an increasing number of workers who are gaining more education, particularly in technical and computer skills.
Beyond these developments, it's time for the top managers of America's companies to take a hard look at the human costs of their decade-long devotion to 'right-sizing' and other productivity moves. Too often, they will see a workforce that is anxious, exhausted, overworked, and afraid. Worse yet, the mutual respect and loyalty that once existed between company and worker simply has evaporated in far too many places. But it is not too late. The enlightened among America's companies will figure out that they must begin now to design programs that give something back to workers, whether it be child-care help for frazzled families or new profit-sharing programs. If companies fail to respond, we may well witness a bitter backlash from workers as this nation moves into the next century.