The Federal Role in Fostering Private Sector Productivity

It appears that productivity for 1981 will have improved by only 1.5 percent over 1980's negative growth. This poor productivity performance is of particular concern because of its well documented implications for inflation and international competitiveness. There is an important Federal role in national productivity. Over the past decade, each Administration has had a productivity organization and each has been ineffective because of a lack of adequate support from Congress and the President. Presently, there is no national productivity plan nor are there overall goals or objectives for Federal productivity programs. Therefore, there is no way to properly evaluate productivity programs nor can it be determined how much is being spent on productivity. The Administration maintains that it is fully addressing the productivity problem through tax reform, regulatory reform, budget reductions, a noninflationary monetary policy, and the work of the Cabinet Council on Economic Affairs with the advice of the National Productivity Advisory Committee. These organizations could fulfill the intent of GAO recommendations by guiding and coordinating Federal programs aimed at improving national productivity and by working with the private sector to develop a national productivity plan. The plan should: (1) identify and describe the relationship and effect of Federal policies, programs, and activities on private sector productivity; (2) delineate the responsibilities of Federal departments in the plan; (3) identify unnecessary obstacles to productivity improvement created by the Federal Government; (4) develop alternative policies and lines of responsibility to improve private-sector productivity; (5) list short- and long-term objectives and their priorities and recommend specific projects and programs to attain these objectives; (6) analyze the Federal budget to document where Federal funds in support of private-sector productivity improvement are being spent; and (7) assess Federal efforts to improve productivity. Without such a plan, the Government must approach each productivity-related issue on an ad hoc basis. GAO also believes that an institutionalized focal point for productivity is needed and hopes that the National Productivity Advisory Committee will represent labor and small business interests to involve all aspects of the economy in the productivity problem.