THE AVERAGE hourly wage for U.S. production workers is $13.92. We have had a negative trade balance of more than $100 billion annually for the last six years.
In Germany, hourly wages average $18, but for the last five years Germany has sold $61.5 billion more abroad than it has imported.
That shoots holes in the argument that the U.S. can't compete in world markets because our wages are too high.
Hourly wages for production workers average $16.82 in Sweden and $15.86 in Denmark -- well above the U.S. average. But both those countries also have been exporting more goods than they import in the last five years.
Japan exports an average of $77 billion more than it imports each year -- but its average wages of $12.72 an hour are only slightly below those of the United States.
These figures are from "The Report of the Commission on the Skills of the American Workforce," recently released by the National Center on Education and the Economy.
The center is a highly regarded Rochester-based organization chaired by John Sculley, chief executive of Apple Computer. Commission members include Owen Bieber, president of the United Auto Workers; Edward J. Carlough, president of the Sheet Metal Workers union; James R. Houghton, chairman of Corning Inc., and William H. Kolberg, president of the National Alliance of Business.
The report contends that a skilled, highly trained, productive work force is the answer to low-wage workers. But it finds that America is behind other nations in educating and training its workers and, shockingly, that the great majority of U.S. managements are not interested in creating a high-skilled, better-educated work force at their plants. Only 5 percent of employers, mostly large manufacturers and communications firms, are concerned about the increasing need for higher skills, the report found.
Typical of the thinking of the vast majority of managements is a quote by an unnamed human resources manager at a financial services firm who told the study team, "I can do my back-office functions anywhere in the world now. If I can't get enough skilled workers here, I'll move the skilled jobs out of the country."
Companies also are trimming their work forces, hiring temporary and part-time help to replace higher paid workers, thereby cutting wages and benefits.
We are on a path toward becoming a low-wage country with lower living standards, and, as the report points out, that is a disastrous course for the nation.
"High-wage nations like the United States can succeed only by producing higher quality products, providing customers with greater product variety, introducing new products more frequently and creating automated systems which are more complex than those which can be operated in low-wage countries," the commission's report states.
Other nations are taking this course. Germany and Japan and the Scandinavian countries have higher rates of productivity growth than the United States "and their living standards and real wages have been rising steadily. Pay differentials between the college-educated and non-college educated are narrower, and the distribution of income is less skewed than in the United States," according to the commission.
Part of the reason why managements in some other countries are more anxious to have a highly skilled work force, rather than looking to farm their work out to be done in foreign nations, is that they are under pressure to do so, either from strong unions or from government full-employment policies.
In Sweden, Denmark and Germany, companies are required by law to consult with unions before laying off workers. Laws throughout Europe require companies to give long advance notice of layoffs and substantial severence pay when a worker loses a job.
Both Japan and Singapore have strong full-employment policies.
The commission also contends that all the other industrial nations do a better job of educating young people who do not plan to attend college. It finds that once a young person is finished with formal education, the United States spends proportionately less than all other nations studied in providing further education and training.
Besides setting high educational standards for youths by the age of 16, the commission would require all employers to spend a minimum of 1 percent of their payroll for the formal education and training of workers.
It also calls for a system of professional certificates to be given across the whole range of occupations, from auto mechanic to welder, to be acquired after two to four years of work study.
It concludes, "The overriding issue is not the economic survival of a few employers; it is the economic security of an entire work force."