
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, March 8, 1990                   TAG: 9003081584
SECTION: BUSINESS                    PAGE: C-9   EDITION: METRO 
SOURCE: 
DATELINE: WASHINGTON                                LENGTH: Short

PRODUCTIVITY GAIN WORST IN 8 YEARS

American workers' productivity in the non-farm portion of the nation's economy last year posted its worst performance since 1982, improving only 0.9 percent, the government said Wednesday.

Meanwhile, hourly labor costs - a major inflation measure for businesses - escalated significantly, by 5.4 percent, the Labor Department said. That increase, up from 4.7 percent in 1988, was the biggest rise in hourly labor costs since the 1981-82 recession.

"That's what happens when you have a slowdown in the economy; you get squeezed from both ends. The two blades of the scissors began to push together," said Robert Dederick, chief economist for the Northern Trust Co. of Chicago.

"We're not likely to break out of this vise in 1990," he said.

Since the end of the 1981-82 recession, productivity growth has averaged 1.8 percent a year. Increasing productivity is considered basic to boosting living standards because it allows businesses to pay workers more as their output rises without risking higher inflation. - Associated Press

by CNB