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THE ECONOMY : U.S. Loses More Ground to Its Major Partners

June 30, 1989|From Associated Press

WASHINGTON — The growth in Americans' standard of living lagged behind other major industrialized nations last year despite a surge in U.S. export sales, according to a report released Thursday by the Council on Competitiveness.

The report said the United States had failed to keep pace with its major trading partners over the past 16 years, losing additional ground in 1988.

The findings came from the council's second annual competitiveness index, an effort to measure U.S. standing in the world economy in terms that have meaning to the average American.

The council tracks competitiveness in four areas--living standards, worker productivity, the U.S. share of the world export market and American investment in education and non-defense research and development.

Those categories were chosen because of their relationship to America's changing fortunes in the world economy.

U.S. investment must keep pace with expenditures of other nations to boost American productivity, a measure of output per hour of work.

Rising productivity is needed to make American products competitive on world markets, thus lowering America's huge trade deficit and providing the income growth to boost American living standards.

While the council found that the growth in America's living standard was lagging behind other countries, the United States still had the second-highest living standard. West Germany is first.

Some Gains, Losses

In 1988, the standard of living, defined as economic output on a per-capita basis, was $15,250 in West Germany, $13,840 in the United States and $11,820 in Japan.

The competitiveness index found that America had made progress in trade and investment last year, compared to its major trading partners, but had lost ground in living standards and productivity.

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