BLS DAILY REPORT, TUESDAY, AUGUST 12, 1997 RELEASED TODAY: Preliminary seasonally adjusted annual rates of productivity change in the second quarter were: 0.7 percent in the business sector and 0.6 percent in the nonfarm business sector. In both the business and nonfarm business sectors, productivity growth in the second quarter was slower than in the first quarter, as the increases in both output and hours slowed. In the first quarter of 1997, output per hour of all persons (as revised) rose 1.8 percent in the business sector and 1.4 percent in the nonfarm business sector. In manufacturing, productivity changes in the second quarter were: 3.2 percent in manufacturing, 5.1 percent in durable goods manufacturing, and 0.9 percent in nondurable goods manufacturing .... The cost of work-related fatalities and injuries increased from $119 billion in 1995 to about $121 billion in 1996, according to the National Safety Council. The figure includes lost wages and productivity as well as health care costs and administrative expenses, the safety council explains. The slight increase in costs occurred even though the total number of workplace fatalities -- as reported by BLS the same day -- declined about 2 percent to 6,112 workers in 1996. The disparity reflects an increase in health care and workers' compensation costs, which more than made up for the decline in fatalities, according to a safety council spokesman ....(Daily Labor Report, page A-9). The Teamsters' strike against UPS is likely to have a small impact on the overall economy, particularly if it does not drag on, say most analysts questioned by BNA. The strike, which has idled 185,000 UPS workers who walked off the job Aug. 4, is unlikely to put the brakes on U.S. economic growth, analysts say. Most economists and industry analysts interviewed voice confidence that American business is flexible and innovative enough to cope with whatever problems the strike causes ....If the walkout continues through next week, however, it will likely add some "noise" to government statistics, especially the employment numbers. The employment report will probably pick up the drop in jobs caused by the strike, says BNA, but analysts say this is a temporary phenomenon that will reverse itself if and when the strikers return to their jobs ....The potential effect of a second phase of the strike is more difficult to determine. Not only would workers lose wages and UPS lose profits, but some businesses would begin to run short of supplies. This could cause a pinch on the economy ....In the third phase of the strike, businesses would learn to get along without UPS. This would not have much effect on the overall economy ....(Daily Labor Report, page AA-2). The businesses and institutions hardest hit by the UPS strike have been schools and hospitals, catalogue companies, independent retailers, and small medical suppliers who rely heavily on UPS and are having difficulty finding alternatives ....The big companies seem to be faring better because their size gives them more leverage with UPS competitors and because they have enough business to make it worth their while to spread it around ....(Washington Post, page C1). Although the issues underlying the UPS strike differ from other labor disputes, the basic problem facing labor unions is that union membership has remained static in recent decades, giving union employers an increasing number of nonunion competitors. In a wide range of industries, such as meatpacking, construction, autos, and trucking, unions are being forced to grant contract concessions to employers to match the lower labor costs of nonunion and international rivals ....As a percentage of the nation's work force, union membership has declined from about 35 percent after World War II to a little more than 14 percent today -- and barely more than 10 percent of the private sector work force ....A graph shows waning unionization with data from 1977 to the present, the source of the statistics being BLS ....(Washington Post, page A1). The teamsters say their main goal is for part-time workers to gain full-time jobs that pay enough for them to live on. But the company says it cannot transform many part-time jobs to full-time ones because its day is made up of busy bursts and long lulls ....(New York Times, page A1). The Sunday New York Times (page A26) says that the labor unions are now attempting to organize on the lower rungs of the economic ladder. Until now, almost every strike that has commanded the nation's attention has involved organized labor's high-paid elite ....But the walkout at the United Parcel Service is the first strike to capture the national spotlight that involves labor's lower castes, in this case, part-time parcel sorters and truck loaders who earn about $10,000 a year ....This new focus is, in part, a natural response to underlying changes in the work force. The number of manufacturing jobs is stagnant, and the number of service-sector jobs, especially low-wage ones, has mushroomed .... Infrastructure dollars pay big dividends, says the Wall Street Journal (page A2). State and city projects build jobs and competitiveness .... Louis Uchitelle (New York Times, Aug. 10, page E1) points out that, when the history of America's mid-1980's economic boom is written, a fat chapter will certainly be devoted to the mystifying strength of corporate profits -- how they were able to rise so fast for so long. And there must also be a chapter that describes what happened when this extraordinary performance became ordinary, or worse. And the material for this second chapter seems to be falling into place now. Part of the foundation undergirding the boom is quietly being eaten away. Stagnant wages are beginning to rise ....If wages rise, then profits dip, the market droops, and the economy won't hum. Unless productivity saves the day .... DUE OUT TOMORROW: Producer Price Indexes -- July 1997
