Pay of U.S. Workers Doesn’t Match Output : Despite highest productivity, Americans fail to gain full competitive edge with major countries.

Here is an intriguing conundrum for President Clinton, Congress and everyone else interested in the nation’s depressed economy.

The average American manufacturing worker produces more goods per hour than a worker in any other major industrial country in the world. Yet the American worker earns less in wages and benefits per hour than a worker in any other major fully industrialized nation, except Japan, where the wages are almost the same as in the United States, and the United Kingdom, where workers get about 10% less.

The puzzle is why the rising productivity of the American worker is not a greater competitive advantage in trade with other major industrial nations.

The figures--both for production and hourly wages and benefits--come from the Bureau of Labor Statistics, a pretty reliable, nonpartisan government agency, so it may be hard for the average worker to understand why Americans aren’t at the top of the international economic pile.

We do have other world competitors, of course, among newly industrializing countries--Mexico, Korea, Taiwan, for example--where wages and benefits are dramatically lower than in the United States. But those emerging nations are not yet our largest trading partners. And few American leaders seem willing to suggest trying to compete with them by bringing wages and benefits of manufacturing workers here down to their level.

Economists admit they cannot adequately explain why the United States is not more successful in international trade when its workers outproduce those in other major industrialized nations, while earning, on average, less. However, they offer some partial explanations.

Some suggest that high trade barriers raised by our biggest competitors are primarily to blame. Others say part of the answer lies in fluctuating exchange rates for the dollar, yen, mark, franc and other currencies. Some also point out that the BLS figures are averages for all manufacturing, so not all U.S. companies that compete in international markets get the advantage of high productivity at comparatively low cost.

But none of these reasons fully explain why the United States is not more of a marketplace winner among the major powers.

There is general agreement that America must do something to cope with the enormous economic problems it faces, including its outsized national debt, the increasing number of part-time and temporary workers, fairly high unemployment, the increasing number of poor people and the trade imbalances with many nations, especially Japan.

A look at just a few of the BLS figures shows what a large disadvantage those countries appear to face when they compete with the United States.

To take the most extreme example: Total compensation for American production workers in manufacturing in 1992 was $16.17 an hour. German workers got the equivalent of $25.94 an hour. That means that if the U.S. rate of pay and fringe benefits is regarded as 100%, the German rate is 160%.

In Sweden, in the time it takes an American production worker to earn $100, Swedish workers earn the equivalent of $150. For major European powers, total hourly compensation averages $20.40 an hour, or 126% of American compensation.

Among major European nations, only workers in the United Kingdom earn less than U.S. workers: $14.69 an hour, or 91% of a U.S. worker’s compensation.

The figures for the major industrialized nations of Europe do not take into account the poorer countries, such as Portugal, Spain and Ireland. Portugal is at the bottom of that group, paying its workers only $5.01 an hour on the average.

In Japan, hourly compensation for manufacturing workers rose during 1992 to $16.16 an hour-- statistically almost exactly the same as the $16.17 U.S. rate.

It is the newly industrializing countries of Latin America and Asia that provide the biggest challenge to wages in the immediate future.

Hong Kong, for instance, pays manufacturing workers an average of $3.89 an hour.

Mexico pays the lowest wages and benefits of all the countries surveyed--an average of $2.35 an hour, including--as in the other BLS figures given--the cost of wages, benefits, vacations, holidays, sick leave and all government required insurance programs.

Mexico’s trade with the United States, while increasing, is still a relatively small part of the U.S. total international trade--about 3%--while Japan accounts for 20% and Europe 26%.

U.S. Workers a Bargain

Here is how the U.S. ranks in total compensation to manufacturing workers, based on an index of 100. U.S. labor is cheaper than labor in most industrializes nations, but more expensive than in newly competitive countries. Germany: 160 Sweden: 150 Norway: 143 Belgium: 136 Netherlands: 128 Denmark: 124 Austria: 122 Italy: 120 Finland: 116 Canada: 105 France: 104 UNITED STATES: 100 Japan: 100 United Kingdom: 91 Korea: 30 Mexico: 15 Source: Bureau of Labor Statistics