The Federal Role in Fostering Private Sector Productivity

U.S. productivity growth has declined dramatically over the past 12 years. In the past 3 years, it has virtually ceased. Recognizing the importance of productivity, the President established the National Productivity Council and assigned private sector productivity responsibilities to the Departments of Labor and Commerce. The Council was to guide and coordinate these and other Federal efforts to improve productivity and to serve as the Government's primary contact with the private sector on productivity issues. GAO examined the effectiveness of the Council regarding private sector productivity. GAO found that, in over 2 years of existence, the National Productivity Council has been relatively inactive and has largely ignored the functions assigned to it. It has seldom met, has not provided guidance to Federal productivity programs, and has not become recognized as the Government's productivity focal point. The Department of Labor did not act on its leadership responsibilities. The Department of Commerce undertook significant productivity initiatives despite the Council's lack of involvement. The national productivity effort has been ineffective because it lacked support from the executive branch. As a result: (1) Federal programs directly related to productivity improvement are funded and operated without any central review, direction, coordination, or evaluation; (2) there is no recognized spokesperson for productivity concerns; and (3) there is no open channel for airing private sector problems and concerns about productivity related policies. An organization should be established to: (1) provide central review and coordination of Federal programs directed at productivity improvement; (2) provide a productivity perspective in economic and budgetary decisionmaking; (3) provide an open and nonthreatening channel for private sector problems and concerns about productivity-related policies; and (4) develop a national productivity plan outlining what the Federal Government is doing and should be doing to increase productivity.