Superior productivity of American industrial workers

Discussions on the economic history of the nations taking part in WW2, from the recovery after the depression until the economy at war.
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TheMarcksPlan
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Re: Superior productivity of American industrial workers

Post by TheMarcksPlan » 13 Jul 2021 01:30

TheMarcksPlan wrote:
13 Jul 2021 01:19
historygeek2021 wrote:DRZW Vol V I/B, page 902, describes 480,000 out of 907,965 Luftwaffe armaments employees on August 1, 1940 as engaged in aircraft building (52%).
Image
A startling thing from this graph, re my point on non-armaments military production and its potential to skew our topline analysis, if ignored:

Total army workforce on 31.7.40: 1,154,861.
Workforce producing "General army equipment": 1,040,000 (figure for a day later though)

As weapons, motor vehicles, and ammo are listed separately from "general army", that leaves only 114,861 or only 9.9% producing weapons, MV, and ammo for the army!

There's gotta be some data issues here but, given USSBS's relatively small figures on, e.g., tank workforce these figures might be in the ballpark. As the data excludes supplier workforce explicitly, and as weapons/MV/ammo probably embody more supplier labor than, say, uniform-makers, 10% is probably too low for the whole picture. And some general army would fall under "sundry" at the top bar on the right. But still...

----

TMP bookmark: non-armaments-producing army labor force
https://medium.com/counterfactualww2
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Re: Superior productivity of American industrial workers

Post by KDF33 » 13 Jul 2021 03:00

TheMarcksPlan wrote:
13 Jul 2021 01:02
Here, with some context:
As I expected... The figure is not about workforce assigned to aircraft production, but overall industrial workforce producing for the Luftwaffe.
TheMarcksPlan wrote:
13 Jul 2021 01:02
Minor nitpick, guys: could we cite pages in the English translation as "GSWW" and the German as "DRZW"? The German language being ridiculous, DRZW is longer and page cites different.
I will proceed accordingly from now on.

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Re: Superior productivity of American industrial workers

Post by KDF33 » 13 Jul 2021 03:11

TheMarcksPlan wrote:
13 Jul 2021 01:30
A startling thing from this graph
Another startling thing is the number of workers assigned to the area of 'Weapons' (and its suppliers). It hardly makes sense. Compared with the figures (admittedly without suppliers) for the 3rd quarter of 1943, we get:

Workforce, 8/1/40 compared to Q3/43:

1. Weapons: 1,042,633 / 241,000 - 271,000 (without - with 'Submarine weapons')
2. Aircraft building: 480,000 / 935,000
3. Ammunition: 408,416 / 708,000 (with 'Powder and explosives')
4. Motor-vehicle construction: 367,000 / 254,000 - 433,000 (without - with 'Tanks')
5. Shipbuilding: 226,000 / 173,000 - 203,000 (without - with 'Submarine weapons')

All the figures match reasonable growth assumptions, even more so given how those for 1940 are calculated inclusive of suppliers. All, that is, save for 'Weapons'. Even if we allow for aircraft and AFV weapons to be included in their respective categories in 1943, it still doesn't make any sense.

Is the quoted source ('BA-MA RW 19/307', 12 August 1940) detailed further in the book?

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Re: Superior productivity of American industrial workers

Post by KDF33 » 13 Jul 2021 03:20

TheMarcksPlan wrote:
13 Jul 2021 01:30
Total army workforce on 31.7.40: 1,154,861.
Workforce producing "General army equipment": 1,040,000 (figure for a day later though)

As weapons, motor vehicles, and ammo are listed separately from "general army", that leaves only 114,861 or only 9.9% producing weapons, MV, and ammo for the army!

There's gotta be some data issues here
My hunch is that 'General army equipment' should read as 'General Wehrmacht equipment'. Still, there's no question that the category required large amounts of manpower which are generally neglected by analysts. Putting aside the strange numbers for 'Weapons', we'd get:

Non-armaments workforce: 1,170,000 (including Communications equipment)
Armaments workforce: 1,481,416 - 1,722,416 (Motor-vehicle construction, Shipbuilding, Aircraft building, Ammunition - with Weapons' figure for 3Q43)

That's a good 40% of the overall industrial workforce producing for the Wehrmacht!

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Re: Superior productivity of American industrial workers

Post by TheMarcksPlan » 13 Jul 2021 03:51

KDF33 wrote:Workforce, 8/1/40 compared to Q3/43:

1. Weapons: 1,042,633 / 241,000 - 271,000 (without - with 'Submarine weapons')
Yeah that's very odd... Weapons were <10% of armaments production but, per the GSWW table, have something like 40% of the armaments workforce. [Does USSBS give the graph's breakdown in numbers somewhere, btw? Maddening to have to estimate such important figures.]

Certainly something is going on there. Likely there was a different definition of "weapons" (waffen in DRZW?) in 40 vs. 43.
KDF33 wrote:Is the quoted source ('BA-MA RW 19/307', 12 August 1940) detailed further in the book?
The role number appears 7 times in GSWW v.5/1 but not always to the same meeting and without further explication. Might have to track it down, see if I can untangle the definitions used. ...when I get a handle on BAMA.
KDF33 wrote:That's a good 40% of the overall industrial workforce producing for the Wehrmacht!
I strongly suspect that a proportional shift away from non-armaments production as war went on explains a good portion of the "armaments miracle." Non-arms basic military materials probably rose in proportion to Wehrmacht manpower; total military production rose to a far greater extent. Reducing non-arms share of military production from 40% to 20%, for example, means a 33% increase in armaments production ( 80 / 60 ).
https://medium.com/counterfactualww2
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Re: Superior productivity of American industrial workers

Post by TheMarcksPlan » 13 Jul 2021 05:43

KDF33 wrote:Although I am confident that the German work week was somewhat longer than its American counterpart, the extent of the difference is very much an open question at this time.
The barest googling shows that debated hours figures would make little difference or probably indicate that Germans were working too many hours for maximum output:
Up until about 48 hours per week, output increases roughly in proportion to the number of hours worked. Starting at 49 hours/week, output rises at a slower rate. The maximum output is achieved at about 63 hours/week, and output in a 70 hour work week is almost the same as that in a 56 hour work week.
http://beyondmanaging.com/2016/01/hours-vs-output/

These are general figures. For a poorly-nourished workforce sleeping even less than expected due to bombing raids, maximum output would be reached much earlier. German output probably would have increased with fewer work hours.
https://medium.com/counterfactualww2
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Re: Superior productivity of American industrial workers

Post by KDF33 » 13 Jul 2021 05:44

Richard Anderson wrote:
12 Jul 2021 15:58
It is referring to two different things. 'Time and one-quarter' refers to the compensation. It was for any work 'over 48 hours' per week and is unrelated to the mandated length of the work week. In other words, it is forced overtime.
Indeed. I meant that given that the Germans introduced in spring 1944 measures incentivizing working more than 48 hours a week, my assumption would be that a large part of the labor force worked no more than 48 hours a week until then.

Indeed, I've found some data pertaining to industry in general:

Image

Much like the latter '72-hour work week', it looks like the '50- to 60-hour work week' was more a slogan than a practical target.

For comparison's sake, across all U.S. industry the average work week was ~43 hours in August 1942.

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Re: Superior productivity of American industrial workers

Post by KDF33 » 13 Jul 2021 05:46

TheMarcksPlan wrote:
13 Jul 2021 05:43
These are general figures. For a poorly-nourished workforce sleeping even less than expected due to bombing raids, maximum output would be reached much earlier. German output probably would have increased with fewer work hours.
As seen in my previous post, the idea that the Germans worked much more than 48 hours per week may well have more to do with myth than fact.

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Re: Superior productivity of American industrial workers

Post by Richard Anderson » 13 Jul 2021 07:23

KDF33 wrote:
13 Jul 2021 05:44
Indeed. I meant that given that the Germans introduced in spring 1944 measures incentivizing working more than 48 hours a week, my assumption would be that a large part of the labor force worked no more than 48 hours a week until then.
Well, of course not, since I suspect you understand what an average is. A workweek goal might be 40 hours, 50 hours, 60 hours, or even 72 hours, however, many are going to miss working hours for one reason or another. Similarly, a work week may be legally constrained, to say 40 hours or 48 hours, with an allowance for more hours worked, but at a higher compensation, which is what that passage referred to. That an individual working more than 48 hours was compensated more tells us nothing about what the "standard" work week was, it only tells us what the threshold for greater compensation was.
Indeed, I've found some data pertaining to industry in general:

Image

Much like the latter '72-hour work week', it looks like the '50- to 60-hour work week' was more a slogan than a practical target.
Very nice.
For comparison's sake, across all U.S. industry the average work week was ~43 hours in August 1942.
The nearly complete monthly series is available from the U.S. BLS. Note the BLS data is for "workweek of production employees in manufacturing", so is probably as analogous as it is possible to get to "all industries" in your German table. To compare German/US we find:

March 1939 47.6/37.3
September 1939 47.8/38.1
March 1940 47.5/37.4
September 1940 49.2/39.0
March 1941 49.1/40.5 (April data)
September 1941 49.5/41.3
March 1942 48.7/42.8 (April data)
September 1942 48.7/43.2
March 1943 49.1/44.7
September 1943 47.9/45.6 (October data)
March 1944 48.3/45.2
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Re: Superior productivity of American industrial workers

Post by TheMarcksPlan » 13 Jul 2021 07:29

KDF33 wrote:
13 Jul 2021 05:46
TheMarcksPlan wrote:
13 Jul 2021 05:43
These are general figures. For a poorly-nourished workforce sleeping even less than expected due to bombing raids, maximum output would be reached much earlier. German output probably would have increased with fewer work hours.
As seen in my previous post, the idea that the Germans worked much more than 48 hours per week may well have more to do with myth than fact.
Indeed
https://medium.com/counterfactualww2
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Re: Superior productivity of American industrial workers

Post by historygeek2021 » 13 Jul 2021 13:07

KDF33 wrote:
12 Jul 2021 23:42

Actually, it's also in line with the time series for employment on airframes and engines:

Workers on engines, 1/1942: 194,000
Workers on airframes, 3Q43: 382,333 (average)
Workers on engines, 3/1944: 310,000

I don't see this breakdown in the link you gave. Can you show where this is specifically in your link?
KDF33 wrote:
12 Jul 2021 23:42
could you post a screen caption of the specific quote from DRZW, as well as the source quoted?
TMP has given screenshots for 2 of the GSWW cites. Here are the other 2. Volume V I/B, page 1086:
DRZW Vol V I B p 1086.png
Volume V II/B, page 852:
DRZW Vol V II B p 852.png
Note that USSBS gives an upper bound of 300,000 Germans employed in manufacturing anti-aircraft weapons and ammunition:
AA manufacturing employees.png
If we subtract that from the totals listed in USSBS Appendix Table 13, we have an estimate for the total manufacturing workforce building planes, weapons and ammunition for German aircraft, keeping in mind that this is only the "A" firm total.
KDF33 wrote:
13 Jul 2021 05:44

Indeed, I've found some data pertaining to industry in general:

Image

Much like the latter '72-hour work week', it looks like the '50- to 60-hour work week' was more a slogan than a practical target.
But see the explanatory note. This table is not representative of industries, such as aircraft, where a 72 hour work week was given a priority. GSWW Vol V II/A, page 424, describes the 72 hour work week as "the most important measure of all" in the 1944 aircraft production surge.
WW2 German workweek USSBS 199.png
Even if we use the German aircraft manufacturing figures in USSBS Table 9 as an upper bound, U.S. productivity is still well ahead and growing faster than Germany, even if we factor in a 25% loss of productivity in 1944 due to the dispersal of the German aircraft industry and don't take into account the longer German work week:
WW2 Aircraft Productivity USSBS Table 9 Figures.png
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Re: Superior productivity of American industrial workers

Post by historygeek2021 » 19 Jul 2021 17:23

Further evidence of superior American industrial labor productivity is found in an article cited in Harrison's Economics of World War II, p. 46, an article by Stephen Broadberry (linked below), author of the chapter on the British economy during WW2.

https://www.jstor.org/stable/2122639?re ... 7457445700

Broadberry gives the following chart, showing the relative manufacturing productivity of the USA, UK and Germany throughout the 20th century:
WW2 Labor Productivity Broadberry 1993 1.png
US manufacturing productivity was far superior to that of Germany throughout the 19th and 20th Centuries. Throughout the 2nd and 3rd quarters of the 20th Century, US manufacturing productivity was more than double that of Germany. Thus, this was not a temporary advantage of the United States or something that Germany could overcome within the time frame of WW2. The United States manufacturing sector was inherently twice as productive as Germany's.

The USA's productivity advantage was particularly pronounced in the production of metal products, where the USA was close to triple the productivity of Germany:
WW2 Labor Productivity Broadberry 1993 2.png
WW2 Labor Productivity Broadberry 1993 3.png
Note that US productivity figures for 1937 significantly understate what the US was capable of achieving due to the Great Depression. Broadberry notes on page 776 that US productivity soared during WW2 relative to the UK and Germany.

On page 785, Broadberry seems to accept the thesis that the USA's productivity advantage lay in its use of manufacturing processes that, by European standards, were "wasteful" of raw materials. The USA's superior endowment of natural resources allowed it to manufacture goods with little regard for how many raw materials were consumed in the process, whereas Germany and the UK were forced by their raw material constraints to adopt manufacturing processes that relied on skilled labor to carefully produce manufactured goods without wasting raw materials.
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Re: Superior productivity of American industrial workers

Post by TheMarcksPlan » 19 Jul 2021 22:11

historygeek2021 wrote:On page 785, Broadberry seems to accept the thesis that the USA's productivity advantage lay in its use of manufacturing processes that, by European standards, were "wasteful" of raw materials.
A call back to my first response in this thread:
TheMarcksPlan wrote:American productivity advantages were more in basic materials and transport, as I hope to show in further discussion as time permits.
...time hasn't permitted much TMP research for this thread, I'm free-riding on you and KDF33 dropping knowledge (trying to make it up elsewhere).

This is where total factor productivity ("TFP") comes into play: real economists would analyze labor productivity while attempting to control for the effects of differential capital and other input endowments. Tooze's article that I linked upthread does exactly that. We don't have time to be real economists here, so that's not meant as a critique of what has been an insightful thread.

As the Tooze article also notes, your Broadberry article sparked long-running scholarly debate over the thesis. I haven't read that debate; can't judge who's right. But we should note that Broadberry's findings have been challenged (I'm not even sure whether the challengers assert a higher or lower productivity differential than Broadberry).
historygeek2021 wrote:Broadberry notes on page 776 that US productivity soared during WW2 relative to the UK and Germany.
You're referring to this?:
. A further
widening of the gap occurred across World War II, followed by a
narrowing through to the 1980s.
Broadberry isn't a WW2 specialist despite his drive-by chapter on Britain in Economics of WW2. I doubt he knows as much as us about the particular circumstances of WW2 German industry (foreign labor substitution, bombing). So while the statement is true across World War II - i.e. comparing the late '30's and 1944-46 - it's certainly not intended by Broadberry to address the vast difference between '43 and '44 that KDF33 has quantified and plausibly explained.
https://medium.com/counterfactualww2
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Re: Superior productivity of American industrial workers

Post by historygeek2021 » 20 Jul 2021 04:08

TheMarcksPlan wrote:
19 Jul 2021 22:11

As the Tooze article also notes, your Broadberry article sparked long-running scholarly debate over the thesis. I haven't read that debate; can't judge who's right. But we should note that Broadberry's findings have been challenged (I'm not even sure whether the challengers assert a higher or lower productivity differential than Broadberry).
None of Broadberry's findings that are pertinent to this thread have been challenged. Tooze confirms that US labor productivity was much higher than that of Germany (p. 971). Likewise, U.S. capital productivity was much higher. Germany's relative labor productivity declined (Table 1), and the only reason it didn't decline more is because Germany made a disproportionately large investment in machine tools (p. 966). Meaning the United States also enjoyed an enormous advantage in capital productivity (Table 8). Therefore, the United States enjoyed a substantial lead in total factor productivity, for which Tooze never gives an absolute comparison (unlike Broadberry). Tooze compares the change in total factor productivity and finds that U.S. total factor productivity was growing faster than German total factor productivity.

In short, the U.S. held the advantage in every measure of productivity: labor, capital, and total factor. And the U.S. advantage in each category was growing relative to Germany.

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Re: Superior productivity of American industrial workers

Post by TheMarcksPlan » 20 Jul 2021 11:40

historygeek2021 wrote:Tooze confirms that US labor productivity was much higher than that of Germany (p. 971).
I wasn't claiming that Tooze's article challenges Broadberry's. Rather, Tooze's article points out that Broadberry's thesis sparked a long-running debate on the topic. Your 1993 article is only the first in a 15-year debate. Again, no idea how that debate plays out. I might get around to reading it; will report back if I do. Some of the relevant articles highlighted below:

Image

Earlier I raised the Tooze article as further evidence that the US mass production versus German craft production narrative (in WW2) must at least be complicated. Tooze's detailed description of machine tool stocks shows wartime convergence, albeit with German firms over-investing in general purpose machine tools as a likely hedge against postwar inflation, and perhaps in anticipation of postwar return to normal capital patterns.


historygeek2021 wrote:The USA's productivity advantage was particularly pronounced in the production of metal products, where the USA was close to triple the productivity of Germany:
Table 6 gives US:UK ratio of 289.1 in 1935/7; Table 7 gives a Germany:UK ratio of 119.7. Therefore a US: Germany ratio of 2.42.

---------------------------------

A data set that doesn't cover WW2 - i.e. Broadberry's - will not tell us anything that happened during WW2. As the Broadberry article compares the late '30's and mid '40's, it misses intrawar patterns entirely.

KDF33 has produced compelling evidence that Germany:US labor productivity varied enormously during the war; his data show Germany:US productivity ratio varying between .90 (Feb '43) and .33 (Feb '44). If KDF33's trend is correct, as well as Broadberry's post-WW2 ratio of 2.42, then midwar German productivity was up to ~88% of American ( .33 / .9 * 2.42 ). KDF's data endpoints align very neatly with Broadberry's immediate postwar numbers.

You don't need to agree with KDF33's absolute values to recognize the existence of massive variance and a remarkable trend here. A factor that, again, Broadberry's article/data can't even claim to address.

Is there a plausible story that explains KDF33's picture of German productivity converging towards American during midwar, then rapidly plummeting in ratio to US? Yes, absolutely there is:

Pre- and postwar America did what it did better than anyone: it mass-produced consumer goods like cars and refrigerators that were relatively simple, large, and expensive. Wartime America, however, lost part of its comparative advantage when it switched to relatively sophisticated military/producer goods like airplanes and ships, for which mass production is not ideal. This caused US-Germany productivity convergence that is apparent in mid-war stats. From early '43 onwards, however, bombing effects and labor force degradation caused German productivity to plummet, relative to American (and in the aircraft case, a German shift to fighters in '44 further complicates the data). By war's end, these dynamics had caused Germany to lose her relative wartime productivity gains.

Do I think 88-90% of American productivity is the "true" German norm? No, that's probably a bit high. German factories were farther along the learning curve at the early '43 relative peak than were American. But very clearly 30% or 40% German "true" wartime productivity is too low.

TMP bookmark: German/US productivity: intrawar versus peacetime differential
https://medium.com/counterfactualww2
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