Question

In the early 1990's Japan's Minister of Labor pointed to the fact that Honda could produce a Civic in Japan in 10.9 labor hours, while Ford used 16 hours of labor to produce one Escort and accused the American work force of being lazy and unproductive. This accusation by Japan's Minister of Labor concerned the stockholders of GM, Ford and Chrysler who already had experienced huge losses in the early 1990's.

However, if you consider the difference in wages between the autoworkers of Japan and the U.S.-the American auto workers earned an average of about $16 an hour while their Japanese counterparts earned an average of about $18 an hour---the accusation does not seem to be true. Discuss why the Japanese Labor Minister was wrong. In order to have a more analytical discussion, further consider that the rental rate of capital and the technology in the two countries were very similar

Answer 1

Ans. The Japanese Labor Minister Was wrong because statistics suggest that output per worker is still greater in America and one cannot determine the labor to be lazy on the fact that a car takes more time to build. We have to see other factors like : Output per worker , hours put in a day per labor etc and moreover the thing on which comparison is being made is also not uniform. Some people even argue that Japanese workers are forced to work for long hours and wages are also high but in US , it's not the case and labor productivity is the main concern. One more reason that shows the Japanese Labor Minister as wrong is that we are considering just cars and not the overall industries , so we can't say that the labor is lazy and unproductivity. Even quality of labor is not being considered.

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