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 1990s. 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