The Council on Wage and Price Stability Has Not Stressed Productivity in Its Efforts To Reduce Inflation

Highlights

GAO reviewed how the wage and price standards administered by the Council on Wage and Price Stability could be modified to stimulate productivity. The review included a broader review of the Council's efforts to encourage productivity improvement as an anti-inflationary mechanism.

Recommendations

Matter for Congressional Consideration

Matter	Status	Comments
Congress should amend section 5 of the Council's enabling legislation to specifically require that the Council's periodic reports to Congress (1) identify actions the Council has taken and plans to take to focus attention on the need to improve productivity and to encourage private sector productivity as a means of reducing inflation, and (2) demonstrate what the Council has done to encourage and stimulate productivity through the wage and price standards.	Closed	Please call 202/512-6100 for additional information.

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Council on Wage and Price Stability	The Council on Wage and Price Stability should revise the standards to provide an exception from the pay standard for productivity programs that are documented to improve productivity at a rate equal to or greater than their costs in terms of increased payments to employees.	Closed Please call 202/512-6100 for additional information.
Council on Wage and Price Stability	The Council on Wage and Price Stability should prepare reports on particular productivity problems and recommend appropriate government actions. This would parallel the Council's work on government regulation.	Closed Please call 202/512-6100 for additional information.
Council on Wage and Price Stability	The Council on Wage and Price Stability should develop an agenda for the National Productivity Council citing specific ways federal agencies can encourage productivity as part of the effort to control inflation.	Closed Please call 202/512-6100 for additional information.
Council on Wage and Price Stability	The Council on Wage and Price Stability should revise the standards to provide an exception from the price standard to permit financing capital investment programs from profits or profit margin allowances in an amount no greater than the demonstrable increases in productivity.	Closed Please call 202/512-6100 for additional information.

Full Report

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Topics

Government Operations

Economic analysisEconomic growthEconomic indicatorsEconomic policiesEconomic stabilizationIndustrial productivityInflationPerformance measuresPrice regulationSalary increases