Academic journal article Monthly Labor Review

Productivity Trends: Prepared Fish and Seafoods Industry

Academic journal article Monthly Labor Review

Productivity Trends: Prepared Fish and Seafoods Industry

Article excerpt

Fish and seafood products are enjoying a surge of popularity with consumers in the marketplace. However, the benefits of this rise have yet to be reflected in the long-term productivity growth rates of the prepared fresh or frozen fish and seafoods industry.(1) Productivity, as measured by output per hour, declined at an average annual rate of 0.9 percent per year during the 1972-90 period. Limited technological diffusion and difficulties associated with processing perishable, highly variable, and seasonal products have contributed to productivity declines in this industry.

The productivity indexes represent the change over time in the ratio of the weighted output of a specified composite of products to the employee hours expended on that output. The output and employee hour series that underlie the productivity measures for the prepared fresh or frozen fish and seafoods industry are based on data from the Bureau of the Census. A more complete description of the methodology used to construct these measures is contained in the appendix at the end of this article.

Trends in productivity

The industry' s annual average 0.9-percent decline in productivity reflects a 2.3-percent rise in output and a 3.2-percent increase in employee hours. (See table 1 .) Although the long-term productivity trend was negative, there was significant year-to-year variation. During the 1972-90 period, annual increases in productivity occurred in 8 years ranging from 0.2 percent to 13.5 percent. Productivity declines were registered in the remaining years, with the single largest decline occurring in 1979, when productivity fell 15.2 percent.

Many of the annual movements in productivity were associated with changes in output. In 7 of the 11 years in which output advanced, there were increases in productivity. Similarly, productivity declined in 6 of the 7 years that output fell. Additional factors that may have adversely affected productivity include: the small and fragmented nature of industry firms and the continued dependence on labor intensive techniques in some areas of production attributable to the complex handling requirements of some products.

Significant advances in productivity occurred, however, despite the long-term decline. Between 1986 and 1988, productivity grew at a rate of 3.9 percent per year, following large increases in demand. In an effort to capitalize on these increases, the industry attempted to boost sales further by responding to issues that might hamper future growth and by identifying opportunities for new growth. With the latest data indicating a continued slowdown in consumption and declines in productivity, these issues may be more relevant than ever.

Output and demand

The 2.3-percent annual increase in output between 1972 and 1990 in the prepared fresh or frozen fish and seafoods industry resulted from years of modest growth in demand. However, with per capita consumption of fresh and frozen seafood rising some 28 percent since 1982, recent output growth rates have exceeded the industry's long-term average. Nevertheless, continued growth may be jeopardized by concerns about safety, price, supply, and quality.(2)

Public concerns about the safety of consuming fish and other seafoods have recently arisen in response to a barrage of negative publicity about water pollution and the processing standards for seafood products.(3) These concerns may not be unfounded, with some evidence suggesting that fully three-quarters of all consumed seafood is not inspected.(4) To address this issue, industry members have proposed that a comprehensive safety inspection program, administered by a single federal agency, be created to replace the patchwork of programs that currently exists.

The new safety program would be based on a "hazard analysis critical control point" approach. In contrast to the traditional meat and poultry inspection system, in which an inspector continuously checks all facets of an operation, the new system would require monitoring only at those points where contamination is most likely to occur. …

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