Reduce labor content. Compensation and wages paid to employ¬ees contribute heavily to the input factor in the productivity equation. Productivity therefore increases when the amount of human labor re¬quired to accomplish the task is reduced. One of the major driving forces behind automation is that it helps reduce the labor content in goods and services. For example, banks would have to charge more for their services if automatic teller machines had never been introduced. Another familiar example is that American automakers have been forced to reduce the la¬bor content in each car they build. To do otherwise would make competi¬tion with Japanese automakers even more difficult.
