# Basic Facts about Wealth and Poverty

Fellows, Jeffrey jmf9 at cdc.gov
Tue Jun 9 12:42:00 PDT 1998

---------- From: Doug Henwood To: lbo-talk at lists.panix.com Subject: Re: Basic Facts about Wealth and Poverty Date: Tuesday, June 09, 1998 12:25PM

Wojtek Sokolowski wrote:

>The second reason pertains to the numerator of the unemployment rate.
BLS
>uses headcount rather than full-time equivalent (FTE) to account for
>employment. That is, a person who is employed only 10 hours a week
counts
>the same as the one who is employed 40 hours a week. This, BTW, is a
>well-known weakness of the employment stats. Thus, significant
numbers of
>the under-employed can skew the employment rates upward, as compared to
the
>FTE approach.
Doug wrote:

The BLS publishes reams of data on part-time and multiple jobholding as well as hours worked.

Me:

Using wage and salary employment and hours data from the BLS and real GDP data from the bureau of economic analysis, I calculated real (1982\$) GDP/labor year from 1948 to 1996 (assuming 40 hours x 54 weeks = one labor year). Given some definition differences over time, real GDP/LY was \$55,571 in 1996, \$52,414 in 1990, \$48,524 in 1980, \$49,641 in 1973, and \$24,324 in 1948. If I haven't made any serious rookie mistakes, this suggests that GDP/labor year grew about 1% from 1990-96, .9% from 1980-96, 0.5% since 1973, and about 4.6% between 1948 and 1973.

I also did these calculations for persons with work experience. This accounts for persons working less or more than full-time, and those working only part of the year. Since my purpose was to calculate an age-specific GDP/person with work experience, I only have data for 1976-1996. AND since it is such a pain to age-weight the data, including using some assumptions about relative productivity, the following data are NOT age-weighted. For my project I wanted 1995 data, so that is the limit of my age weighting. Okay... in GDP/person with work experience was \$48,886 in 1996, \$46,068 in 1990, \$39,564 in 1980, and \$37,178 in 1976. For what it's worth, this works out to growth rates of about 1% (90-96), 1.5% (80-96), and 1.6% (76-96).

Comparing these data suggests people since the mid 1970s, that average annual hours are increasing faster than output per labor year. I believe this is a well known conclusion. Of course, this says nothing about earnings from work.

Jeff

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