>I'm engaged in a bit of a scuffle over productivity and wages. During this
>argument, I cited the statistics and conclusions made on
>http://www.panix.com/~dhenwood/Stats_earns.html.
Apologies for not having updated that page in a year. Too many things to do, not enough time.
>Below is a response from my opponent who, as I interpret it, is accusing the
>LBO of lying. Any light you could shed on his analysis would be appreciated.
> -mjs
>
>**********************
>The first thing I did was check what a 30 year .01% average increase would
>mean, compound interest wise. Unless my calculator has a large hole in it
>somewhere it predicts that if you earned one real dollar in 1970 then you
>would be earning $1014 real dollars today.
Eh? Either the calculator does have a hole in it, or Patrick McKenzie doesn't know how to operate it. If you earned one real dollar in 1970, then 30 years at 0.01% average annual increase would bring you to $1.003. To get from 1 to 1014, you'd need a compound annual growth rate of 26% over 30 years, which is even better than the stock market.
>Then I went over to the BLS (Bureau of Labor Statistics) to see if their
>original numbers bore out the authors claims. Some of the highlights (all of
>these data are in constant year 2000 real dollars, i.e. adjusted for
>inflation and all that jazz):
>
>Average hourly wage in private sector :
>
>Jan 1964, $2.32
>Jan 2001, $14.01
Actually it's $14.02, according to yesterday's revisions. And these numbers are nominal, not 2000 real dollars. But I guess he's just mysteriously preparing the ground for the mysterious calculations that follow.
>All of the following values adjusted w/ 1992 as the baseline 100.0:
>
>Productivity : 118.6
>Work Week duration : 100.9
>Compensation : 157.6
>
>For the non mathematically inclined, that means productivity increased by 20%
>in 8 years while wages and other compensation went up by half.
I have no idea where these figures come from or what they're supposed to represent, but perhaps I'm not among the mathematically inclined. Since both compensation and output are expressed hourly, the work week duration is irrelevant. Here are the BLS's actual numbers for all nonfarm business and for manufacturing (1992 = 100):
output per hour compensation
----------------- ---------------
all manuf'g all manuf'g 1964 60.6 47.4 69.8 71.3 2000 118.1 140.9 108.2 106.4 change 95.1% 197.3% 54.9% 49.2%
Clearly, productivity growth greatly outstripped compensation growth. And this definition of compensation includes fringe benefits, which have been greatly boosted by medical inflation. The numbers he cited above ($2.31 and $14.01) are just direct pay.
>Conclusion : Empirically deny all statements as they regard the last decade
>made by the Left Business Observer
Past decade? But he was just talking about 1964-2000.
> (and I'd do it back until 1960 except I'm
>bone tired of searching for data).
Oh, come on. It's not *that* hard. <http://146.142.4.24/cgi-bin/dsrv?pr>.
>Patrick McKenzie
So who is this McKenzie fellow, and why this badly ground ax?
Doug