Meta tags:
Headings (most frequently used words):
december, 2017, the, sunday, productivity, saturday, friday, thursday, wednesday, tuesday, monday, and, labor, new, arthurian, economics, it, compensation, early, years, share, since, debt, accumulation, google, translate, blog, archive, links, labels, 31, 30, 29, 28, 27, 26, 25, 24, 22, 21, 20, 19, 18, 17, 16, 15, 14, 13, 12, 11, 10, best, thing, milton, friedman, ever, wrote, excessive, finance, not, subtle, at, all, really, anyway, caught, you, mind, works, in, mysterious, ways, such, brilliance, yet, so, down, to, earth, on, protectionism, vigor, business, sector, price, indexes, first, take, had, thought, exploring, where, do, they, get, those, numbers, reversal, of, fortune, intuitive, but, only, after, saw, when, pay, gap, 1988, recommended, reading, steve, denning, well, that, was, quick, twin, peaks, quantum, unemployment,
Text of the page (most frequently used words):
the (721), and (234), that (146), graph (140), compensation (135), #productivity (83), for (81), labor (79), inflation (73), business (71), you (69), share (69), but (61), output (59), are (55), gap (55), data (54), not (54), this (48), line (46), blue (46), sector (46), price (45), can (44), from (43), red (42), real (41), what (38), see (35), lines (35), december (34), all (33), after (33), debt (33), there (32), has (32), index (32), they (31), than (31), was (31), two (31), per (31), get (31), year (30), know (29), between (29), how (28), then (28), years (28), like (27), more (27), with (27), arthurian (26), don (26), 2017 (26), have (26), hour (26), because (25), one (24), since (24), noah (24), 100 (24), fred (23), comments (23), look (23), shows (23), posted (22), start (22), 1980 (22), values (21), 1947 (21), nominal (21), percent (20), indexes (20), when (19), about (19), both (19), indexed (19), same (18), show (18), recession (18), behind (18), around (18), base (18), trend (17), numbers (17), way (17), time (17), economic (17), measure (17), been (16), say (16), may (16), much (16), just (15), series (15), growth (15), before (15), level (15), other (15), looking (15), nonfarm (15), dollar (15), gdp (14), green (14), now (14), will (14), where (14), down (14), together (14), had (14), only (14), cost (14), ratio (14), reich (13), new (13), problem (13), increase (13), early (13), change (12), got (12), right (12), current (12), should (12), calculation (12), def (12), graphs (11), first (11), them (11), which (11), looks (11), does (11), 1970 (11), higher (11), 1961 (11), date (11), january (11), why (10), would (10), even (10), sure (10), october (10), out (10), back (10), those (10), thing (10), value (10), money (10), using (10), farm (10), want (9), unemployment (9), here (9), some (9), were (9), reagan (9), going (9), interesting (9), yet (9), 1973 (9), put (9), different (9), 2009 (9), due (9), policy (9), february (9), march (9), april (9), june (9), july (9), august (9), september (9), november (9), run (8), did (8), thought (8), sudden (8), think (8), stark (8), divergence (8), maybe (8), white (8), stripe (8), used (8), number (8), difference (8), figured (8), changed (8), reals (8), these (8), decline (8), flat (8), during (8), rate (8), cpi (8), make (7), law (7), dots (7), high (7), robert (7), good (7), while (7), nothing (7), any (7), falling (7), his (7), also (7), kink (7), 1960 (7), 2000 (7), relative (7), long (7), set (7), take (7), adjusted (7), their (7), nominals (7), better (7), 1955 (7), pce (7), identical (7), always (6), anyway (6), yeah (6), left (6), low (6), something (6), doesn (6), economy (6), again (6), people (6), forces (6), says (6), opens (6), exactly (6), subtract (6), into (6), little (6), non (6), almost (6), figure (6), gone (6), downhill (6), component (6), prices (6), use (6), compare (6), employment (6), might (6), differences (6), less (6), samuelson (6), solow (6), louis (5), posts (5), units (5), quarterly (5), best (5), saw (5), over (5), source (5), coincidence (5), well (5), really (5), 2010 (5), goes (5), great (5), wages (5), falls (5), cause (5), could (5), part (5), size (5), didn (5), art (5), until (5), sets (5), divide (5), multiply (5), removed (5), hours (5), lower (5), runs (5), sometimes (5), push (5), deflator (5), 1954 (5), generally (5), fallen (5), economics (5), credit (5), spending (5), fed (4), federal (4), call (4), shape (4), too (4), quantum (4), income (4), peaks (4), sunday (4), economist (4), reading (4), very (4), end (4), expect (4), smith (4), tell (4), questions (4), started (4), case (4), beginning (4), 1997 (4), wiggle (4), begins (4), result (4), perhaps (4), point (4), close (4), keep (4), find (4), off (4), recent (4), quarter (4), acceleration (4), thereafter (4), earlier (4), excel (4), anything (4), pretty (4), blog (4), war (4), pay (4), rather (4), said (4), economists (4), question (4), gets (4), equal (4), few (4), cross (4), mean (4), example (4), uses (4), version (4), add (4), nice (4), measures (4), things (4), latter (4), 1990s (4), dpd (4), rising (4), 1950s (4), took (4), made (4), remember (4), purple (4), parallel (4), ignored (4), read (4), issue (4), curve (4), important (4), pinned (4), evidence (4), domestic (4), ever (4), protection (4), wrote (4), reserve (3), bank (3), okun (3), comes (3), works (3), duplicate (3), starts (3), second (3), cluster (3), overlap (3), makes (3), looked (3), columns (3), enough (3), hover (3), saturday (3), century (3), running (3), goldilocks (3), monday (3), steve (3), denning (3), stock (3), rule (3), firms (3), tuesday (3), most (3), three (3), soon (3), big (3), 90s (3), wednesday (3), article (3), sense (3), term (3), changes (3), sees (3), rises (3), possibly (3), 1962 (3), another (3), upward (3), trends (3), times (3), thinking (3), related (3), our (3), views (3), seen (3), institute (3), based (3), policies (3), original (3), match (3), far (3), once (3), matter (3), whatever (3), bigger (3), seem (3), faster (3), late (3), moved (3), 1970s (3), 1960s (3), added (3), present (3), partly (3), image (3), picture (3), world (3), five (3), actually (3), already (3), wrong (3), thursday (3), labels (3), calculating (3), idea (3), friday (3), yesterday (3), answer (3), mind (3), percentage (3), calculated (3), pick (3), whole (3), except (3), cannot (3), give (3), zero (3), called (3), otherwise (3), changing (3), false (3), words (3), still (3), updates (3), everything (3), along (3), below (3), financial (3), subtracted (3), shift (3), greater (3), population (3), near (3), google (3), separate (3), slightly (3), caught (3), wonder (3), increases (3), notice (3), cut (3), above (3), default (3), your (3), measured (3), creeping (3), relentlessly (3), similar (3), create (3), gaps (3), exaggeration (3), vigor (3), corporations (3), allowed (3), its (3), keynes (3), claim (3), official (3), subtle (3), tax (3), milton (3), friedman (3), timeline (3), crisis (3), page (3), 2016 (2), appear (2), org (2), newer (2), unit (2), horizontal (2), axis (2), duplicated (2), color (2), dark (2), middle (2), noticed (2), probably (2), next (2), rounded (2), decimal (2), place (2), top (2), total (2), biggest (2), twin (2), quick (2), 1982 (2), illegal (2), administration (2), creates (2), opened (2), recommended (2), jiggy (2), went (2), getting (2), 2001 (2), minute (2), mid (2), 1988 (2), puts (2), ask (2), short (2), rise (2), longer (2), pushing (2), come (2), solution (2), phase (2), mark (2), shortly (2), brief (2), dip (2), neck (2), stage (2), third (2), occurred (2), visible (2), heard (2), million (2), conclusion (2), upon (2), evaluation (2), gaining (2), fall (2), appears (2), others (2), preservation (2), reason (2), evaluate (2), thinkin (2), lot (2), matched (2), showed (2), revision (2), comparable (2), narrow (2), simple (2), especially (2), obviously (2), later (2), hey (2), easy (2), consistent (2), surge (2), stable (2), revolution (2), troublesome (2), workers (2), larger (2), links (2), done (2), employee (2), guess (2), happens (2), intuitive (2), reversal (2), fortune (2), couple (2), days (2), ago (2), actual (2), away (2), seems (2), work (2), every (2), calculate (2), huh (2), worked (2), leave (2), gives (2), cancels (2), comp (2), remains (2), definitely (2), note (2), sound (2), guys (2), confused (2), dad (2), being (2), life (2), haven (2), discussed (2), day (2), exploring (2), indexing (2), interest (2), happening (2), prevent (2), slowed (2), contrast (2), gonna (2), link (2), four (2), separation (2), upper (2), demand (2), aside (2), moving (2), areas (2), lowest (2), problems (2), focus (2), following (2), korean (2), 60s (2), view (2), window (2), arithmetic (2), rates (2), context (2), against (2), relevant (2), consumer (2), 1953 (2), 1956 (2), responsible (2), paper (2), phillips (2), relation (2), period (2), remind (2), convert (2), opening (2), marks (2), dates (2), wait (2), pinning (2), impression (2), correct (2), fact (2), additional (2), story (2), post (2), twice (2), either (2), average (2), factors (2), free (2), chosen (2), deflated (2), comparison (2), click (2), bite (2), full (2), must (2), equilibrium (2), 1936 (2), fiscal (2), controversy (2), concession (2), classical (2), school (2), cure (2), fallacy (2), account (2), believe (2), protectionism (2), activity (2), such (2), brilliance (2), earth (2), mysterious (2), ways (2), peterson (2), banks (2), excessive (2), finance (2), french (2), intentions (2), 2018 (2), taxes (2), sumner (2), household (2), loops (2), laffer (2), krugman (2), jerry (2), historical (2), banking (2), expectations (2), civilization (2), 2013 (2), dave (2), ross (2), translate (2), html (2), blogger (2), john (2), charts (2), pdf (2), lotteries (2), adam (2), venn (2), rights, reserved, courtesy, http, research, stlouisfed, fred2, lead, horse, water, him, drink, stay, thirsty, friends, subscribe, atom, home, older, duplicator, automatic, process, unrate, black, ignore, fit, satisfied, faint, elsewhere, odd, arranged, blank, space, leap, spaced, damn, decide, wikipedia, mere, last, earners, nation, peaked, 1928, 2007, preceding, downturns, cnbc, prior, large, buybacks, constituted, obvious, manipulation, sec, introduced, 10b, safe, harbor, buy, many, shares, effectively, floodgates, 1995, happen, else, 1991, fat, spike, bloomberg, interpret, boosting, disagrees, title, cites, study, correlation, tend, direction, leads, doors, lagging, indicate, 1972, least, ran, slows, accelerates, mouse, surely, double, speak, imposed, intrudes, unbiased, shown, explain, plainly, moment, influenced, found, indeed, pointing, finger, locating, evaluates, ourselves, thank, defending, ronald, growing, according, examine, wasn, throw, darts, blindfolded, neither, ends, 300, 500, wedge, slowly, wider, eyes, hand, blame, nor, dramatic, contrary, claims, pace, constant, difficult, 1980s, continuous, slowdown, begin, 80s, began, discover, epi, colors, attempt, 1979, supervisory, increased, stagnated, continued, grow, deliberate, adopted, ritholtz, york, terms, grown, factor, tripled, pudding, eat, yer, meat, improvements, translated, making, efficient, produce, starting, versus, decided, aggregate, totals, switched, love, purchase, useless, tells, learned, taking, takes, duh, exact, harmless, course, anymore, name, sounds, past, plot, six, ridiculous, capital, means, arbitrary, choice, let, ain, nothin, onto, topic, comparing, distorts, remove, okay, explicit, inflating, discovered, eyeball, compatible, neighborhood, hard, hate, bunched, deceiving, whine, lost, 1913, repeatedly, blur, sorry, young, guy, born, perspective, greatest, generation, screwed, stopped, somewhere, suggests, spent, suggest, quantities, remarkably, straight, gotta, produces, adding, circles, circle, return, needed, rapidly, returning, decade, fell, required, abnormally, rapid, slow, sufficient, besides, slept, figuring, combining, user, defined, settings, circulating, indicator, bit, suppose, certainly, grows, googled, wanted, job, conceptually, mathematically, distracted, through, somebody, profit, messed, progress, catching, saying, fascinates, science, advances, stop, wondering, lists, compares, midway, solve, jumps, nowhere, died, nicely, schedule, 1974, plus, 1967, fascinated, true, coming, closed, scooted, imagine, react, portion, told, frequency, division, finally, order, export, receive, purchases, mostly, stands, hold, overall, immediately, attributed, government, similarly, 1951, extremely, move, reaching, transition, touching, essentially, costs, excluded, held, table, published, widely, american, review, causes, matters, discussion, frequently, presented, exploitable, hence, played, role, development, inflationary, hardly, addressing, explanation, particularly, implications, macroeconomics, mild, though, anxiety, james, forder, hint, knee, jerk, reaction, yes, converts, guaranteed, ratios, simpler, explains, never, screams, wouldn, able, edge, under, letting, rest, expand, familiar, expanding, roughly, closes, rid, gathered, effect, purpose, expands, calculations, neat, tidy, bring, combined, often, instead, particular, strikingly, goal, reach, exaggerate, extent, whether, eliminates, potential, without, thirds, count, inequality, aspirin, please, feel, check, scale, defaults, correctly, become, slavery, own, try, nations, learn, provide, themselves, attain, need, country, neighbours, fairest, quote, myself, lately, 1923, faithful, pupil, who, doubt, taught, entertained, reserves, arguments, securing, possible, improbable, advantages, involves, protectionist, grossest, crudest, form, mercantilist, theory, intelligible, available, brought, nonsense, absolutely, overwhelming, complete, domination, future, control, system, quantity, opinions, differ, scribble, corner, eye, footnote, describes, contradict, describe, embedding, lie, inconsistent, fivethirtyeight, pixels, rightmost, dot, gop, corporate, pierre, pont, deputy, nemours, national, assembly, speaking, proposal, fiat, gentlemen, disagreeable, custom, easily, led, harshness, discussions, assume, evil, necessary, gracious, assignats, mischief, epilogue, copyright, arthur, shipman, zoho, withering, shoots, waste, fraud, abuse, verdoorn, urgency, unsustainable, umic, ulc, tot, tongue, cheek, tint, knob, supply, side, transaction, taylor, symmetry, deception, stimulus, star, trek, standard, deviation, stagflation, spreadsheeting, special, report, slack, simulated, simulacron, serfdom, sequence, scott, reviews, reduction, writing, printing, controls, predicting, pfi, parameters, oil, linear, tools, motives, multiplier, mmt, military, medium, math, fekete, malaise, variable, limits, ego, captain, introduction, iceberg, couldn, sleep, humor, craft, hodrick, prescott, hoarding, revisionism, calc, gross, gresham, gold, shortage, gds, gang8, fun, mpc, disclosure, era, fpi, forget, digit, financialization, final, feedback, fcm, composition, failure, embrace, evolution, excuse, erosion, eroc, echoes, disarray, pull, deflation, outside, limit, reissue, investment, inside, general, bad, bulge, recovery, debasement, cycle, chronicles, efficiency, coping, coinage, civ, wealth, bullard, earthquake, downs, behavioral, finte, artish, adjusting, accidental, discoveries, accelerated, repayment, argument, 400k, smoothing, 1986, 1966, contact, website, stuff, tufte, analysis, normalized, scaled, mental, workout, numerical, ignorance, kardi, teknomo, jim, organize, supreme, court, jester, prac, vin, faq, bloogger, within, codes, sentral, test, help, www, schools, menu, host, tips, spoiler, theory2life, irrational, unsettling, broad, oak, redonomics, margin, old, freshman, dolor, rants, dredd, mayday, books, jbpeebles, truth, addicts, anon, frozen, arctic, tundra, blended, candid, action, nextblog, skeptical, optimist, worthwhile, canadian, father, tim, duy, cybereconomics, crises, businomics, ecometry, william, hummell, flavianopolis, aquinum, razor, crystal, bull, williams, sgs, econompic, secret, wieczorek, perot, historicalstatistics, sources, irs, corp, 2006, usgovernmentspending, economagic, flow, funds, bls, jobs, bea, accounts, measuringworth, statistical, abstracts, gavin, kennedy, mason, paul, pages, scribd, 361, 571, 2011, 476, 2012, 412, 374, 2014, 283, 2015, 318, jean, baptiste, borio, orbit, incompatible, ricardo, caugh, 274, archive, versions, model, showing, accumulating, hurts, mine, brings, preview, template, button, open, introductory, googledocs, file, stand, alone, php, accumulation, unusual, mess, overview, download, death, recommendations, surprising, econcrit, challenging, premisses,
Text of the page (random words):
al red and real blue indexed to 1947 q1 on the red line the circle shows the increase of labor share during the goldilocks of the latter 1990s and the return to trend after 2000 point of interest on the blue line the ratio of reals labor share does not increase it only runs flat so whatever it was that was happening in the latter 1990s that s what was needed to prevent the decline of labor share what was happening in the latter 90s debt per dollar dpd was rising rapidly returning to trend after a decline early in that decade graph 2 debt per circulating dollar below trend in the 1990s the ratio is an indicator of financial cost in the economy as a whole as soon as dpd got back to trend in 2000 the rate of increase slowed as soon as the rate of increase slowed labor share fell what these graphs tell me is that by the 1990s our economy required an abnormally rapid increase in debt to prevent labor share from falling in the 1950s by contrast a very slow increase in debt was sufficient to keep labor share running flat and at a high level besides i m gonna have to look into that i took the dpd ratio blue on graph 2 made it green and put it on the graph with real and nominal labor share so you can get a better look graph 3 combining graphs 1 and 2 the link gets you the series data but fred can t remember user defined line settings oh and by the way i slept on it i don t see anything wrong with figuring labor share as a ratio of reals posted by the arthurian at 4 00 am 0 comments monday december 18 2017 exploring labor share to figure labor share they take compensation divide it by current dollar output and multiply by 100 this is what labor share looks like graph 1 labor share red and the calculation that produces it blue pretty huh except it s going downhill but hey you ain t seen nothin yet i got onto this topic a few days ago after looking at productivity and compensation productivity is output per hour worked it is a way to evaluate economic growth because it is a way to look at growth the output number has to have the inflation component removed otherwise if prices are changing you get a false reading of how much the output component actually changed hours are hours inflation doesn t make the hours worked number different but compensation is money if we are using real output to figure productivity and we are comparing it to compensation then the compensation number also has to have the inflation component removed otherwise inflation distorts the result but you don t always have to remove the inflation component labor share for example is not a measure of economic growth so it is okay to leave inflation in the numbers used to calculate labor share as long as you leave it in both compensation and output fred uses the words current dollar output in graph 1 to make it explicit that the data is a nominal series and the inflation component has not been removed compensation the other series used in the calculation is also nominal the version of that series that has the inflation component removed would be called real compensation if fred had that series they do have real compensation per hour data sets anyway i started out looking at productivity and compensation where inflation adjusted data is used then i changed to nominal inflating data and discovered that compensation relative to output gives me labor share so now i m looking at labor share and i want to see how it looks if i use inflation adjusted data for the calculation i still can t find a business sector real compensation series at fred but i can make one i can take their real compensation per hour series and divide it by compensation per hour to get a price index for the compensation data then multiply by compensation to get real compensation hours cancels hours comp cancels comp and what remains is real compensation then divide that by real output to get the inflation adjusted version of labor share graph 2 real inflation adjusted labor share calculated as business sector real compensation per hour business sector compensation per hour business sector compensation business sector real output you were looking for downhill there s downhill for ya you can eyeball it and see that i got a value of 1 0 for the base year 2009 that s because i didn t multiply by 100 because you know you multiply by 100 to get percent and labor share is definitely not percent as we discussed the other day but i can multiply it by 100 to make my number compatible with fred s labor share then i ll add fred s series to the graph in red so we can compare the two graph 3 labor share red and real labor share blue nice huh now you can see what downhill really looks like the ratio of reals is not the same as the ratio of nominals because in the business sector numbers the inflation measures for compensation and for output are not the same note that the two lines cross in the base year 2009 at the level 100 or in that neighborhood it s hard to see exactly but you know this is why i hate those updates they do every few years where they change the base year to a more recent date everything after the base year on graph 3 is all bunched together the blue is not any lower than the red really at the end the years after 2009 but it has to be lower because it falls more the graph is deceiving yeah now i sound like those guys that whine about how much value the dollar has lost since 1913 but you just don t get a good picture when the base year is repeatedly changed to a more recent date maybe that s why those updates are done to blur the picture and keep us confused oh art that s not a nice thing to say maybe they do the updates because they are confused sorry that s as nice as it gets i m going to index these two data sets using the data start date as the base year so they will start out the two lines together at the 100 level and what happens after that well we ll see the start date for these data sets is january 1947 back then my dad was a young guy getting his start in the world and i was still a couple years away from being born the graph will show things from my dad s perspective how things changed since that early point in his life the graph shows how the greatest generation got screwed it shows a 50 year decline of labor share that could and should have been stopped somewhere along the way graph 4 labor share nominal red and real blue indexed to 1947 q1 it s interesting i think that the real line the blue line suggests that the decline in labor share definitely started in 1961 some people say the red line shows no decline until 1970 some say labor share was flat until around 2001 those guys are 40 years off i spent a lot of time on this real labor share thing i don t mean to suggest that labor share should be figured using inflation adjusted quantities i haven t yet had so much as a thought about that i m just looking to see how things look the blue line shows a decline with a remarkably straight trend that s gotta mean something but again i haven t yet had so much as a thought posted by the arthurian at 4 00 am 0 comments sunday december 17 2017 labor share where do they get those numbers so i can answer a question that s been in the back of my mind for a long time now why is labor share more than 100 it s not percent art it s an index yeah i know but how did it get so high it s useless it tells me labor share is going down but it doesn t tell me what the share is the share that labor gets it should be a percentage it s not i know but it should be so where do they get those numbers labor share as i learned a couple days ago is calculated by taking compensation as a percent of current dollar output it is a percentage see i was right it has to be a percentage but the thing is it takes one set of indexed values as a percent of another set of indexed values indexed values are not the actual values indexed values are like a price index duh art they pick one year to be the base year and they figure all the values as a percent of the base year value so right away when they do that the actual values are gone you get a line on a graph that is the exact same shape you get from the original values but the whole shape has been moved up or down until the base year value is equal to 100 seems harmless right except of course the original numbers are gone so you cannot look at labor share and find compensation as a percent of current dollar output because you don t have those numbers anymore the name labor share sounds like it would give you compensation as a percent of current dollar output but it doesn t work that way when they pick a year to be the base year something they do again every few years they pick a date from the recent past an arbitrary choice let s say then they re figure the data for all the years so that the new base year gets the value 100 all the numbers get changed one thing that s for sure is that the base year value is 100 if you have two data sets like compensation and current dollar output you can be sure that when you plot them on a graph the two lines will cross in the base year because both data sets have the value 100 for the base year i don t know what compensation is as a percent of current dollar output maybe it s 80 maybe it s six but i know for sure that compensation is going to be 100 of current dollar output in the base year of a graph because the numbers are indexed and the base year values are equal it s ridiculous to think that compensation and output are equal that would mean labor share is 100 and capital share is zero and i m sure that s not the case but that s all we can get from the indexed series called labor share that s all we can get even if we go back to the data that is used to calculate labor share because that data is indexed too so anyway we know that labor share is compensation as a percent of current dollar output except the two lines cross at the 100 level in the base year we also know that labor share has been going downhill for a long time labor share goes downhill for a long time and then the lines cross at the 100 level so that means labor share has to be higher than the 100 level in the years before the base year and sure enough it is posted by the arthurian at 4 00 am 2 comments labels calculating labor share saturday december 16 2017 reversal of fortune yesterday looking at compensation and current dollar output for the business sector i said we are looking at income and cost i was thinking of compensation as income and the purchase of output as a cost i m pretty sure economists have it the other way around posted by the arthurian at 4 00 am 0 comments friday december 15 2017 intuitive but only after i saw it starting with the productivity versus compensation thing i decided to look at aggregate totals rather than per hour numbers and switched from real to nominal data we re not looking at growth now but we are looking at income and cost i figured compensation as a percent of current dollar output guess what it looks like labor share graph 1 compensation as a percent of output nominal business sector index values exactly like labor share graph 2 the graph 1 data blue and labor share red i had no idea i love it when that happens posted by the arthurian at 4 00 am 0 comments labels calculating labor share thursday december 14 2017 since when the productivity pay gap noah smith at bloomberg workers get nothing when they produce more wrong noah shows this graph graph 1 employee compensation is falling behind already by 1962 noah s article is about the way people interpret the graph as he puts it some people see compensation falling behind output and ask if productivity improvements don t actually get translated into wages what s the point of making the economy more efficient they say the graph shows there is no sense in boosting productivity noah disagrees as you can tell from the title of his article he cites a study that looks at short term changes and sees a correlation between productivity and wages when productivity rises wages also tend to rise but over the longer term compensation falls behind productivity because of forces pushing in the other direction he says that s interesting it leads to questions what forces and why and what can be done about this it opens doors before we come up with a solution to the problem of lagging compensation we have to know the cause of the problem we don t yet know the cause we don t even know when the problem started so how can we know the cause if you don t know when the problem started how can you possibly know the cause and if you don t know the cause how can you possibly know the solution how can you have any pudding if you don t eat yer meat when did the problem start noah doesn t say since the end of world war ii productivity in terms of economic output per hour has grown by a factor of five while compensation has only tripled since 1980 the divergence has been especially stark more stark divergence may indicate a new phase but does not mark the start of the problem in any case on noah s graph i don t see a more stark divergence beginning around 1980 i see a kink in both lines shortly after 1972 and a kink in both lines around 1997 nothing around 1980 other than a brief dip in productivity not even a wiggle in compensation look at the graph it looks to me that for noah s data at least productivity and compensation ran neck and neck from 1947 to just before 1962 call it 1960 a gap opens after 1960 this is where the problem begins not 1980 there is a kink around 1973 and then compensation slows more than productivity maybe the second stage of the problem begins in 1973 there is another kink around 1997 after which productivity accelerates upward and compensation does not this would be the third stage if you hover a mouse over graph 1 you will see the trends i m looking at around 1980 or 1982 there is nothing but a wiggle in productivity which is surely the result of the double dip recession that occurred at that time no wiggle is visible in the compensation data for those years perhaps noah sees stark divergence since 1980 because he has heard people speak of it a million times or perhaps he is thinking of this graph from robert reich graph 2 source the preservation institute blog ritholtz at the big picture shows this graph as part of a larger image and links to an article by robert reich at the new york times reich puts a white stripe down the graph at 1980 the white stripe is a conclusion imposed on the data a conclusion that intrudes upon unbiased evaluation the data on robert reich s graph is not the same as that shown on noah smith s graph yet both graphs show productivity and compensation running together from 1947 to about 1960 and productivity gaining on compensation since that time you could say that robert reich put the white stripe at the point where compensation peaks and starts to fall this would explain why the white stripe appears at 1980 but by 1980 compensation had been falling behind pro...
|
