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):
ces in the ignored areas once they stop being ignored it s where the interesting questions are i m wondering about the cost push inflation of 1955 57 and what i might find in the early years of the business sector output and compensation data my table of fred data lists both compensation per hour and real compensation per hour i can divide the nominal by the real to get a price index i wonder how that index compares to the cpi and the deflator and the new one pce graph 2 the business sector compensation price index blue and other price measures well that s interesting no match the business sector compensation measure falls about midway between the cpi red and the gdp deflator purple pce the new one runs lowest of all yeah that makes sense because we solve our economic problems by changing the way we measure them so you d expect the new measure of inflation to be the lowest one focus art the measure of inflation in business sector pay is different from the others i wonder what the rate of inflation looks like graph 3 the rate of inflation in business sector compensation there it is the inflation samuelson and solow were looking at 1955 57 inflation jumps to one percent per quarter four percent per year about out of nowhere after inflation had died down nicely following the korean war the great inflation shows up right on schedule compensation inflation increases beginning in the mid 60s and it peaks with the 1970 recession the 1974 recession and the 1980 recession plus you can see the near recession of 1967 in a brief sudden fall from the trend of increase it s all there all of it but like samuelson and solow i am fascinated by the inflation of 1955 57 i notice fred has data for both current dollar output and real output for the business sector so i can get another price index a business sector output price index i ll put that inflation rate on the graph along with business sector compensation inflation and again i ll cut off everything after 1970 to get a close up view of the early years graph 3 the rate of inflation in business sector compensation the first thing i notice is that after the 1954 recession output inflation went up earlier and faster than compensation inflation oh that s interesting if it s true i would expect to see on graph 1 that the output line rises relative to the compensation line coming out of the 1954 recession it does the output line was already above the compensation line during the 54 recession but the gap opened more in 55 the gap closed in 56 as compensation inflation scooted up to the 1 level so i can imagine that prices i e output prices were rising after the 54 recession and it took until 56 for wages to react i want to subtract compensation inflation from output inflation of the business sector this will show me the portion of rising business sector prices that is not due to labor i told ya the ignored areas that s where the most interesting questions are for both the business sector compensation price index and the business sector output price index i take the nominal data at fred and divide it by the inflation adjusted data i use the default units index 2009 100 and the default frequency quarterly after the division in the finally you can change the units of your new series part of the fred window i set the units to percent change in order to do more arithmetic after that i have to export the data to excel in excel i receive the quarterly inflation rates for business sector compensation and business sector output i subtract the compensation number from the output number this gives me the inflation in the price of business output which is not due to the cost of labor i put that on a graph then i go back to fred for the quarterly inflation rate as measured by the gdp deflator i add this to my graph in excel so i have a context something to compare against business non labor inflation here is the result graph 5 non labor inflation in the business sector the red line is the deflator it is a measure of inflation relevant to gdp as a whole by contrast the consumer price index cpi is more relevant to consumer purchases i don t want that narrow focus here the blue line is the inflation in business output with the inflation in employee compensation subtracted out of it what remains in the blue line is the inflation in business output which is not due to labor the blue line runs mostly below the red this stands to reason if only because labor cost inflation does not show up in the blue line in the early 60s for example the trends of red and blue run parallel with red a little higher then in the latter 1960s as the great inflation took hold business non labor inflation falls behind overall gdp inflation the first years on the graph show inflation immediately following the second world war the red runs much higher than the blue this could be attributed to government rather than business or labor similarly in 1951 52 the red runs extremely high related this time to the korean war now look at 1953 1956 in 53 the blue is flat at zero the red is flat and a little higher comparable to what we saw for the early 1960s then in 1954 and 1955 the lines move upward from the zero level reaching the 1 0 level the 1 0 level is 1 inflation quarterly or about 4 per year that s what samuelson and solow were looking at notice that during this transition the red and blue run together sometimes touching and sometimes even with the blue above the red there is essentially no gap between the lines during this time from before 1954 to after 1955 1953 q4 to 1956 q1 in other words during all of 1954 and all of 1955 business sector non labor inflation was responsible for inflation as measured by the gdp deflator labor costs are excluded from the calculation labor cannot be held responsible for the inflation of those years i think that s pretty interesting posted by the arthurian at 4 00 am 3 comments wednesday december 20 2017 productivity and compensation the early years the first take i put output per hour and compensation per hour two lines on a graph for both the business sector and the nonfarm business sector four lines total indexed all the lines to the start date 1947 q1 so they all start at the 100 level then i subtracted 50 from the nonfarm business numbers to shift them down a bit on the graph so we can compare productivity and compensation for the business sector blue and red to productivity and compensation for the nonfarm business sector green and purple graph 1 productivity and compensation 1947 1970 for business nonfarm business the separation between productivity and compensation is greater for the business sector than for nonfarm business in these early years and then i got distracted i suppose if you subtract nonfarm business from business you re left with farm business i have to look i should say first that i m not sure of this calculation business nonfarm business farm business it certainly seems right but it might be right conceptually and wrong mathematically i m only looking at this graph because i want to see what it looks like graph 2 productivity and compensation 1947 1970 for business farm business almost flat farm productivity and farm wages are almost flat well on graph 1 the lower lines are almost parallel to the upper lines if we subtract one from the other the result should be almost flat but does it make sense i don t think so i added population to the graph indexed it and moved it down near the farm productivity line population grows faster than my measure of farm productivity so that would mean farm employment would have to rise to keep up with demand but farm employment has gone down right i googled farm employment google thought i wanted a job posted by the arthurian at 4 00 am 1 comments tuesday december 19 2017 i had a thought yesterday i showed labor share and real labor share figured from inflation adjusted values together on a graph set equal at the start by indexing so we could compare the changes graph 4 from yesterday i m adding two circles to that graph graph 1 labor share nominal 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 ...
|
