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):
thirtyeight the gop s corporate tax cut may not be as big as it looks whatever but they show this graph as you go from left to right along the horizontal axis the number of firms increases also the dots get bigger more pixels more firms i guess anyway what s the biggest rightmost dot banks we have more banks than anything posted by the arthurian at 4 00 am 0 comments friday december 29 2017 it s not subtle at all really and anyway i caught you the fed s inconsistent numbers at the peterson institute from the footnote cpi inflation has generally been slightly higher than pce inflation no that s not right cpi was the official measure until the year 2000 since the year 2000 pce has been the official measure the way one describes the difference between them must not contradict the change that occurred in the year 2000 if the cpi is generally higher than the pce and the official measure changed from the cpi to the pce then the correct way to describe the relation is to say pce inflation has generally been slightly lower than cpi inflation otherwise you are embedding a subtle lie into your story got that peterson posted by the arthurian at 4 00 am 0 comments thursday december 28 2017 the mind works in mysterious ways i caught this scribble out of the corner of my eye and it made me think of this posted by the arthurian at 4 00 am 2 comments wednesday december 27 2017 such brilliance yet so down to earth best of all that we should know the future but if not then if we are to control the activity of the economic system by changing the quantity of money it is important that opinions should differ j m keynes posted by the arthurian at 4 00 am 0 comments tuesday december 26 2017 on protectionism during the fiscal controversy of the first quarter of the present century i do not remember that any concession was ever allowed by economists to the claim that protection might increase domestic employment j m keynes 1936 got it now try a bigger bite during the fiscal controversy of the first quarter of the present century i do not remember that any concession was ever allowed by economists to the claim that protection might increase domestic employment it will be fairest perhaps to quote as an example what i wrote myself so lately as 1923 as a faithful pupil of the classical school who did not at that time doubt what he had been taught and entertained on this matter no reserves at all i wrote if there is one thing that protection can not do it is to cure unemployment there are some arguments for protection based upon its securing possible but improbable advantages to which there is no simple answer but the claim to cure unemployment involves the protectionist fallacy in its grossest and crudest form as for earlier mercantilist theory no intelligible account was available and we were brought up to believe that it was little better than nonsense so absolutely overwhelming and complete has been the domination of the classical school j m keynes 1936 and just one more bite but if nations can learn to provide themselves with full employment by their domestic policy and we must add if they can also attain equilibrium in the trend of their population there need be no important economic forces calculated to set the interest of one country against that of its neighbours posted by the arthurian at 4 00 am 0 comments monday december 25 2017 q if corporations are people and slavery is illegal then why are corporations allowed to own other corporations posted by the arthurian at 4 00 am 2 comments sunday december 24 2017 vigor fred says posted by the arthurian at 4 00 am 1 comments friday december 22 2017 business sector price indexes this graph from 18 december shows real and nominal labor share does it remind you of anything graph 1 labor share nominal red and real blue indexed to 1947 q1 hint it shows a gap that opens in 1961 and increases relentlessly in size thereafter you got it we see the same gap between productivity and compensation graph 2 real output per hour blue and real compensation per hour interesting i wonder why that is on graph 1 the red line labor share in the business sector shows compensation relative to output the blue line shows the same the only difference is that the red line is a ratio of nominals and the blue is a ratio of reals if you have a knee jerk reaction to this it is probably that the ratio of nominals and the ratio of reals should be identical i ve seen it said about debt to gdp for example that the ratio of nominals and the ratio of reals are identical sometimes yes sometimes no for debt relative to gdp the ratio of reals and the ratio of nominals are identical if you use the same calculation for debt as for gdp the calculation that converts nominal values to reals but if you use one calculation to convert gdp to real values and some other calculation to convert debt you are almost guaranteed to get ratios that are not identical something even simpler explains the difference visible on graph 1 real output and real compensation are figured using different price indexes here are the price indexes for business sector output and business sector compensation graph 3 business sector price indexes for compensation blue and output red the compensation index is higher than the output index and comes down more when deflated i didn t know i never saw them before but the two price indexes had to be different the arithmetic screams it why different indexes are used i wouldn t know you d have to ask an economist on graph 3 you can see a gap opening between the lines in the 1970s and you might be able to see the upper edge of the blue line creeping out from under the red line some time around 1970 to get a better look at what is going on i took graph 3 and cut off everything after 1970 letting the rest expand graph 4 the business sector price indexes 1947 1970 it is easy to see now that the gap between the red and blue lines goes all the way back to 1962 and again you can see the blue line creeping out from behind the red this time during the 1960 61 recession call it 1961 that year sound familiar 1961 is also the year that marks the start of the gap between real and nominal labor share on graph 1 above and 1961 marks the start of the gap between productivity and compensation on graph 2 all these graphs show a gap opening in 1961 and expanding relentlessly thereafter i will come back to this thought shortly for all these graphs i indexed both lines on their start values so we can see how things change from the beginning economists don t seem to get that if you don t index em on their start values the two lines appear to run roughly parallel since 1947 and then the gap closes in 2009 because the source data is indexed on that date here s what graph 3 looked like before i indexed the two lines on their start dates graph 5 before i indexed graph 3 at 1947 it looked like this the only difference between graph 3 and graph 5 is that in graph 3 the two lines are pinned together in 1947 by indexing in graph 5 the two lines are pinned together in 2009 by default if we get rid of all the data before 2009 where the lines are pinned together and then wait 70 years or so while more data is gathered and added to graph 5 the graph will give you an idea of how the two price indexes have changed since 2009 i get a similar effect on graph 3 by pinning the lines together at 1947 we don t have to wait 70 years because the time has already gone by we can just look at graph 3 and get an idea how the two price indexes have changed since 1947 the purpose of a price index is to show how much prices have gone up over a period of time on graph 5 both lines show that prices have gone up but because the two lines are pinned together near the end rather than at the beginning the graph creates the false impression that there is little difference between the two lines pinning the lines together where they start as on graph 3 is a way to correct this false impression the gap on graph 3 opens in 1961 and expands relentlessly thereafter exactly like the gap on the first two graphs is this a coincidence it is not coincidence graph 1 shows a gap between nominal labor share and real labor share the only difference in the calculations is that real labor share uses the price indexes and nominal does not so it has to be the price indexes that create the gap on graph 1 since there are no other differences in the calculation it has to be the price indexes that create the gap the fact that the labor share gap and the price index gap both start in 1961 is evidence that the price indexes create the gap in the labor share graph the fact that both graphs show similar gap growth is additional evidence that s evidence not coincidence if i take the higher line on the labor share graph as a percent of the lower line and do the same for the price index graph i can put the two gaps together and compare them graph 6 gap size comparison for labor share blue and the price indexes red click the graph for a larger view identical the gaps are identical the story of the gap in the productivity vs compensation graph is not so neat and tidy even with nominal values there is a gap compensation per hour and output per hour run more or less parallel but are not identical graph 7 the nominal version of productivity blue and compensation red note productivity real output per hour is a measure of economic growth and economic growth is correctly measured in real rather than nominal values this graph shows nominal output per hour values that will become productivity when the inflation is removed compensation falls behind output per hour even in the nominal data when we bring price indexes into the calculation the price index gap is combined with the gap in the nominals the gap we so often see on graphs of productivity vs compensation is partly due to differences in the price indexes and partly due to the differences between the nominals how much of the productivity vs compensation gap is due to price index differences how much is due to differences between output per hour and compensation per hour price indexes aside we can answer that question by using one price index instead of two on the graph below blue is productivity and red is compensation figured as always with the two different price indexes the green line is compensation again figured using the same price index that is used for the productivity numbers the gap between green and red is due to the price index the gap between green and blue is due to compensation falling behind productivity graph 8 productivity blue compensation red and compensation deflated by the same price index as productivity green if i take the red line as a percent of the blue line we get a look at compensation relative to productivity based on the way the two are always figured with different price indexes i will show that in red on the next graph on the same graph i will show in green the green line as a percent of the blue to see compensation relative to productivity when the two are figured with both using the same price index this may give us a better measure of the gap between them i don t know yet if it s a better measure i do know it s an issue so i look graph 9 two measures of compensation falling behind productivity the gap between the green and red lines on graph 9 should remind you of the gaps on the first three graphs of this post graph 1 in particular is strikingly similar to 9 the blue line on graph 9 is the goal the level of productivity which is the level we expect compensation to reach productivity is 100 of productivity both measures of compensation are generally less than 100 of productivity and show decline the red line is the compensation measure you would generally see on a productivity and compensation graph the gap between blue and red shows how much compensation has fallen behind in the late 1950s compensation had not fallen behind at all since 2010 compensation has been down to about 60 of productivity so about 40 behind but the red compensation uses a different measure of inflation than productivity the different measure may exaggerate the extent to which compensation has fallen i m not sure whether it is exaggeration is a separate question the green compensation line uses the same measure of inflation that is used for productivity using the same price index for compensation and productivity eliminates this potential exaggeration the gap between blue and green shows how much compensation has fallen behind without exaggeration in the late 1950s compensation had not fallen behind at all since 2010 compensation has been down to about 86 of productivity so about 14 behind about one third of the gap but that s only if we figure it using the output price index if we figure it using the compensation price index compensation is about 29 behind productivity twice as much twice as far behind two thirds of the gap but either way compensation per hour is an average that does not count factors like rising inequality i m gonna go take some aspirin now please feel free to check my work i should add that at fred if i change the units for a data series to index scale value to 100 for chosen date the chosen date defaults to the data start date 01 01 1947 which is exactly what i want this series of posts begins on 14 december posted by the arthurian at 4 00 am 2 comments thursday december 21 2017 productivity and compensation the early years i put output per hour and compensation per hour on a graph for both the business sector and the nonfarm business sector indexed all the lines to the start date so they all start at the 100 level then i subtracted 50 from the nonfarm business numbers to shift them down on the graph now we can compare productivity and compensation for the business sector blue and red to productivity and compensation for nonfarm business green and purple through 1970 only 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 since i want to see differences i m going to use the business sector data and set the nonfarm data aside as i said before the numbers are indexed both business sector lines start at 100 but we know compensation was actually less than the value of output because somebody made a profit we know compensation was less than the value of output but we don t know how much less from the indexed data we cannot tell i messed with that all day how much less and made no progress so i m moving on i m looking at the early years real compensation and real output run together for a while then separate for a while then run together then separate there s no inflation in these numbers but they do show compensation falling slightly behind output or catching up or sometimes maybe gaining on it and i remember james forder saying samuelson and solow published a widely read paper ...
|
