"""
"""
They point to data showing that productivity has risen sharply since the 1970s while wages have stagnated. They conclude that productivity-driven economic growth does not necessarily benefit American workers.

These claims rest on misinterpreted economic statistics. They juxtapose productivity and pay data that cannot be directly compared, leading to inaccurate conclusions. The claim that pay has lagged far behind productivity growth:

- Examines wage growth instead of total compensation, which includes rapidly growing benefits;

-Uses different price indexes to adjust pay and productivity for inflation;

-Omits the effect of faster depreciation, which reduces net income but not gross productivity; and

-Ignores known measurement errors in Bureau of Labor Statistics (BLS) productivity calculations.

More careful comparisons show that measured productivity has increased 100 percent and average compensation has risen 77 percent over the past 40 years. Issues inflating productivity measurements account for most of the remaining 23 percentage point difference [increases in the rate of depreciation and inaccurate measuring of import prices]. An apples-to-apples comparison shows that employee compensation continues to closely follow productivity.
[...]
benefits have become an increasingly large share of employee earnings, in large part because such benefits are typically tax exempt while wage income is taxable [...]. In 1973, non-wage benefits accounted for 13% of employee compensation. By 2012 that figure had risen [to] 20%. [...] exclude bonuses and other irregular cash payments, [...] Performance-based pay has become significantly more common since the 1970s
[...]
adjusts productivity for inflation using the Implicit Price Deflator (IPD) for nonfarm businesses. Analysts often adjust wages and compensation for inflation using the Consumer Price Index (CPI). These two inflation measures are not directly comparable. They use different methodologies and cover different goods and services. [...] Using the IPD to adjust for inflation finds that same worker making $38,000 in today’s dollars. The CPI measures 36 percent greater inflation over the past four decades than the IPD.
"""
http://www.heritage.org/jobs-and-labor/report/productivity-and-compensation-growing-together
http://www.heritage.org/jobs-and-labor/report/productivity-and-compensation-growing-together

Labels: Oleg Zabluda

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