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That wages thing..

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Leitwolf posted on Mon, Oct 8 2012 6:57 PM

Hello everyone

I followed the discussion below ("the myth of faling wages") and got a bit confused over apparently contradicting data. Personally I have no opinion over real wages in the USA. From an Austrian perspective it would be hard to assess anyway.

So I looked up the data myself in order to make sense of it. The "Economic Report of the President" clearly indicates falling wages. Basically there would be a sharp fall between 1973 and 1993. You may want to check these data in the link below, or the table I have posted myself.

http://www.gpo.gov/fdsys/pkg/ERP-2012/xls/ERP-2012-table47.xls

These falling wages however are not consistent with the overall payroll figures. You may relate them either to the number of employees (full time equivalents), or the amount of hours worked (by employees). If you follow this way, you would see rising wages / incomes. I do not present the maths in the table below, but you could easily do it yourself, if you wanted to.

So why is that?

Here is one possible explanation:

http://www.bls.gov/news.release/realer.t02.htm

http://www.bls.gov/news.release/realer.t01.htm

These two tables tell, that wage levels are about 20% higher, if "supervisory employees" are included. The first table, excluding them, would give the same data as in table47 of the presidential report. Thus suggesting, this report was excluding "supervisory employees" as well.

So is that the explanation over all the confusion? It seems so. Yet there are some open points, maybe you could help me with that.

 

1. What sense does it make to distinguish between normal and supervisory employees? In economic data, that must cause awfull confusion. I have never seen something like this in european statistics. And of couse: where do you draw the line?

2. Table 47 is named "Hours and earnings in private nonagricultural industries". There is no hint, that it would be excluding a specific group of employees.

3. In order to compensate for the falling wages of "normal employees" those with a supervisory function would need to have seen enormous gains. And few top manager would not make a lot of a difference. The middle management has earned better than the average in the 70ies already. Did it yet manage to improve it's relative position that much?

4. Even with the obove explanation, the figures still do not add up. Divided by hours worked, wages & salary accruals would amount to 29,2$ an hour, total compensation would result in 36,3$ an hour.

That compares to 19,5 (excluding) and 23,1 (including supervisory..) $ per hour. So..

5. Is this a matter of definition, gross vs. net wages ? If so, the tax rate would have risen very strongly since the 70ies..?

 

  Wages:   Emp - full time equ hours worked total comp. wages & salary
  per Hour per Week in Mio in Bio in Bio $ accruals in Bio$
1970 3,40 125,80 71,23 140,82 617,2 551,6
1971 3,63 133,58 70,85 140,04 658,9 584,5
1972 3,90 143,91 72,67 144,13 725,1 638,8
1973 4,14 152,77 76,03 150,31 811,2 708,8
1974 4,43 161,25 77,14 150,55 890,2 772,3
1975 4,73 170,28 75,38 146,46 949,1 814,8
1976 5,06 182,67 77,71 150,69 1.059,3 899,7
1977 5,44 195,30 80,42 155,78 1.180,5 994,2
1978 5,88 210,50 84,51 162,94 1.335,5 1.120,6
1979 6,34 225,70 87,30 167,63 1.498,3 1.253,3
1980 6,85 241,12 87,22 166,63 1.647,6 1.373,4
1981 7,44 261,89 87,98 167,77 1.819,7 1.511,4
1982 7,87 273,09 85,82 163,78 1.919,6 1.587,5
1983 8,20 286,18 86,35 166,08 2.035,5 1.677,5
1984 8,49 298,00 90,63 174,21 2.245,4 1.844,9
1985 8,74 305,03 92,98 177,61 2.411,7 1.982,6
1986 8,93 309,87 94,66 179,58 2.557,7 2.102,3
1987 9,14 317,16 97,30 184,79 2.735,6 2.256,3
1988 9,44 326,62 100,14 189,67 2.954,2 2.439,8
1989 9,80 338,10 102,76 194,93 3.131,3 2.583,1
1990 10,20 349,75 103,89 196,44 3.326,3 2.741,2
1991 10,52 358,51 102,40 192,29 3.438,3 2.814,5
1992 10,77 368,25 102,51 193,32 3.631,4 2.957,8
1993 11,05 378,91 104,03 196,70 3.797,1 3.083,0
1994 11,34 391,22 106,78 202,07 3.998,5 3.248,5
1995 11,65 400,07 109,75 207,46 4.195,2 3.434,4
1996 12,04 413,28 111,90 210,16 4.391,4 3.620,0
1997 12,51 431,86 114,72 216,60 4.665,6 3.873,6
1998 13,01 448,56 117,76 222,35 5.023,2 4.180,9
1999 13,49 463,15 120,33 226,89 5.353,9 4.465,2
2000 14,02 481,01 123,01 230,61 5.788,8 4.827,7
2001 14,54 493,79 123,19 227,73 5.979,3 4.952,2
2002 14,97 506,75 122,01 225,63 6.110,8 4.997,3
2003 15,37 518,06 121,43 224,10 6.382,6 5.154,6
2004 15,69 529,09 122,55 226,65 6.693,4 5.410,7
2005 16,13 544,33 124,78 229,54 7.065,0 5.706,0
2006 16,76 567,87 127,04 234,82 7.477,0 6.070,1
2007 17,43 590,04 128,43 238,16 7.855,9 6.415,5
2008 18,08 607,95 127,38 234,70 8.068,3 6.545,9
2009 18,63 617,18 121,08 222,52 7.806,4 6.275,3
2010 19,07 636,91 120,30 223,33 7.971,4 6.408,2
2011 19,44 653,16 121,76 227,28 8.242,4 6.636,3

 

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