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FYI Marvin Kosters (Item 2) was Bush's 1992 nomination for Comm. of
Labor Stats. The nomination wasn't acted on since the office has a
fixed term of 4 years. Whew!
Dave
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From: Hoyle_K
Sent: Tuesday, October 28, 1997 5:45 PM
To: DailyReport
Subject: BLS Daily Report
BLS DAILY REPORT, TUESDAY, OCTOBER 28, 1997
RELEASED TODAY: The Employment Cost Index for September 1997 was 134.1,
an increase of 3.0 percent from September 1996 ....On a seasonally
adjusted basis, compensation costs for civilian workers rose 0.8 percent
during the June-September 1997 period, the same as the March-June 1997
increase ....
Contrary to popular belief, average pay has steadily risen in the last
25 years, according to a report by American Enterprise Institute
economist Marvin H. Kosters. Kosters said incomplete and in some cases
inaccurate data have given the false impression that average American
workers are falling more and more behind. AEI is a nonprofit research
organization, supported by businesses and foundations ....Kosters said a
major mistake analysts have made in charting wages over this 25-year
period is using average hourly wages from the BLS payroll survey. Using
this measure, average real earnings appear to have deteriorated during
the past quarter century ....Compensation - including benefits and
bonuses as well as wages - is a more accurate and complete measure of
how workers are faring, he said. The average earning series covers only
production and nonsupervisory workers. Other government data series
measure changes in hourly compensation, which includes benefits as well
as wages. The Employment Cost Index is also a better data series,
Kosters said. The average hourly earnings series leaves out more
skilled, highest paid employees ....Adding to the misconception of
falling real wages, Kosters said, analysts often deflate the average
hourly earnings by a rise in the CPI-U. Instead, Kosters adjusted the
compensation data by the CPI-U minus 0.5 percentage point each year
.....He justified this reduction of 0.5 percentage point by pointing to
the opinion of many economists that the CPI-U overstates inflation
.....Kosters said he chose this reduction because this is about the
extent of reduction in the CPI-U caused by a series of improvements BLS
made and will make in the data series. Also, Kosters said he wanted to
avoid controversial opinions of the CPI advisory panel, which led the
group to say the inflation measure overstates inflation by 1.1 percent.
With these suppositions, Koster said inflation-adjusted wages have risen
by 10 percent in the last 25 years and compensation has advanced by 15
percent ....While Kosters believes wage inequality has widened in the
last 25 years, he added the broadening has been caused by an increased
premium on education ....(Daily Labor Report, page A-6).
Retailers are keeping expectations low for the Christmas season, even
when all the consumer surveys and economic indicators suggest that
Americans have plenty of money to spend for the holidays. That is
because Christmas is slowly shedding its role as the annual rescuer of
American retailers, the sure-thing season that makes up for a year's
worth of mistakes. Indeed, sales of general merchandise, apparel, and
furniture in November and December fell to 23.9 percent of annual sales
in 1996 from 25.4 percent in 1988 ....A chart credited to BLS shows that
consumers are spending less as a percentage of annual household
consumption on home furnishings and clothing and more on cars, eating
out, and entertainment ....(New York Times, page D1).
Business economists report that demand for their firms' products and
services continued to grow in the third quarter but at a slower rate
than in the previous three months ....(Daily Labor Report, page A-7).
DUE OUT TOMORROW: State and Metropolitan Area Employment and
Unemployment: September 1997
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