BLS DAILY REPORT, THURSDAY, JUNE 5, 1997: There's a continuing debate over whether the rise in global competition has been good or bad for the average American worker's wages, but there is little disagreement among economists that it has been an important force in keeping U.S. inflation low. Some analysts estimate that falling prices for imported goods may be clipping as much as 0.3 percentage points off the increase in consumer prices, which rose 2.5 percent in the 12 months ended in April. While U.S. trade in services is important and growing, the impact on prices for services is far smaller because most services, such as medical care, utilities and housing, don't move in international trade (John M. Berry, in The Washington Post, page D1). Fueled by the issue of quality changes, the CPI debate rolls on, says Business Week (June 9, page 68). Among the quotes is one that says a Boskin panel member says that he gets better data on consumer prices by thumbing through old "Consumer Reports". For most products today, the BLS uses a crude method for estimating quality changes. Say a TV set disappears from the shelves, replaced by a new model with a better picture costing 5 percent more. If the inflation rate of other TVs was 2 percent, then the BLS assumes that the rest of the increase, 3 percent, can be attributed to higher quality -- namely the better picture. But the true test of quality is how the new set sells. For instance, if it gains market share, the quality must have risen more than the BLS's 3 percent. Yale University economist William D. Nordhaus says: "We actually don't know how much quality change exists in the BLS numbers." Wage data compiled by BNA for the first 22 weeks of 1997 show an all-industries median first-year wage increase of 3 percent an hour in negotiated agreements. Factoring lump-sum bonuses into median calculations raises the all-industries median first-year wage increase to 3.2 percent an hour. In manufacturing agreements, the year-to-date median wage increase is 3 percent an hour; in nonmanufacturing settlements (excluding construction) the year-to-date median wage increase in the first year of the contract is 3 percent (Daily Labor Report, page D-5). New orders for manufactured goods rose 1.2 percent in April to a seasonally adjusted $323.9 million, the Commerce Department's Census Bureau reports. The volatile transportation equipment sector drove the increase, rising 3.4 percent to $39 billion, with all component industries except railroads increasing. In the year to date, new orders are 5.7 percent greater than in the same period 1 year ago. New orders have risen in 3 of the last 4 months (Daily Labor Report, page D-1; The Wall Street Journal, page A2, graph page 1). The Labor Department is turning to the Internet in an effort to increase compliance with the myriad of employment laws it administers. Under the E-LAWS project -- Employment Laws, Assistance for Workers and Small Business -- DOL's office of policy is developing systems to enable employers and employees to use the Internet to determine their responsibilities and rights when it comes to workplace issues. Currently in place is a system providing information about a regulation requiring that veterans receive preferences for federal government jobs. Upcoming are systems on FMLA, OFCCP's affirmative action requirements, veterans' reemployment rights, and MSHA's quarterly mine employment and coal projection report (Daily Labor Report, page CC-1). A graph showing the percentage of women-owned businesses that are retail establishments, by country or area, on page D8 of The Washington Post shows Canada as having 46 percent, Mexico 41 percent, and Russia 16 percent, both U.S. and Africa 7 percent. Source of the data is the National Foundation for Women Business Owners.
