Here is an interesting graph http://erikreuter.net/econ/npro_comp.png
comparing my calculation for nominal productivity increases with nominal compensation increases. All of the data is from: http://research.stlouisfed.org/fred2/categories/2 I calculated productivity by taking business sector output (which is apparently REAL output), multiplying it by the business sector implicit price deflator to convert it to nominal output, and then dividing by business sector hours of all persons. Note that nominal compensation increases closely track nominal productivity increases (except for a couple years at the stock market bubble of 2000 when compensation pulled ahead, and recently when productivity pulled ahead). Unless there is something fishy going on with the business sector implicit price deflator (i.e., unless my reconstruction of nominal business sector output is wrong), it would appear that the main source of differences between real compensation increases and real productivity increases is the deflator used in each case. Ordinarily, one might be inclined to use the consumer price index to deflate compensation and something else (PPI?) to deflate business sector output. But since PPI and CPI differ, that obviously makes the calculated real values differ even if the nominal values were growing at the same rate. It seems simpler to just look at nominal values, and not introduce the complexities of choosing the "right" deflators. But, almost all of the data in use seems to be calculating "real" productivity, even though it is not usually explicitly labeled as "real". So maybe I am missing a good reason for dealing with inflation adjusted values. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
