Chart of the day

Posted: 28 June 2014 in Uncategorized
Tags: , , ,

productivity-growth

The gap between the growth of productivity (now at 11.4 percent above January 2007) and that of wages (only 1.5 percent higher) continues to widen (according to Reuters).

Is it any wonder, then, that income inequality continues to rise?

Comments
  1. […] Tagged: chart, inequality, productivity, wages …read more […]

  2. Bruce says:

    What measure of “productivity” generates a double-digit growth rate?

    “Productivity,” as I’m accustomed to see it measured, tends to average ~1% in bad times and 3-4% in good eras, with occasional brief blips of 6-7% (never sustained). And yet this graphic says “productivity” has been rising at or near double-digit rates for years.

    Something weird, or wrong, here.

    • David F. Ruccio says:

      My mistake, Bruce. I wrote rate of growth when I should have written growth. Thus, as corrected in the text, productivity is 11.4 percent higher than in 2007, while real wages are only 1.5 percent higher.

  3. Bruce says:

    OK. But it’s not just your phrasing that creates the misimpression. The graph itself labels the red and blue lines with references to growth and (apparently) percentage changes rather than levels and index numbers. Not a real good job by Thomson Reuters.

  4. Bruce says:

    Actually, on further inspection, it appears from this that for, the last two years, productivity hasn’t been running away from wages much at all. Doesn’t feel like things have gotten less bad (let alone better) the last couple years, but this measure seems to suggest the the “wedge” between productivity and median wages has not been widening so much lately. FWIW.

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