June 09, 2005 (The Editor’s Desk is updated each business day.)

Trends in real hourly compensation

Increases in employee compensation substantially outpaced increases in consumer prices during the late 1990s. Real compensation continued to grow from 2000 to 2003, although at a somewhat slower rate than in the late 1990s.

[Chart data—TXT]

Such compensation trends can be examined using data from various BLS programs. One source, the Productivity and Costs program, provides an index of real hourly compensation (that is, hourly compensation adjusted for inflation).

During the 1990-91 recession and into 1992, the index of real hourly compensation rose moderately. In 1993 and 1994, real hourly compensation declined somewhat before growing moderately in 1995, 1996 and 1997. In 1998, real hourly compensation grew very strongly and growth continued at a more moderate pace in 1999 and 2000. Real hourly compensation growth slowed in the recession year of 2001 but generally remained positive through 2003.

These data on real compensation are from the BLS Productivity and Costs program. To learn more, see "Real compensation, 1979 to 2003: analysis from several data sources," by Joseph R. Meisenheimer II, Monthly Labor Review, May 2005. Note that, in this article, the Consumer Price Index for All Urban Consumers Research Series (CPI–U–RS) is used to adjust for inflation.