October, 2000, Vol. 123, No. 10
Labor month in review
The October
Review
CPI corrected
Elders give more
Multifactor productivity up in 1998
Foreign wages compared
The "New Economy" and its star icon, the Internet, have quite rapidly created a boom, at least in the economic analysis business. Until now, the most visible sign of this boom in the Review has been the increasingly frequent treatment of new-economy-oriented papers in the Précis department. Now, Peter Kuhn and Mikal Skuterud have brought an analysis of the Internet's labor market impacts to the articles section of the magazine. Among their findings, about 15 percent of unemployed jobseekers use the Internet to look for a position, as do about 7 percent of employed workers. Also, it was much more common to search from home than outside one’s residence, even among those looking to change jobs.
Economic statistics can be a subtle art. Differences in survey design, sample selection, and even respondent interpretation of concepts can lead to measured differences between what should be very similar series. Anthony J. Barkume and Michael K. Lettau investigate one such case: the 5.8-percent difference between two sets of estimates of the average hourly earnings of workers in the service-producing sector. They find that excluding "working supervisors" (those with only incidental supervisory duties) from the Employer Cost for Employee Compensation program’s estimates of hourly earnings reduces, but does not eliminate, the discrepancy with the average hourly earnings estimates from the Current Employment Statistics program.
Workers aged 55 and older are an increasingly important source of potential labor supply. As Patrick J. Purcell notes, the 78 million baby-boomers now make up about 55 percent of the population aged 25 to 54. He goes on to say that the sheer size of this cohort implies significant labor force impacts if this generation either retires earlier or remains in the labor force longer than earlier generations.
The article by Melvin M. Brodsky catalogs the attempts of several members of the Organization for Economic Cooperation and Development (OECD) to develop effective public-service employment programs. Some studies have suggested that such programs may be a useful strategy for helping many of the unskilled and less well educated among the long-term unemployed.
There were revisions to the Consumer Price Index (CPI) to correct an error discovered in the software used to calculate the residential rent and owner’s equivalent rent components of the index. The recalculated data were evaluated in the context of Bureau of Labor Statistics guidelines for issuing corrections to previously published CPI data.
Although the corrections were large enough to require re-publication, the general pattern of consumer price behavior this year was little affected. From December 1999 to August 2000, for example, the U.S. average Consumer Price Index for All Urban Consumers (CPI-U) rose 2.7 percent based on corrected data, compared with 2.6 percent as originally published.
Revisions were published for both the CPI-U and the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the U.S. City Average, All Items Index, as well as selected lower-level indexes. Corrected indexes and additional information are available on the BLS website: /cpi/.
The 65-and-older age group allocated more of their expenditures to cash contributions in 1998 than other age groups did. "Cash contributions" include cash given to persons outside of the household, charities, churches, and other organizations.
Cash contributions by households headed by someone aged 65-and-older amounted to 6.2 percent of their total expenditures in 1998. This figure is about twice as high as the 2.9 percent given by the 35- to 64-year-old group and more than three times as high as the 1.8 percent given by the under-35 age group.
The share allocated to cash contributions is highest for the 65-and-older group, as is the level. This group contributed $1,529 on average in 1998, compared with $1,232 for the 35-to-64 group and $536 for the under-35 set.
Multifactor productivity up in 1998
Multifactor productivity—measured as output per unit of combined labor and capital inputs—increased by 1.5 percent in the private nonfarm business sector in 1998. This was the seventh consecutive year of growth.
Output rose at its fastest rate since 1984, 5.2 percent. The growth of combined units of capital and labor inputs, 3.7 percent, was slower than in 1997, but faster than the average for the 1990s.
Labor input grew 2.7 percent in 1998; most of this growth was due to increased employment. Capital services continued to accelerate, jumping 5.6 percent, the largest gain since 1974. The fastest growing components of capital services were equipment and inventories. Additional information is available in "Multifactor Productivity Trends, 1998" news release USDL 00–267.
Average hourly compensation costs in U.S. dollars for manufacturing production workers in 28 foreign economies remained at 79 percent of the U.S. level in 1999. Wages in these economies, taken as a group, had declined in the previous 3 years.
Although costs in Europe and Canada continued to decline relative to the United States, compensation costs in Mexico, Japan, and the Asian newly industrializing economies (NIEs) of Hong Kong, Korea, Singapore, and Taiwan increased at a faster rate than in the United States.
Communications regarding the Monthly Labor Review may be sent to the Editor-in-Chief at 2 Massachusetts Avenue NE, Room 2850, Washington, DC, 20212, or faxed to (202) 691–7890.
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