Labor month in review
The
June Review
Industry productivity in 1999
Contingent workers and alternative work
Multifactor productivity is an extremely sophisticated piece of economic information. As Ziaul Z. Ahmed and Patricia S. Wilder note, multifactor productivity is actually calculated as a residual—that is, the part of the change in an industry’s output that is not due to measured changes in labor, capital, or intermediate purchases. Their more positive statement is that this residual provides information on the impact of other factors, such as economies of scale, organizational efficiency, labor skill, management effectiveness, capacity utilization, and technical change. These are the very factors that many observers think is the "important stuff." The two industries with multifactor productivity gains far beyond the others were electronic components and accessories and computer and office equipment, which shows just how important these "residual" factors can be.
The years 1997 and 1998 seem almost like a history lesson, given today’s pace of change. We should remember, however, that the late 1990s were a time of strong economic expansion. As Ryan T. Helwig reports: "during this 2-year period, payroll employment rose by 6.4 million jobs, and the unemployment rate fell below 5 percent for the first time since the early 1970s. As a result of these improved labor market conditions, both the level and incidence of job displacement continued to decline." Still, displacement affected a large number of workers: in 1997 and 1998, about 1.9 million workers with 3 or more years of service permanently lost those positions.
Martin C. Kohli actually does give us a history lesson. His article traces the development of input-output analysis at the Bureau of Labor Statistics. One of the important, albeit indirect, impacts he finds is the requirement that consistency and linkages be established among the various economic classification systems used by the Bureau. Readers who are interested in such issues should also be on the lookout for the forthcoming 2001 Report on the American Workforce, which traces the historical evolution of industrial, demographic, and compensation classification and measurement issues.
Thomas W. Hale summarizes the challenges facing researchers who are looking for a way to identify and measure the number of persons with disabilities. After examining the data available, including data from the Current Population Survey (CPS), Hale concludes no data exist that are without significant flaws. In particular, he argues against relying on the CPS instruments, as currently constituted, for sound measures of the population with disabilities.
Margaret Hilton provides a summary of the work being done at the National Research Council on the development of the workforce needed for the information economy. Workers with information technology skills are going to be needed throughout the economy and the need is projected to grow at a net rate of a little better than 7 percent per year—about 5 times the net rate of overall job creation.
In 1999, labor productivity—as measured by output per hour—increased in 70 percent of the 119 manufacturing industries measured by the Bureau of Labor Statistics. Output rose in 61 percent of the industries, while hours of labor increased in 33 percent of the industries.
Four out of the five largest manufacturing industries, those with more than 500,000 employees, recorded growth in output per hour in 1999. Of these, the largest productivity gain occurred in electronic components and accessories with an increase of 39.3 percent followed by a 9.0-percent increase in motor vehicles and equipment; a 5.5-percent increase in miscellaneous plastics products, not elsewhere classified; and a 4.8-percent increase in commercial printing. Labor productivity declined by 0.1 percent in meat products manufacturing.
During the same period, unit labor costs declined in 50 of the manufacturing industries measured by the Bureau of Labor Statistics. Unit labor costs—the cost of the labor input required to produce one unit of output—are computed by dividing total compensation by real output.
The largest declines in unit labor costs in 1999 were in the following industries: computer and office equipment (–24.8 percent); women’s and children’s undergarments (–22.9 percent); electronic components and accessories (–21.7 percent); and photographic equipment and supplies (–14.3 percent).
Contingent workers and alternative work
From February 1999 to February 2001, the proportion of U.S. workers holding contingent jobs edged down from 4.3 percent to 4.0 percent. Contingent workers are persons who do not expect their jobs to last or who report that their jobs are temporary. Under the broadest of three definitions, there were 5.4 million contingent workers.
In addition to contingent workers, the February 2001 survey also identified persons in alternative work arrangements. The survey found 8.6 million independent contractors (6.4 percent of total employment), 2.1 million on-call workers (1.6 percent of total employment), 1.2 million temporary help agency workers (0.9 percent of the employed), and 633,000 contract company workers (0.5 percent of total employment). The proportions of workers employed in all four alternative arrangements were about unchanged since February 1999.
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