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May 2005, Vol. 128, No. 5
Real compensation, 1979 to 2003: analysis from several data sources
Joseph R. Meisenheimer II
Increases in employee compensation substantially outpaced increases in consumer prices during the late 1990s. Most, but not all, data series indicate that real compensation continued to grow from 2000 to 2003, although at a somewhat slower rate than in the late 1990s. Changes in compensation—or, more specifically, changes in "real" compensation after accounting for consumer price inflation—are among the most widely watched indicators of economic performance. Most workers are keenly aware of how much they are paid. At a macroeconomic level, growth in real compensation is vital because it determines how much people will have available to spend and save. Spending and saving, in turn, drive the hiring and investment decisions of firms.
"What’s going on with real earnings?" can be somewhat difficult to answer because there is a wealth of data from many different sources, and those sources do not always indicate the same trends. It can be difficult to decide which source is most appropriate for a particular purpose. At least eight statistical programs at the Bureau of Labor Statistics (BLS) provide information on compensation, and a number of other government and private sources also collect compensation information.1 This article examines data from five BLS statistical programs that are the best suited for providing information on recent and longer-term trends in compensation. These data sources are the National Compensation Survey, the Current Employment Statistics survey, the Quarterly Census of Employment and Wages, the Current Population Survey, and the real hourly compensation series from the BLS productivity statistics program. (See exhibit 1.)
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1 The BLS programs that provide information on compensation are the National Compensation Survey, the Current Employment Statistics survey, the Quarterly Census of Employment and Wages, the Current Population Survey, the Occupational Employment Statistics survey, the National Longitudinal Surveys, and the Consumer Expenditure Survey. In addition to these programs, the BLS productivity statistics program provides data series on employee compensation and unit labor costs, which are derived from national income data produced by the Bureau of Economic Analysis of the U.S. Department of Commerce.
Consumer Price Index
Current Employment Statistics
Labor Force Statistics from the Current Population Survey
National Compensation Survey
Productivity and Costs
Quarterly Census of Employment and Wages
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