Wednesday, April 23, 2008

More Real Wages and Productivity

As a follow up to my previous post on whether real wages have tracked productivity, here is a graph from Edward Lazear that has real compensation calculated the way suggested by Martin Feldstein:
Using this approach, real compensation does generally track productivity. Zubin Jelveh, however, notes that
health care and other fringe benefits make up a greater portion of total compensation now than in 1970. Back then, wage and salary payments made up 89.4 percent of compensation, but that figure declined to 80.9 percent by 2006 ...
Health care and other fringe benefits, then, are taking up a good portion of these real gains.

1 comment:

  1. Also, benefits are less efficient than paying someone in money, but the current tax system selects for benefits over money payments.