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Factors contributing to the productivity/compensation gap, 1973–2011

1973–1979 1979–1995 1995–2000 2000–2011 1973–2011
A. Basic trends (annual change)
Median hourly wage -0.26% -0.15% 1.50% 0.05% 0.10%
Median hourly compensation 0.56 -0.17 1.13 0.35 0.27
Average hourly compensation 0.59 0.55 2.10 0.95 0.87
Productivity 1.08 1.29 2.33 1.88 1.56
Productivity/median compensation gap 0.52 1.46 1.21 1.53 1.30
B. Explanatory factors (percentage-point contribution to gap)
Inequality of compensation 0.02 0.72 0.97 0.59 0.61
Shift in labor’s share of income 0.03 0.23 -0.40 0.69 0.25
Divergence of consumer and output prices 0.46 0.51 0.64 0.24 0.44
Total 0.52 1.46 1.22 1.52 1.29
C. Explanatory factors (percent contribution to gap)
Inequality of compensation 4.8% 49.6% 80.0% 38.9% 46.9%
Shift in labor’s share of income 5.5 15.4 -32.5 45.3 19.0
Divergence of consumer and output prices 89.7 35.0 52.5 15.8 34.0
Total 100.0 100.0 100.0 100.0 100.0

Note: Rows in panels A and B show log annual change.

Source: Authors' analysis of Mishel and Gee (2012, Table 1)

Updated May 18, 2012

Documentation and methodology

Table is based on analysis of Mishel and Gee (2012), Table 1. Mishel and Gee present a decomposition of the gap between productivity and median hourly compensation. This has been reconfigured to eliminate the gap between median hourly wages and compensation so the decomposition is between productivity and median hourly compensation.

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