Technology People and Productivity - Productivity As Reflected In Income -manufacturing

In this panel we want to look more closely at the relationship between productivity and income. Here we look at the Manufacturing Sector — where the effects of technology are clearly reflected. The following panel will show the same data for Business as a whole, with Manufacturing as part of it.

Productivity (output per hour) is shown as an index, with 1992 = 100. The two other series (aggregate wage and salary disbursements and wages and salaries per employee) are in constant 2000 dollars deflated using the Consumer Price Index.

Data are shown on a logarithmic scale; the slopes are therefore comparable. Wages and salaries per employee have shown the least growth. Rates for the last 50 years are these:

Category	Compounded, annual increase -%
Aggregate wages/salaries	1.69
Productivity	2.85
Wages/salaries per employee	1.30
Employment (not shown)	0.39

Wages/salaries -Aggregate ($ billion) Productivity Index, 1992=100 Wages/salaries per Employee ($000)

Productivity has grown much faster than wages/salaries, in the aggregate or on a per employee basis. We have had occasion to note this in the foregoing discussion as well. Productivity is a composite result of human skills, technology, and management. Less of the total yield of increased productivity is going to people, more to other factors — to machines, the "robotic workforce," as investment and to stockholders, as a reward of enterprise. Until about 1970, wages/salaries per employee and productivity moved roughly in parallel. The two curves begin to move in different directions after that time.

In the next panel we look at a broader composite, the Business Sector as a whole. There we also show corporate profits. In the final panel in this series, we shall look at corporate profits in detail.

Sources: Productivity data from Bureau of Labor Statistics, U.S. Department of Labor; wage and salary disbursement data are from the National Income and Product Accounts maintained by the Bureau of Economic Analysis, U.S. Department of Commerce; manufacturing employment data are from the Bureau of Labor Statistics.