From: Allin Cottrell (cottrell@wfu.edu)
Date: Wed May 19 2004 - 23:36:29 EDT
On Wed, 19 May 2004, Paul Zarembka wrote:
> I haven't analyzed it but the consumer price index went up 14.4% from
> 9/1997 to 12/2003 (http://data.bls.gov/cgi-bin/surveymost) and
> employment increased 6.3%
> (ftp://ftp.bls.gov/pub/special.requests/lf/aat1.txt). Are you wanting
> attribute the balance to an increase in s/v?
Good answer. I hadn't looked up those other statistics, though I
should have. We have (roughly)
profit = (surplus labor per worker) * (number of workers employed)
* (monetary counterpart of an hour of labor)
The last term is sometimes called the "MELT", which in turn can be
decomposed as:
MELT = ($/good) * (goods/worker-hour)
=~ CPI * (productivity of labor)
As you say, the % change in employment =~ 6% since the last profit
peak and the % change in CPI =~ 14%. According to other BLS figures,
the increase in output per hour in the Business Sector has been > 20%
since 1997 (with the biggest increases over the last 2 years). That
comes fairly close to accounting for a 50% increase in profits.
Allin Cottrell
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