Thursday, January 14, 2021

"Grunt work" graph update

In my constant search for economic clarity, I recently noted that a lot of "personal income" comes from sources other than "the wages of labor" (to use Adam Smith's term). I found data for "Share of Labour Compensation in GDP", converted from percent-of-GDP to billions-of-dollars, and put it on a graph along with Personal Income.

I also showed the Labor Compensation number as a percent of Personal Income:

Graph #1: Personal Income (red), Labor Compensation in billions (blue)
and Labor Compensation as a Percent of Personal Income (green)

That was 22 days ago. Just this morning my plodding Neanderthal mind noticed that "Compensation of Employees" might make a useful addition to the graph.

I put it on there (purple line) and it came out just a little below the blue "Labor Compensation" number. Glad to see that, as it seems to suggest my thought process was on the right track.

Then I added a line showing Compensation of Employees as a percent of Personal Income (black) for comparison to the green line. Here's the graph:

Graph #2

Wow. There's a good big gap between green and black. Several percentage points. Not what I expected from looking at blue and purple.

Green and black do show similar paths, especially after the 1969 high point of the black line. From start-of-data, however, green runs downhill and black runs flat. And if you look a little before that high point, black is running uphill.

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I thought I had found a click sequence that eliminated the title-text overwrite problem that FRED graphs sometimes have. 

Nope.

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