November 20, 2014
Health of employee compensation by industry is illuminated by the recently released U.S. Bureau of Economic Analysis GDP by Industry data. This shines a light on wages, salaries and benefits paid by employers as opposed to job counts that don’t include hours worked and paycheck wages.
For starters, below is the share of total compensation paid by each industry in 2013. Government is the largest employer. It is nearly 20% of the total and nearly 25% of private industry compensation pie.
Turning to compensation as a percent of “Gross Output” (roughly, production; not final sales as often used at feddashboard.com, difference is inventory), industries fall into two groups.
This picture illustrates those industries that in 2013 are greater than 95% of the 1997 ratio (1997 is the earliest available data).
The picture below illustrates those industries that in 2013 were 64-90% of the 1997 ratio.
Note: Ratios are starting points for investigation. Alone they don’t explain:
- Whether a move was related to numerator or denominator of the ratio. For example, here, 2009 spikes often mean industries didn’t terminate employees as fast as production fell.
- Whether use of employees changed or other factor (technology, energy, materials or purchased services) changed, including productivity implications
- Whether hours worked; wages & salaries, or benefits changed
- Which sub-industry changed, BEA provides rich detail
For investors and policy-makers, this does illustrate:
- Difficulties for working people beyond improving job counts
Need to dig into data to evaluate industry health and, through public-company level data from securities filings, evaluate investment opportunities