PAGENO="0001" 86th Congress } JOINT COMMITTEE PRINT ~ C (~U / / ~ STUDY PAPER NO. 21 POSTWAR MOVEMENT OF PRICES AND WAGES IN MANUFACTURING INDUSTRIES BY HAROLD M. LEvIN50N AND SUPPLEMENTARY TECHNICAL MATERIAL TO THE STAFF REPORT BY GEORGE W. BLEILE AND THOMAS A. WILSON MATERIALS PREPARED IN CONNECTION WITH THE STUDY OF EMPLOYMENT, GROWTH, AND PRICE LEVELS FOR CONSIDERATION BY THE JOINT ECONOMIC COMMITTEE CONGRESS OF THE UNITED STATES tute~~~a9~rr La~j~Jai 7 JA~Q,19~3~ ~ UNIVE~ Printed for the use of the Joint Economic Committee UNITED STATES GOVERNMENT PRINTING OFFICE 50505 WASHINGTON : 1960 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington 25, D.C. - Price 40 cents PAGENO="0002" II JOINT ECONOMIC COMMITTEE (Created pursuant to sec. 5(a) of Public Law 304, 79th Cong.) PAUL H. DOUGLAS, Illinois, Chairman WRIGHT PATMAN, Texas, Vice chairman HOUSE OF REPRESENTATIVES RICHARD BOLLING, Missouri HALE BOGGS, Louisiana HENRY S. REUSS, Wisconsin FRANK M. COFFIN, Maine THOMAS B. CURTIS, Missouri CLARENCE E. KILBURN, New York WILLIAM B. WIDNALL, New Jersey STUDY OF EMPLOYMENT, GROWTH, AND PRICE LEVELS (Pursuant to S. Con. Res. 13, 86th Cong., 1st sess.) OTTo ECESTEIN. Technical Director JOHN W. LEHMAN, Administrative Officer JAMES W. KNOWLES, Special Economic Gounsel SENATE JOHN SPARKMAN, Alabama J. WILLIAM FULBRIGHT, Arkansas JOSEPH 0. O'MAHONEY, Wyoming JOHN F. KENNEDY, Massachusetts PRESCOTT BUSH, Connecticut JOHN MARSHALL BUTLER, Maryland JACOB K. JAVITS, New York PAGENO="0003" This is part of a series of papers being prepared for con- sideration by the Joint Economic Committee in connection with its "Study of Employment, Growth, and Price Levels." The committee and the committee staff neither approve nor disapprove of the findings of the individual authors. in PAGENO="0004" PAGENO="0005" LETTERS OF TRANSMITTAL JANUARY 18, 1960. To Members of the Joint Economic Committee: Submitted herewith for the consideration of the members of the Joint Economic Committee and~others is study paper No. 21, "Postwar Movement of Prices and Wages in Manufacturing Industries." This is among the number of subjects which the Joint Economic Committee requested individual scholars to examine and report on in connection with the committee's study of "Employment, Growth, and Price Levels." The findings are entirely those of the authors, and the committee and the committee staff indicate neither approval nor disapproval by this publication. PAUL H. DOUGLAS, Chairman, Joint Economic Committee. JANUARY 12, 1960. Hon. PAm2 H. DOUGLAS, Chairman, Joint Economic Committee, U.S. Senate, Washington, D.C. DEAR SENATOR DOUGLAS: Transmitted herewith is one of the series of papers prepared for the study of "Employment, Growth, and Price Levels" by outside consultants and members of the staff. The author of this paper is Harold M. Levinson of the University of Michigan. All papers are presented as prepared by the authors. OTTO ECKSTEIN, Technical Director, Study of Employment, Growth, and Price Levels. V PAGENO="0006" PAGENO="0007" CONTENTS Page I. Introduction 1 Sources and limitations II. Wage movements in the postwar period 2 Wage patterns in the postwar period 7 III. The movement of manufacturing prices 13 Trends in specific manufacturing industries 17 Sources and limitations of data 19 IV. Summary 21 APPENDIXES Appendix A. Sources of basic data 23 Appendix B. Cross-section correlation matrixes 49 Appendix C. Trends in individual industries relative to all manufacturing 54 TABLES Table 1. Simple cross-section correlation coefficients between wage changes and selected variables, 1947-58 3 Table 2. Cross-section regress equations: Wages 4 Table 3. Simple time series correlation coefficients between annual changes in wages and selected variables, 1947-58 5 Table 4. Time series partial correlation coefficients between annual changes in wages and employment and profits, 1947-58 6 Table 5. Changes in wages, profit rates, concentration ratios, union strength, and employment in manufacturing industries, 1947-53 and 1953-58 7 Table 6. Wage-fringe adjustments in selected manufacturing industries, 1946-58 8 Table 7. Basic trends in the steel and automobile industries, 1947-58 -- 11 Table 8. Wholesale price indexes in manufacturing industries, 1947-58~ 14 Table 9. Simple cross-section correlation coefficients between price changes and selected variables, 1947-58 15 Table 10. Cross-section regression equations: Prices 1 6 Table 11. Simple time series correlation coefficients between annual changes in prices and selected variables, 1947-58 17 Table 12. Time series partial correlation coefficients between annual changes in prices, output, and hourly earnings, 1947-58 17 Table 13. Basic trends in all manufacturing, 1947-5.8 18 Table 14. Ratio of indexes in specific industries relative to all manufactur- ing, 1947-58 20 SUPPLEMENTAL STAFF MATERIAL TO THE STAFF REPORT Technical Note No. 1-The service section: Data on output, employment, prices, and income, by George W. Bleile 63 Technical Note No. 2-Productivity and output in the postwar period, by Thomas A. Wilson 129 VII PAGENO="0008" PAGENO="0009" STUDY~PAPER NO. 21 POSTWAR MOVEMENT OF PRICES AND WAGES IN MANUFACTURING INDUSTRIES I. INTRODUCTION 1 This study paper is designed primarily to present the underlying data and the statistical procedures developed as part of the analysis of the postwar inflation prepared for consideration by the Joint Economic Committee of the Congress.2 In general, the present report does not attempt to carry the analysis of the data beyond that already presented in the staff report; rather, the major purpose is to make the basic data generally available, and to present the results of the various statistical procedures which were employed in analyzing the movement of wages, prices, and profits in manufac- turing industries from 1947 to 1958. SOURCES AND LIMITATIONS In order to evaluate the major factors which might underlie these movements in the several manufacturing sectors of the economy during the period since 1947, data for a number of variables were obtained for each of 19 2-digit Standard Industrial Classifications in manufacturing. All of these basic series are presented in appendix A, together with a description of the sources and methodology used. At this point, however, a number of technical aspects of the data should be noted. Of particular importance is the fact that the underlying figures were gathered by different Government agencies, often utilizing different sampling techniques and different methods of classification. Thus the data on earnings and employment were obtained on an establish- ment basis, with each establishment assigned to a particular industry on the basis of its principal product, measured in value terms. The figures for profits, sales, stockholders' equity, and depreciation and depletion, on the other hand, were obtained by the FTC-SEC on a corporationwide basis; the data for the entire corporation were then assigned to the industrial classification on the basis of the corporation's 1 I have received much helpful assistance from several Government agencies in the course of preparing the present study. In particular, I would like to express my appreciation to Harry Douty and Lily Mary David of the BLS Division of Wages and Industrial Relations; to Sidney Jaffe, Allan Searle, and Helen Hald of the BLS Division of Prices and Cost of Living; to Jack Alterman of the BLS Division of Produc- tivity; to Gladys Miller, Robert Stein, and Sophia Cooper of the BLS Division of Manpower and Em- ployment; to Hyman Lewis of the BLS Office of Labor Economics; and to Louis Paradiso of the U.S. Department of Commerce. Thomas Wilson of the staff of the Joint Economic Committee provided es- tensive help in the statistical computations; and Stanley Heckman and Hamilton Gewehr provided general assistance throughout. 2 For the general discussion of the postwar Inflation see the "Staff Report on Employment, Growth, and Price Levels," ch. v. (Government Printing Office, Dec. 24, 1959). 1 PAGENO="0010" 2 PRICES AND WAGES IN MANUFACTURING INDUSTRIES principal product, measured in terms of annual sales volume. And finally, concentration ratios were computed from data based on the value of product shipments directly, irrespective of the establishment or corporation involved. As a result of these differences in concept and scope, the several series are not completely comparable. To a substantial degree, however, the varying bases of classification are probably corrected by the fact that the 2-digit industry classifications used here are quite broad; consequently, they would normally embrace both the primary and the great majority of secondary products produced by any given establishment. In the case of corporatewide classification, however, there is a greater possibility that the profits figures will be overstated or understated. Classification on a product basis directly, of course, raises no serious issues. The meaning and limitations on the use of concentration ratios also deserve some preliminary discussion. In general, concentration ratios provide a measure of the proportion of the total value of shipments or of total employment in a particular manufacturing industry which is accounted for by the largest companies in that industry. As such, they may provide a rough measure of the extent of competitive pres- sures existing in the product market, on the presumption that the larger the proportion of the product value which is sold by the largest firms, the greater is the "degree of monopoly" involved. There are, however, important limitations on the use of concentration ratios for this purpose. On the one hand, such ratios do not reflect the pressure of competition from substitute products, such as plastics for metals; nor do they reflect the extent t~ which imports may compete in the domestic market. As a result, concentration ratios may overstate the degree of monopoly in a particular situation. On the other hand, these ratios do not reflect the extent to which the relevant product market may be regional or local in character, as in the case of goods having high transportation costs. In these instances, ratios based on product value shipments for the entire country tend to understate the effective degree of concentration.3 Nevertheless, concentration ratios can provide at least a generalframe of reference for evaluating whether a particular industrial classification is "more" or "less" competitive. II. WAGE MOVEMENTS IN THE POSTWAR PERIOD A number of statistical analyses were carried out relating the per- centage changes in straight time hourly earnings in the 19 manu- facturing industries with the movements of several other variables, including the percentage changes in production worker employment. output, productivity per production worker man-hour, the level of profits (as a rate of return on equity), and concentration ratios. Some of th~ results of a complete year-to-year cross section analysis are summarized in table 1; in addition, a complete matrix of all pos- sible simple correlation coefficients is shown in appendix B.4 The simple coefficients listed in table 1 suggest several important points~ Of considerable interest is the fact that no significant relationship was `An excellent presentation of these and other limitations on the use of concentration ratios can be found in "Concentration in American Industry," Subcommittee on Antitrust and Monopoly, at pp. 3-6. All the regressions and correlation coetilcients presented in the following discussion are single equation east squares estimates. All equations fitted were linear. PAGENO="0011" PRICES~ AND WAGES IN MANUFACTURING INDUSTRIES 3 evident between the year-to-year changes in earnings and percentage changes in output, production worker employment, or productivity per production worker man-hour. On the other hand, the data indi- cate a strong interrelationship, particularly after 1951, between hourly earnings, profit levels, and 1954 concentration ratios. With the ex- ception of the year 1955-56, earnings and profits were very highly cor- related; the relationship of earnings to concentration ratios, while weaker, was still quite marked. TABLE I .-Simple cross section correlation coefficients between wage changes and selected variables in 19 manufacturing industries, 1947-58 1 Straight time earnings on- Concentration ratios on- Output Produc- on Year Produc- tivity Con- profits tion per pro- Profits Profits centra- before Profits Profits worker duction Output before after tion taxes before alter employ- worker taxes taxes ratios taxes taxes ment man- hour 1947-48 0.417 -0.248 0. 195 0.012 0. 138 0.226 0.463 -0. 108 0.071 1948-49 -.050 .162 .024 .616 .777 .336 .237 .447 .527 1949-50 -. 563 . 362 -.372 -.087 -. 097 . 033 .654 .307 . 340 1950-51 .171 -.247 .078 .178 .127 .045 .631 .361 .371 1951-52 .087 .118 .039 .598 .707 .283 .491 .458 .463 1952-53 .249 .251 .332 .550 .689 .423 .724 .559 .537 1953-54 . 203 -. 279 -.067 . 628 . 520 . 463 -.059 . 553 . 598 1954-55 .233 .102 .383 .514 .600 .383 .500 .447 .460 1955-56 -. 197 . 354 . 086 . 055 . 146 .428 .259 . 512 . 603 1956-57 .230 .390 .372 .546 .544 .607 .726 .612 .755 1957-58 -.576 .049 -.440 .392 .484 .549 .222 .506 .698 `The 5 percent level of significance is 0.4555. The 1 percent level is 0.5751. Sources: See apps. A and B. The use of simple correlation techniques may, however, yield mis- leading results. In particular, it will be noted in table 1 that profits were often significantly, though rather sporadically; related to changes in output. In order to test the relationship between earnings and profits, after correcting for the effects of changes in output, partial correlation coefficients were computed for each year. The general conclusions indicated above were not greatly affected, although the coefficients fell to somewhat below the 5 percent level of significance in 1954-55 and 1956-57. The partial correlation coefficients, using profits before taxes as the profit variable, were as follows: 1947-48 -0. 009 195354 0. 627 1948-49 . 628 1954-55 . 403 1949-50 - 223 1955-56 . 034 1950-51 . 167 1956-57 . 432 1951-52 . 665 1957-58 . 559 1952-53 . 476. Finally, two multiple cross-section regressions were computed for the subperiods 1947-53 and 1953-58, relating changes in hourly earnings to (1) the average level of profits before taxes, (2) the percent change in production worker employment, and (3) the percent change in out- put. The results, presented in table 2, were again consistent with the previous findings. For the earlier period, the partial correlations coefficients were not significant for any variable; for the years 1953-58, `The 5 percent level of significance is 0.4683; the 1 percent level Is 0.5897. PAGENO="0012" 4 PRICES AND WAGES IN MANUFACTURING INDUSTRIES however, the coefficient for profits was significant at well above the 5 percent level, while both employment and output were of virtually no significance whatever.6 TABLE 2.-Cross-section regression equations: Wages Independent variable Regression coefficient Partial cor- relation coefficient Beta co- efficient Standard error of beta coefficient 1947-53: Average profit rate before taxes Percent change: Production worker employment Output 1953-58: Average profit rate before taxes Percent change: Production worker employment Output 0. 7430 -. 2345 .1329 1 7498 .0034 -.0526 0. 3028 -. 2009 .1787 1 6590 - 0046 -.1055 0. 4196 -. 4007 .3798 . 6797 0049 -.1139 0. 3409 . 5044 .5398 . 2003 . 2759 .2770 Regression constants: 1947-53 1953-58 7.28 Svlultiple correlation coefficient: 1947-53 R=.4614 1953-58 R 16729 Coefficient of multiple determination: 1947-53 R'~=2129 1953-58 R2=1.4528 Degrees of freedom N-4=15 1 Significant at the 5-percent level. In addition to these cross-section tests, some time series analyses were also conducted for each two-digit classification. In view of the limited number of annual observations available, and the rather sharp structural readjustments occurring in the economy as a whole during the immediate postwar and Korean periods, the use of time series is subject to important limitations; nevertheless, the results were gen- erally quite consistent with those indicated by the cross-section data. Table 3 indicates, for each two-digit industry, the simple correla- tion coefficients between the year-to-year percentage change in straight-time hourly earnings and the percentage changes in employ- ment and output; in addition, coefficients are given for the relationship between earnings and three different measures of profit levels. There was no important relationship evident with respect to either output or employment. In the case of profits, however, the correlations were consistently stronger, particularly for profits before taxes, lagged 1 year. In the latter instance, the correlation coefficients were at a 5-percent level of significance or better in 9 out of 19 industries, in- cluding 5 which were at a 1-percent level. I Another bit of corroborative evidence can be found in a similar study of 61 smailer (3-digit) industries conducted by Conrad. On the basis of both simple and multiple cross-section regression analysis, he found a "remarkably low degree of relationship" between average annual changes in production workers' wages and output, employment, and productivity. He did not test for the role of profits. See Alfred H. Conrad, "The Share of Wages and Salaries in Manufacturing Incomes, 1947-56," Joint Economic Committee Study of Employment, Growth, and Price Levels, Study Paper No. 9, pp. 149-152. PAGENO="0013" S to toi Co a Co ~ ~Co CoO (0-0 0~0~0 00. 0 Co 00(0 (0 ~ CoCo 4o~. Co l~oo -Co (0 00 CC Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co Co 0) Os 00 C 00 C Co CO 0 C. C I I I I I I~ Co CoCoCoCoCoCoCo Co CO Co Co 00 CoO a a Co Co (000 ~O 000000 Co Co 00000000 Co 4 Co CO Co I II II I II I Ij, CoCoCoCoCoOCoCo 0 Co 00 Co CoO a Co0~ ~-4 Co Co a 00 a 00(0 CoO Coo Co a 0 Co 00 Co 0000 I-I C 1:01 Ca PAGENO="0014" 6 PRICES AND WAGES IN MANuFACTURING INDUSTRIES TABLE 4.-Time series partial correlation coefficients between annual changes in wages, employment, and lagged profits, 1947-58 1 * Jndnstry Partial correlation 2 of per cent change in straight- time hourly earnings on- Percent Pates of change in return on production stockholders' worker equity before employment taxes. lagged 1 year 20. Food 21. Tobacco 22. Textiles 23. Apparel 24. Lumber 25. Furniture 26. Paper 27. Printing and publishing 28. Chemicals 29. Petroleum 30. Rubber 31. Leather 32. Stone, clay, and glass 33. PrImary metals- 34. Fabricated metals 35. Machinery, except electrical - 36. Electrical machinery 37. TransportatIon equipment - 38. Instruments 0.398 -450 .675 -.034 .228 .595 .420 - 049 .213 .680 .550 .390 . 385 - 186 - 050 - 386 -.291 . 338 .326 0.834 -.072 .821 .395 -.282 .879 .798 .866 .240 .316 .847 .538 - 182 - 166 . 707 - 692 - 649 -. 393 - 008 I The 5 percent level of significance is 0.6319; the 1 percent level Is 0.7646. 2 These are partial correlation coefficients corresponding to the regression coefficients in the equation W.=a+SE-f-cP, where W. is the percent cnange in straigrit time hourly earnings, E is the percent change in production worker employment, and R is the rate of return on stockholders' equity, lagged 1 year. Unfortunately, no recent data were available to evaluate the possible relationship between wage changes and union strength. The most recent study of the extent of union organization in different industries was made in 1946 ;7 it is probable, however, that the strength of unionism has not changed greatly in most industries since that time. In any case, on the basis of the best estimates available, there does not appear to be any general relationship between union strength and wage changes. This is suggested by the figures in table 5, in which industries are ranked in accordance with their percentage increases in earnings during two major subperiods, together with data on estimated union strength, average profit levels, concentration ratios, and production worker employment in those industries. During both of the periods 1947-53 and 1953-58, the six industries which had the greatest increases in hourly earnings ranged from quite weakly union- ized sectors, such as food and chemicals, to such strongly organized industries as primary metals. Contrariwise, the half dozen industries with the lowest increases in earnings included apparel, which was highly organized, as well as textiles and leather at the othcr extreme. Union strength per se therefore, does not appear to have been an important factor explaining developments in the wage structure; it must be stressed, however, that it does not necessarily follow from this that collective bargaining has not had an effect on the wage level. For it may be that wages are increased in the more strongly unionized industries by more than would otherwise be the case, and that other industries, both union and nonunion, adopt the same "pattern." Thus the lack of any evident relationship between wage changes and 7 "Extent of Collective Bargaining and Union Recognition, 1946," Monthly Labor Review, May 1947. PAGENO="0015" 7 PRICES AND WAGES IN MANUFACTURING INDUSTRIES union strength is not sufficient to demonstrate that unionism is purely a passive factor. TABLE 5.-Changes in wages, profit rates, concentration ratios, union strength, and employment in manufacturing industries, 1947-53 and 1953-58 Industry Percent change in straight time earnings Average profit rates, before taxes Concentra- tion ratios Estimated union strength, percent Percent change in production worker employ- ment 1947-53 49.2 26.0 59. 4 25-SO 5. 2 47.6 19.1 99.1 50-75 1.4 47. 4 22. 8 81. 1 75-100 5. 3 46.0 20. 2 22. 4 25-50 -6. 0 45. 5 26. 2 5.0 50-75 8.8 45.0 23.3 2.3 75-100 7. 2 44. 9 24. 6 69. 9 50-75 17. 7 44. 3 26. 6 57. 9 50-75 4. 1 44.0 24. 4 1. 5 25-50 -10. 6 43. 9 26.3 19.3 50-75 13. 2 43. 8 26. 6 31. 1 75-100 7. 5 42.7 23.9 - 8.1 41. 9 26.0 7.3 25-SO 6. 6 40. 1 33. 1 83.2 75-100 47. 2 38. 6 20. 0 100.0 25-SO -13. 5 38.2 31.2 72.2 75-100 31.0 37. 5 25. 5 51. 2 75-100 0. 2 31.4 20.3 11.9 0-25 -10.8 31.1 15.5 2.3 25-50 -6.8 18.0 13. 6 5. 7 75-100 7. 1 1953-58 31.2 21.0 81.1 75-100 -21. 28. 7 24.0 100.0 25-50 -15. 26. 7 24. 3 59. 4 25-50 -7. 26.3 19.9 5.0 50-75 -0. 25.2 17. 7 22.4 25-50 -8. 24.9 18.9 19.3 50-75 -14.5 24. 6 20. 9 31. 1 75-100 -20. 2 24. 6 23. 8 69. 9 50-75 -15. 8 24. 3 14. 9 99. 1 50-75 -15. 8 24. 1 24. 6 72. 2 75-100 -18. 9 24. 1 30.7 82. 3 75-100 -27. 1 23.0 22. 7 51. 2 75-100 -15. 6 22. 9 24. 4 57.9 50-75 -9. 2 21.6 20.3 -15.7 18.1 21.6 2.3 75-100 (1.4 16. 1 18. 7 7. 3 25-50 -7. 1 15.9 14.0 1.5 25-50 -20.2 14. 9 15. 6 2. 3 25-50 -8. 4 13. 7 12. 8 5. 7 75-100 -6. 9 9.7 9.2 11.9 ((-25 -22.0 WAGE PATTERNS IN THE POSTWAR PERIOD The general forces underlying wage changes, as developed in the preceding section, are also given support by an analysis of the collective bargaining settlements negotiated in several manufacturing industries, or in companies generally representative of entire industries, during the postwar period. These settlements are summarized in table 6 for each year and for major subperiods. For purposes of analysis, they are separated into two broad groups according to the general degree of concentration in the industries involved. In addition, the "key" bargains are designated for each period.8 8 The term "key" bargain is used here to designate the collective agreement which is widely alleged to establish a standard, or "pattern," of wage-fringe adjustments which is accepted by other industries or com- panies as the basis for subsequent agreements. The steel and automobile settlements are usually given this status because of their size and the strength of the union in them, even though other settlements may, in point of time, precede them. Chemicals Petroleum refining Primary metals Food Paper Printing Instruments. Stone, clay, and glass Lumber - Fabricated metals - Nonelectrical machinery All manufacturing Furniture Transportation equipment Tobacco Electrical machinery -- Huhhcr~ Textiles Leather Apparel Primary metals Tobacco Chemicals - Paper Food Fabricated metals~ Nonelectrical machinery Instruments Petroleum refining Electrical machinery Transportation equipment Rubber Stone, clay, and glass All manufacturing Printing Furniture Lumber Leather Apparel Textiles Sources: See app. A. PAGENO="0016" 8 PRICES AND WAGES IN MANUFACTURING INDUSTRIES TABLE 6.-Wage-fringe adjustments in selected manufacturing industries, 1946-58 Company or industry High concentration: United States Steel (key) General Motors (key) International Harvester Rubber (4 companies) General Electric Armour Aluminum Co. (steelworkers).. Anaconda Copper Lockheed Aircraft Glenn Martin North American Aviation Bethlehem Shipbuilding Pacific Shipbuilding Sinclair Oil American Viscose Low concentration: Full Fashioned Hosiery Northern Cotton Textiles American Woolen Men's Clothing Women's Clothing International Shoe Massachusetts Shoe Total settlements, 1946-SO 62½ cents plus noncontributory pensions, plus contributory Insur- ance. 56 cents plus 6 holidays plus noncontributory pensions, plus con- tributory Insurance (includes 11-cent automatic increase). 53½ cents plus 6 holidays plus noncontributory pensions, plus con- tributory insurance (includes 3-cent automatic increase). 52½ cents plus 6 holidays, plus noncontributory pensions, plus con- tributory insurance. 52 cents plus 7 holidays, plus contributory pensions, plus contribu- tory Insurance. 55½ cents plus 6 holidays. 58 cents plus 6 holidays, plus noncontributory pensions, plus noncon- tributory insurance. 57 cents plus 6 holidays, plus contributory insurance. 50 cents plus noncontributory insurance (6 holidays, plus noncon- tributory pensions previously in effect). 43 cents plus 7 holidays, plus contributory insurance. 47½ cents plus 6 holidays (contributory insurance previously in effect. 37 cents plus noncontributory pensions, plus contributory insurance. 47 cents (new construction). 79 cents (includes 25 cents negotiated in 1945) plus contributory in- surance (6 holidays plus contributory pensions previously in effect). 55 cents plus 6 holidays, plus contributory pensions (noncontributory insurance previously in effect). 46 cents plus 5 holidays, plus noncontributory pensions (noncontribu- tory insurance previously in effect). 54 cents plus 6 holidays (noncontributory insurance previously in effect). 57 cents plus 6 holIdays (noncontributory insurance previously in effect). 52½ cents (6 holidays, plus noncontributory pensions, plus noncon- tributory insurance previously in effect). 56 cents (6½ holidays for time workers, plus noncontributory pen- sions, plus noncontributory insurance previously in effect). 42 cents plus 6 holidays. 42½ cents plus 6 holidays (noncontributory insurance previously in effect). Total settlements, 1951-54 High concentration: United States Steel (key) General Motors (key) International Harvester - Rubber (4 companies) General Electric Armour Aluminum Co. (steelworkers). - Anaconda Copper Lockheed Aircraft Glenn Martin North American Aviation Bethlehem Shipbuilding Pacific Shipbuilding Sinclair Oil American Viscose Low concentration: Full Fashioned Hosiery Northern Cotton Textiles American Woolen Men's clothing Women's clothing International Shoe Massachusetts Shoe 29½ cents plus 6 holidays. 32 cents (includes 31-cent automatic increase). 28 cents (all automatic). 32 cents. 33 cents (estimated; includes 9-cent automatic increase). 31½ cents plus noncontributory pensions, plus noncontributory in- surance. 35½ cents (estimated). 33 cents plus noncontributory pensions. 36 cents (includes 3-cent automatic increase). 43½ cents plus noncontributory pensions (includes 24-cent automatic increase). 38½ cents plus noncontributory pensions (includes 1.5-cent automatic increase). 52~-~ cents plus 6 holidays. 55 cents (new construction) plus noncontributory insurance. 313/a cents plus 1 holiday (estimated; includes 3-cent automatic in- crease). 15 cents (includes il-cent automatic increase). 25 percent reduction in rates (estimated). 4 cents (includes 3-cent automatic increase). 4 cents. 12½ cents. 14 cents. 10½ cents plus noncontributory insurance. 8 cents plus ½ holiday. PAGENO="0017" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 9 TABLE 6.-Wage-fringe adjustments in selected manufacturing industries, 1946-oS-Continued Association bargaining discontinued after 1954. 73/~ cents.2 Out of business after 1954. 123/~ cents plus 1 holiday. 14 cents. 143/2 cents plus noncontributory pensions. 18 cents plus 3/~ holiday. 1 SUB = Supplementary unemployment benefit. 2 Association bargaining discontinued after 1954. The Berkshire-Hathaway Co. was substituted because it had been a major concern in the previous association. Source: Wage Chronology Series, Bureau of Labor Statistics and data published by the Bureau of Na- tional Affairs. Some added information was obtained from personal correspondence. Two important Characteristics of postwar wage patterns can be noted from the table. First, the general level of settlements during the period 1946-50 were very similar for the great majority of firms and industries covered; in particular, no important differe'nces were evident as between the high versus the low concentration sectors. During this period, five separate rounds of wage-fringe increases occurred. With few exceptions, manufacturing industries or com- panies, regardless of their product market characteristics, followed similar patterns. In the few instances of substantial downward modification of the pattern, as in aircraft and shipbuilding, the differences were made up in the 1951-54 period. Beginning in 1951, however, very substantial deviations began to develop, primarily in line with the competitive characteristics of the industry. In the nonconcentrated sectors-textiles, clothing, and leather (shoes)-settlements fell very far below the pattern. In addition, the one company in the concentrated sector which fell below--American Viscose, manufacturers of rayon yarn-was subject to severe competition from the development of other synthetic fibers. In effect, those manufacturing industries which were subject to increasing competitive pressures in the product market and in which profits were being seriously curtailed, did not match the pattern established by the more profitable, and in most cases more concentrated, industries. Company or industry Total settlements, 1955-58 High concentration: United States Steel (key) General Motors (key) International Harvester Rubber (4 companies) General Electric Armour Aluminum Co. (steelworkers)~ Anaconda Copper Lockheed Aircraft Glenn Martin North American Aviation Bethlehem Shipbuilding Pacific Shipbuilding Sinclair Oil American Viscose Low concentration: Full Fashioned Hosiery Northern cotton textiles (Berk- shire-Hathaway). American Woolen Men's clothing Women's clothing International Shoe Massachusetts Shoe 593/~ cents plus SUB 1 plan, plus 1 holiday (includes 34-cent automatic increase). 473's cents plus SUB plan, plus 1 holiday (includes 31-cent automatic increase). 49 cents plus SUB plan, plus 1 holiday (includes 32-cent automatic increase). 43 cents plus SUB plan, plus 1 holiday. 40 cents (estimated; includes 37-cent automatic increase). 54 cents (includes 28-cent automatic increase). 63 cents plus SUB plan, plus 1 holiday (includes 36-cent automatic increase). 37 cents plus 1 holiday (includes 14-cent automatic increase). 39 cents plus 1 holiday (estimated; includes 1-cent automatic increase). 41 cents (estimated; includes 38-cent automatic increase). 36 cents plus~ 1 holiday (includes 19-cent automatic increase). 66 cents plus 1 holiday. 51 cents plus 6 holidays. 413/~ cents (estimated) plus 1 holiday. 133/2 cents (includes 83/2-cent automatic increase). 50505-GO-----2 PAGENO="0018" 10 PRICES AND WAGES IN MANUFACTURING INDUSTRIES This general situation continued through 1955-58. The textile and clothing industrirs, including American Viscose, and the shoe firms continued to reach agreements far below the level set in the better situated industries. Within the latter, more diversification also developed, although the bulk of settlements ranged between 40 and 50 cents per hour. The major exceptions were in industries organized by the steel union-steel, aluminum, and Atlantic coast shipbuilding (Bethlehem Steel Co.); in these sectors, wage increases were 59~, 63, and 66 cents, respectively (plus fringes), over the 4-year period. The second point to be noted from the data is the increasing impor- tance of automatic wage changes, incorporated into long-term. contraQts in the form of cost-of-living adjustments and annual improvement factors. During the 1946-50 period, this approach was introduced by General Motors, but was rarely followed elsewhere. In 1951-54, however, largely as a result of the sharp rise in the cost of living which accompanied the outbreak of the Korean war in 1950, the annual improvement factor-cost of living approach was adopted in automobiles, farm equipment, aircraft, electrical equioment, and a few others. The steel union, however, continued to follow the more traditional approach, as did several other leading companies and unions. During 11955-58, however, most of the latter group also went over to automatic adjustments. As a result, virtually every strongly unionized company in the concentrated sectors listed in table 6 had negotiated long-term contracts in 1955 and 1956, providing for auto- matic annual wage increases plus automatic costs-of-living adjustments through 1957, 1 958, and, in some cases, 1959. The only exceptions were rubber, shipbuilding, and oil (Sinclair). On the other hand, none of the low concentration sectors followed this policy after 1955. The sequence of wage developments during the 1955-58 period is also of very consid erable interest. In the sum mer of 1955, the major "key" bargain was negotiated in the automObile industry, in which sales and profits were at record or near record levels. The contract extended for 3 years to mid-1958, and included an annual improve- ment factor of appro~mately 6 cents per hour, a cost-of-living clause, and additional fringes estimated to be worth approximately 12 cents per hour. Shortly thereafter, the steel industry negotiated a straight wage increase of 15 cents, under a wage reopener clause, in a contract which expired in 1956. Output and profits in steel had also risen sharply from the 1954 recession low; the relevant data for both the automobile and steel industries are shown in table 7. Before the year was out, the leading firms in several other major industries in which market conditions and profits were adequate had negotiated similar contracts, with many adopting the 3-year approach of the automobile industry. PAGENO="0019" PRICES AND WAGES IN MANUFACTURING INDUSTRIES TABLE 7.-Basic trends in the steel and automobile industries, 1947-58 11 Profits before taxes on Year equity (percent) Profits after taxes on equity (percent) Profits before taxes as per- cent of sales Production Output worker em- (1947-49= ployment 100) (1947-49= 100) IRON 1947 19.8 1948 17.0 1949 17.0 1950 28.1 1951 34.0 1952 17.6 1953 25.5 1954 16.0 1955 27.1 1956 25. 1 1957 22.7 1958 14.2 AND STEEL 12.1 10.9 14.7 12.3 9.9 10.9 14.2 15.1 12.3 16.0 8.5 9.3 10.7 12.4 8.1 10.5 13.5 14.5 12.7 12.9 11.4 13.0 7.2 10.5 101 106 92 118 131 117 139 109 146 143 139 105 101 105 93 104 110 95 110 97 107 104 105 86 MOTOR VEHICLES 1947 1948 - 1949 1950 . 27.9 32.9 35.8 51.8 39.5 36.8 37.9 29.4 46.1 27. 1 28. 1 14.4 15.6 18.7 20.9 24.6 14.1 13.6 13.6 13.9 21.1 13. 0 14. 0 8.1 10.4 11.8 13.2 17.1 13.2 12. 6 11.0 10.8 15.1 10. 8 10. 8 7.0 95 101 104 132 120 102 126 109 153 125 128 99 100 101 98 109 110 100 119 97 116 100 98 74 1951 1952 1953 1954 1955 1956 1957 1958 Sources: See app. A. The output index for "Iron and Steel" is the Federal Reserve Board index of indus- trial production, with 1947 weights. In mid-1956, the "key" bargain open for negotiation was in steeL Both production and profits were at about their 1955 levels, a major investment boom was developing in plant and equipment, and the precedent set by the previous year's settlements in automobiles and other industries was strong. The result was an extremely favorable contract for the steelworkers-a 3-year contract extending into 1959, including a 9-cent annual improvement factor, automatic cost-of- living adjustments, and major fringe benefits. Similarly, favorable long-term contracts were signed in the aluminum industry; in most others, the terms were somewhat less liberal, but also involved long- term commitments to annual wage increases. The results of these two major "patterns," established in the auto- mobile and steel industries during the period of high output and profits, continued to be felt throughout the declining years of 1957 and 1958. In both of these years, despite marked declines in output and employment throughout the economy, wage increases were auto- matic in several major manufacturing industries. Further, the wide- spread use of cost-of-living escalators magnified tile effects of quite PAGENO="0020" 12 PRICES AND WAGES IN MANUFACTURING INDUSTRIES small (originating) increases in the Consumer Price Index. The auto- mobile contract, which terminated in the midst of the sharp reces- sion of 1958, was again renewed for a 3-year period, and again included an automatic annual improvement factor of 2~ percent per year (about 7 cents) plus cost-of-living adjustments. Thus the recession did not appear to have had any appreciable effect on the annual rate of increase in negotiated rates; the direct costs of additional fringe benefits negotiated in the 1958 automobile contract, however, were very low. And in 1959, the steel contract was again being negotiated in the context of a developing boom. The probability that the rate of increase in wages after 1958 has not been appreciably affected by the 3-year automobile contract is given added support by a comparison of the wage-fringe increases negotiated during the first 6 months of 1959 as compared to the same period in 1955. These periods were generally comparable, since they both represented approximately the same phase of sharp recovery from previous recessions. From December 1954 to June 1955, unem- ployment declined from 5.0 to 4.1 percent, seasonally adjusted; in the same period, December 1958 to June 1959, the rate fell from 6.1 to 4.9 percent. NEGOTIATED SETTLEMENTS, FIRST SIX MONTHS 1955 AND 1959 Source: Bureau of Labor Statistics. The above chart relates to settlements involving 1,000 or more workers con- cluded during the 6-month period. It includes all wage changes negotiated during the January-June period that are scheduled to go into effect during the contract year-i.e., the 12-month period following the effective date of the agree- ment. In summarizing percentage increases, it has been necessary to estimate Thousands of wonkers 900 Wage ho euçe S coreoseohorge PAGENO="0021" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 13 their value in terms of cents on the basis of available information on wage levels in the industry. This chart excludes- Settlements involving fewer than 1,000 workers. Settlements in construction, the service trades, finance, and government. Instances in which contract reopening privileges were not exercised. Wage increases and changes in supplementary practices that went into effect during the period but that were negotiated earlier-for example, deferred wage increases, cost-of-living adjustments, or annual improvement factor increases. Chart 1 provides a comparison of the number of employees covered by negotiated contracts who received wage increases within specified ranges in the first 6 months of 1955 and 1959. In 1955, 72 percent of employees received wage increases of 5 to 11 cents, compared to only 60 percent in early 1959. However, a full 30 percent received more than 1 1 cents in 1959, contrasted to only 8 percent in 1955; contrariwise, 15 percent received less than 5 cents in 1955 compared to 8 percent in 1959. An estimate of the weighted average of wage increases for 1955 was 7.6 cents; in 1959, 9.2 cents. This increase of about 20 percent approximates the rise in hourly earnings from 1955 to 1959; relatively, therefore, the 1959 increase was no greater than 1955. On the other hand, the rate of unemployment was almost one percentage point greater in the first 6 months of 1959 as compared to 1955. And finally, 69 percent of the 1959 settlements also liberalized one or more fringe benefits as contrasted to 60 percent in the first 6 months of 1955, although the costs of the 1959 fringes may well have been below those of 1955. The weight of evidence, however, indicates that the rate of advance in wage-fringe costs has not been slower during the 1959 upswing. One final possible qualification should be noted. The data on which these comparisons are based excludes contracts which con- tained reopening clauses that were not utilized-that is, contracts in which no increases occurred because the union chose not to request one. They also exclude several types of settlements noted in the chart. It is doubtful that this would affect the data in any important way. III. THE MOVEMENT OF MANUFACTURING PRICES An analysis similar to that applied to wage movements was also carried out for price movements in 16 two-digit manufacturing indus- tries. Since the Bureau of Labor Statistics does not compute whole- sale price indexes on a basis consistent with most two-digit classifica- tions, it was necessary to construct such indexes by recombining various subgroups of the wholesale price index. The sources and methods used are described in appendix A. The resulting price indexes are shown in table 8 9; in all, they account for close to 80 percent of the weights in the entire wholesale price index, and for approximately 95 percent of the total weight in the "all manufactures" index. The major additional items included in the entire wholesale price index are, of course, farm products. Only 16 industrial sectors are represented because of lack of adequate price data for the remaining 3- printing and publishing, transportation equipment, and instruments. Wherever feasible in the following discussion, price and other data for the three-digit industry, motor vehicles, is used in place of transporta- tion equipment. All of the statistical tests, however, are based only upon the 16 two-dIgit sectors. PAGENO="0022" 14 PRICES AND WAGES IN MANUFACTURING INDUSTRIES CO CL 0) C) CC C)) h C) C) C) 0) C) 0) CC 0 c~3 C 0 0 C 0 C ,0 C C0) Eo -C) ~0 00 C'~j 0~ CC C))) C) !ii I 00CC 00 C) 000000000 C) 00 o~CC)C)0 00-0000CC CC 0CC C) C) C) 0 0 0 C) C) 000 C- C) C- 00000)'. C) 0CC 00 CC C-C) C) 000 C) - CCCC C-C) C) 000 00CC CC CC CC CC 000) C)00000 00 0 CC 0o C- CO CC 0 C- 0 CCC) C) 00000CC 0 CC CC CC 00000000000CC 0~ 00CC CC CC CC CC)) C) C) C) C) 00000 0 C) 0 C) 0000 C) 00 C) 00CC C-CC C) C- C- C-CC C) CC 00CC 0 C-C) C- 0 C- C- - 0CC CC CC C) CC CC C) C) C) C) 0000 C) 0 C) 000CC C) C) CCC) 0CC 0 C) 0 t- CC 0CC C) 0CC - C- C) 0CC 00000CC 0000 C) CC CC CC C) C) CCC) C) 00 C) 00000 0 00CC 0CC C- CCC) C-CC)- 00CC 0000 0 C- C-CC C) C- 0 C-C) 0CC 0000 C-C) - 0 C) CC C- 0CC C) C-CC 0~0C) C) 0CC 00CC C) 0 CCC) 000 C-C) C) C) C)~C CC 000 CCC) C) C) -C) C)000 00 C) 00000 0 C) O 0000CC 0C)CC 00 C) CC 000 C) C) 0CC 0000 C- 0C0 C) 000CC CC-CC C) C)C)C)-~00'~0 C) 00000 0 C) 00CC 000 C) C-CC 00 CCC) CC 00 CCC) CCC) C-C) C) C) 000000CC 000CC 0 C)C)0C),-C 0C)0C)000 C- C) CC CCC) 0)-C) 00000000)-C) ~ 000)-C) C) C) CCC) 00 CCC) C-CC 000C) 0000)-C) C) C) CC 000000CC 0CC 00000000000000000 C) 0000000CC 0000 C) 0-40 C) C) C) - - C) 000 C) CCC) CCC))- CCC) 000 00000000000-000000 CC CCC- 0CC 00CC 0000)-C) 0CC)- C) 0 C) C) 000000000000000 C)C)C)0000C)C)C)C)0C)0000 C) C- C- C) 000)-C) 0 CCC) 000CC PAGENO="0023" PRICES AND WAGES IN MANTJFACTIJRING INDUSTRIES 15 A complete year-to-year cross-section analysis, relating the per- centage change in price to several variables, was conducted. The simple correlation coefficients for several of the more important possible relationships are listed in table 9. In addition, the complete matrix of all possible simple correlation coefficients is provided in appendix B. TABLE 9.-Simple cross-section correlation coefficients between price changes and selected variables in 16 manufacturing industries, 1947-58 1 Year Percentage change in wholesale price index on- Gross hourly earnings Produc- tivity per production worker man-hour Output Average profits before taxes Average profits after taxes Ooncentra- tion ratios 1947-48 1948-49 1949-50 1950-51 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 0.093 .214 -.055 .101 .375 .546 .620 .551 -. 098 .551 .308 0. 024 .328 .170 -.415 .035 -.171 -.215 -.201 -. 418 -.100 .329 0.375 -.416 .073 -.199 -.065 .176 -.247 .587 . 283 .397 .115 0.339 .439 -.041 .294 .536 .490 .715 .448 . 404 .585 .629 0. 560 .335 .113 -.066 .624 .432 .505 .395 - 442 .711 .276 0.329 .287 -.019 -.526 .581 .595 .387 .196 . 193 .617 -.114 1 The 5-percent level of significance Is 0.4973. The 1-percent level is 0.6226. Source: See apps. A and B. A number of interesting points are indicated. Perhaps of greatest importance is the lack of any evident relationship between changes in prices and changes in output, at least up to 1954. After 1954, the correlation became weakly positive, except for the one year of sharp recovery, 1954-55, when a significant relationship appeared. The remaining findings may be briefly summarized as follows: 1. Changes in prices were not strongly related to changes in produc- tivity per production worker man-hour. It is of some interest, how- ever, that several negative correlations appeared, indicating that lower price increases were often associated with greater increases in productivity. 2. Price changes were unrelated to changes in gross hourly earnings during the early part of the period up to 195 1-52. After that point, however, the correlation became very much stronger. 3. Price adjustments were clearly related to profit levels throughout most of the postwar period; the relationship was strongest, however, after 1951. 4. The relationship of price changes to concentration ratios was quite irregular. Up to 1951, it was low or negative; in fact, the strong negative correlation in 1950-51 suggests that prices in nonconcen- trated industries rose more than in concentrated. Prom 1951 to 1957, however, the coefficient was consistently positive, though the strength of the relationship varied considerably. And finally, the correlation became weakly negative in the 1957-58 recession.1° 10 The first three of theseresults, relating to output, productivity, and earnings, were also found by Conrad, op. cit. Using both simple and multiple regression analysis to test price changes against changes In wages, output, productivity, and employment, he concluded that "only the price-wage relationship and the price- employment change relationship approach economic significance"; his data show a much lower partial correlation coefficient for the latter relationship, however. His analysis included 61 three-digit industries. PAGENO="0024" 16 PRICES AND WAGES IN MANIIFACTURING INDUSTRIES A closer evaluation of the relationship of prices to output and wages was obtained by a multiple cross-section regression analysis covering the two subperiods 1947-53 and 1953-58. The percentage change in the wholesale price index was tested against (1) the per- centage change in output and (2) the percentage change in direct labor costs per unit of output per total worker man-hour. The latter variable thus takes account of the effects of productivity on labor costs as well. The results are shown in table 10. Output was not a significant variable during either subperiod (after taking ac- count of changes in unit direct labor costs); on the other hand, direct labor costs were highly correlated with price changes during the 1953- 58 period, but much less strongly so from 1947 to 1953. In general, these findings are consistent with those indicated by the simple correla- tion analysis. TABLE 1O.-Cross-section regression equations: Prices Independent variable Regression coefficient Partial correlation coefficient Beta coeffi- cient Standard error of beta coefficient 1947-53: Percent change: Output Direct labor costs per unit of output per total worker man-hour - 1953-58: Percent change: Output Direct labor costs per unit of output per total worker man-hour 0.1891 .4982 .2395 1 9367 0.2516 .3730 .3681 1~ 7630 0.2365 .3661 .3261 . 0724 0.2522 .2522 .2284 . 2284 Regression constants: 1947-53 6.84 1953-58 3.76 Multiple correlation coefficient: 1947-53 R = .4209 1953-58 R =1.7916 Coefficient of multiple determination: 1947-53 B 2 .1772 1953-58 B 2=1 6266 Degrees of freedom~ N-3=13 1 Significant at the 5 percent level. Similar relationships were shown by time series analyses, although the small number of observations and the major structural shifts which occurred in the economy during the 1947-58 period limit the usefulness of time series for this purpose. In table 11, the simple correlation coefficients are given for each two-digit industry, indicat- ing the relationship between price changes and several other variables from 1947 to 1958. Table 12 summarizes the results of a multiple regression analysis, relating the percent change in prices to (1) the percent change in output, and (2) the percent change in gross hourly earnings. In both cases, the price-output relationship was very weak, while the price-gross hourly wage relationship was strong. In 8 of the 16 industries, the price-wage correlation was significant at the 5-percent level; in 2 more, it was close to that level of significance. In addition, the simple correlation coefficients between price changes and profit levels were at or close to 5-percent significance level in nine industries. Thus the time series data tend to corroborate the general results of the cross-section analysis. PAGENO="0025" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 17 I'ABLE 11.-Simple time series correlation coefficients between annual changes in prices and selected variables, 1947-58' Industry Percent change in wholesale price index on- Percent change: Gross hourly earnings Percent change: Ouptut Percent change: Productivity per produc- tion worker man-hour Rate of return on equity, before taxes 20. Food 11. Tobacco 22. Textiles 23. Apparel 24. Lumber 25. Furniture 26. Paper 28. Chemicals 29. Petroleum ~0. Rubber 31. Leather 32. Stone, clay, and glass 33. Primary metals 34. Fabricated metals 35. Machinery, except electrical 36. Electrical machinery 0.400 .132 . 651 . 816 -.187 . 655 .497 .378 . 565 .245 . 574 . 826 . 692 . 755 . 727 . 652 -0. 287 -.117 . 413 -. 028 .780 -. 065 .275 . 357 . 587 .543 -. 318 . 265 . 442 . 159 .419 . 236 -0. 517 .270 -. 683 -. 232 .213 -. 414 -.065 -. 145 . 476 -.562 -. 270 -. 093 . 062 -. 053 -. 545 -. 498 0. 152 .031 . 608 . 126 .914 . 655 .771 . 599 . 685 .724 -. 016 . 228 . 675 - 620 . 495 . 280 1 The 5 percent level of significance is 0.6021 the 1 percent level is 0.7348. Sources: See app. A. TABLE 12.-Time series partial correlation coefficients between annual changes in prices, output, and hourly earnings, 1947-58 1 Industry Partial correlation 2 of percent change in price on- Change in output Change in gross hourly earnings 20.Food 21. Tobacco 22. Textiles 23. Apparel 24. Lumber 25.Furniture 26. Paper 28. Chemicals 29. Petroleum 30. Rubber 31. Leather 32. Stone, clay, and glass 33. Primary metals 34. Fabricated metals 35. Machinery, except electrical 36. Electrical machinery -0.037 -.114 .290 .202 . 807 -.036 .331 .319 . 534 . 501 -.277 -. 081 . 238 -.108 -. 138 . 276 0.416 .129 .604 .825 -. 375 .653 .523 .342 . 508 .027 .558 . 813 . 623 .751 . 663 . 661 The 5 percent level of significance is 0.6319; the 1 percent level Is 0.7646. 2 These are partial correlation coefficients corresponding to the regression coefficients in the equation P=a+bO+cWo, where P is the percent change in wholesale price, 0 is the percent change in output, and Wo is the percent change in gross hourly earnings. TRENDS IN SPECIFIC MANUFACTURING INDUSTRIES On the basis of the data on prices, wages, productivity, and profits, indexes were computed for each two-digit industry for which data were available, reflecting trends in the wholesale price index, direct labor costs per unit of output per total worker man-hour, and re- turns to capital (profits before taxes plus depreciation and depletion charges) per dollar of sales. These indexes are described in appendix A. In order to compare the movements of each of these variables both within each industry and among industries, ratios were computed to show the trends of each variable in each two-digit industry relative PAGENO="0026" 18 PRICES AND WAGES IN MANUFACTURING INDUSTRIES to the trend in manufacturing as a whole. The resulting ratios ar included in appendix C. While these indexes are probably indicative of general trends iii manufacturing industries, their limitations should be carefully noted, It has already been pointed out that the scope and method of classi- fying these various series differ, depending largely upon the naturc and availability of the data involved. Thus profits are on a corporate basis, earnings, employment, and output are on an establishment basis, and prices on a product basis. In addition, the series included are not exhaustive, i.e., they do not reflect all the costs (including profits) which go to make up the final price. In particular, no data are available on the costs of materials; also, indirect taxes may be an important element of price in a few instances, as in tobacco products. Finally, the indexes of direct labor costs per unit of output very prob- ably understate the actual rate of increase in labor costs, since they are based on the trend in gross hourly earnings of production workers only; no figures are available to show average hourly labor costs of both production and nonproduction workers. The resulting indexes probably understate the rate of increase in labor costs because (1) the rate of increase of employment of nonproduction workers has con- siderably exceeded that of production workers; in fact, the total number of production workers employed in manufacturing in 1958 was considerably lower than in 1947, whereas employment of non- production workers had risen by over 50 percent, and (2) because the average level of hourly compensation for nonproduction workers very probably exceeded the average hourly earnings of production workers. Thus, the shift in "employee mix" would result in a greater rate of increase in labor costs than would be reflected in the trend of earnings for production workers alone. Since the following data is presented in terms of basic trends rela- tive to manufacturing as a whole, some preliminary discussion of the underlying movement of prices, costs, and profits in all manufactur- ing may be helpful. These figures are presented in table 13. It is clear that the manufacturing price level has risen steadily since 1947, with the exception of a fairly substantial reduction of 3.2 percent in the 1949 recession and a smaller downward readjustment after the sharp speculative rise which accompanied the outbreak of the Korean war in mid-1951. TABLE 13.-Basic trends in manufacturing, 1947-58 [1947-49=100] Year Wholesale price index: All manu- factures Direct labor costs per unit of output Profits plus depreciation and depletion as percent of sales Materials and compo- ments for manufac- turing Production worker employment Nonproduc- tion worker employment 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 95.9 103.8 100.3 104. 1 115.5 112.9 112.8 113.7 - 115.0 119. 5 123.2 ~124.5 96.3 101.6 101. 6 99.8 109.2 111.6 114.6 114.5 112. 1 115.8 118.8 120.4 102.3 105.0 92. 7 119. 0 114.6 99.7 100.6 98.0 - 112.8 109.3 102.3 1 92.7 96.4 104.0 99. 6 104. 5 118.4 113.4 115.2 115.4 118.2 123.7 126.9 127.2 103.4 102.8 93.8 99. 6 106.4 106.3 111.8 101.8 105. 6 106. 7 104.4 94.2 97.4 101.8 100.8 103. 5 115.2 124.6 133.0 133.0 136.8 144.8 151.2 148.8 Sources: See app. A. The "Materials and components" index is from the Economic Report of the Pres. dent, January 1959, p. 103. ____ -- PAGENO="0027" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 19 SOURCES AND LIMITATIONS OF DATA During the early part of this period from 1947 to 1950, labor costs and profits all rose considerably. From 1950 to 1954, profit margins declined, then again rose sharply with the strong recovery of 1955. During the subsequent period to 1957, they declined moderately, then fell considerably in the 1958 recession. By the end of the period (1956-58), the proportion of the sales dollar going into profits plus depreciation and depletion was at approximately the same level as in 1947-49. The pattern of movement, however, has been for gross margins to rise sharply at the beginning of boom periods and to recede gradually during the subsequent years of "leveling off." The index of direct labor costs per unit of output has shown a continuing upward trend over the period, except for relatively small declines in 1950 and 1955, undoubtedly reflecting the increase in productivity which normally accompanies a strong upswing in out- put.'1 Table 13 also shows the very considerable shift in employment toward nonproduction workers. It has already been noted that one probable result of this shift in employment patterns has been to raise the rate of increase in total labor costs per unit faster than is reflected in the index of unit direct labor costs. An additional implication of the rising importance of nonproduction worker employment is the fact that labor costs have become less responsive to cutbacks in production during recessions; this is clearly shown by the very much greater cutbacks in production worker than in nonproduction worker employment during the recessions of 1949, 1954, and 1958. By the same token, as Schultze has pointed out, one major reason for the rapid rise in labor costs per unit from 1955 to. 1957 was the more than 10 percent increase in nonproduction worker employment as contrasted to the rise of only 3.5 percent in manufacturing produc- tion; the result, of course, was to hold down the rate of increase in productivity per total worker man-hour.'2 One must presume, however, that in the long run, producers expect the shift in employee- mix to represent a profitable choice; in the 1955-58 period, however, it probably had a considerable adverse effect on unit labor costs and profit margins. The data included in appendix C provide a basis for comparing the general trends of prices, wages, profits, and other variables over time, both within and between industries. In table 14, ratios of the specific industry indexes to the index of all manufacturing are shown for several important variables, as of 1957." The year 1957 is used in order to avoid the effects on the data of the 1958 recession. For purposes of analysis, the industries have also been classified according to the extent of concentration and the strength of unionization in each. It should be stressed, however, that these trends cannot be considered as anything more than suggestive; considerably more detailed studies would be required within each sector before a more 11 It must be stressed here that the trend indicated by the index of profits margins cannot be meaningfully compared to the trend indicated by the index of labor costs per unit of output, since the basis of computing the indexes isquite different. The index of profit margins is a measure of profits deflated by sales. The index of labor costs per unit, on the other hand, is a measure of direct labor costs deflated by man-hour productivity. The profits index reflects a percentage, whereas the labor cost Index reflects an absolute amount. 12 See Charles L. Schultze, "Recent Inflation in the United States," Joint Economic Committee Study of Employment, Growth, and Price Levels, Study Paper No. 1. 13 It should be noted that we are here comparing the ratios of indexes, rather than the indexes of each variable directly. Thus the problem cited in footnote 11 does not arise. PAGENO="0028" 20 PRICES AND WAGES IN MANUFACTURING INDUSTRIES firm evaluation of the role of concentration and unionization can be made. TABLE 14.-Ratio of indexes in specific industries relative to all manufacturing, 1957 [1947-49 ratio=100J Straight Labor Concen- Esti- Industry Whole- sale price Output time hourly earnings costs per unit of output Returns to capital tration ratios (percent) mated union strength (percent) Ailmanufacturing 100 100 100 100 100 100 100 Highly concentrated, strongly unionized industries: . Primary metals 132 90 107 119 113 81 75-100 Rubber 119 91 99 107 109 51 75-100 Stone, clay, and glass 118 99 102 103 117 58 50- 75 Electrical machinery Motor vehicles 113 110 135 87 98 98 94 NA. 92 100 72 96 75-100 75-100 Petroleum 102 96 102 100 91 99 50- 75 Highly concentrated, weakly unionized industries: Tobacco 103 79 104 08 139 100 25- 50 Chemicals 89 137 107 87 121 59 25- 50 Low concentration, strongly unionized industries: Nonelectrical machinery - - 125 93 102 119 96 31 75-100 Fabricated metals 115 92 102 122 74 19 50- 75 Paper 105 107 103 106 83 5 50- 75 Apparel 83 82 82 95 83 8 75-100 Low concentration, weakly unionized industries: Furniture 106 96 06 99 77 7 25- 50 Lumber Leather Food 97 88 86 75 78 83 96 90 104 91 96 107 58 102 90 2 2 22 25- 50 25- 50 25- 50 Textiles 74 73 85 81 52 12 0- 25 Source: App. C. Nevertheless, at least some tentative observations may be made with respect to these figures. Perhaps the most striking are the trends in the primary metals industry. From 1947 to 1957, the wholesale price index rose to a level almost one-third higher than the price index for all manufacturing. Direct labor costs per unit rose by nearly 20 percent more, and returns to capital by 13 percent more than in all manufacturing. Yet these strong upward movements in relative prices, wages, and profit margins developed during a period in which output rose by considerably less than in manufacturing as a whole.'4 Among the remaining industries within the highly concentrated, strongly unionized group, no similar clear trends are evident. In general, their price indexes rose by more than the average; this was not consistently related, however, to the movement of hourly earnings, labor costs, or returns to capital. Straight-time hourly earnings increased in all of these sectors by almost exactly the same amount as in manufacturing as a whole. In rubber and stone, clay, and glass, however, labor costs and capital returns both rose more than all manufacturing average; in electrical machinery and petroleum, on the other hand, the opposite was generally the case. The two industries characterized by high concentration and weak union organization-tobacco and chemicals-reveal some interesting trends. In each of them, hourly earnings rose by more than the manu- 14 For a much more comprehensive analysis of these trends and the causal factors underlying them, see Otto Eckstein and Gary Fromm, "Steel and the Postwar Inflation", Joint Economic Committee Study of Emp'oyment, Growth, and Price Levels Study Paper No. 2. PAGENO="0029" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 21 facturing average; productivity also increased sufficiently, however, that labor costs per unit rose by less than the average, particularly in chemicals. Also, the wholesale price index in these two sectors showed rio significant relative upward movement (chemicals dropped con- siderably, in relative terms). The most striking figure which emerges, however, is the very considerable rise in total returns to capital; ~n both industries, these margins rose by very much more than in all manufacturing and by considerably more than any other individual sector. Among the low concentration, strongly unionized industries, some- what opposite trends are suggested. Once again, hourly earnings fol- [owed the all manufacturing trend; labor costs per unit, however, rose by quite a bit more than the average, except in apparel, and the same bendency is evident in the fact that prices in all of these sectors except ~ppare1 rose by more than in all manufacturing. Porfit margins, iowever, tended to decline. Finally, those industries characterized both by a considerable ~mount of competition in the product market and by weak union )rgarnzation all showed fairly similar characterstics. In general, iourly earnings and labor costs per unit rose by somewhat less than n all manufacturing; profit margins, on the other hand, fell quite ;ubstantially behind in most instances. [n addition, output in these ndustries increased by considerably less than in manufacturing, al- ~hough it will be recalled that no significant correlation was found Jetweell output, prices, and wages on the basis of year to year changes, r changes during major subperiods. IV. SUMMARY The primary purpose of the preceding discussion has been to pre- ;ent a body of data and to describe the statistical procedures utilized n analyzing that data as part of an evaluation of the forces under- ying the postwar inflation in the United States. Among the most mportant of the findings of this statistical analysis are the following: 1. No important relationship was found between percent changes n straight time earnings and either percent changes in output, per- ~ent changes in production worker employment, or percent changes in )utput per production worker man-hour. On the other hand, the lata indicated a strong interrelationship, particularly after 1951, be- ween percent changes in straight time hourly earnings, profit levels measures as a rate of return on stockholders' equity), and 1954 con- ~entration ratios. These general relationships were supported by )oth simple and multipe cross-section and time series analyses. They vere also given support by an analysis of wage "patterns" during the )ostwar period. 2. Based on the most recent available estimates of union strength, there was no generally applicable relationship between union strength rnd wage increases in various industries. While these estimates are ~onsiderably outdated, it is probable that union strength has not thanged greatly in most industries over the past decade. 3. One of the factors underlying the upward movement of hourly ~arnings during the 1956-58 period was the long-term contracts )rigmating in the automobile and steel settlements of 1955 and 1956, vhich provided for automatic annual productivity increases and cost- PAGENO="0030" 22 PRICES AND WAGES IN MANuFACTURING INDUSTRIES of-living adjustments through 1957, 1958, and 1959. These contracts established a pattern for several other major industries in the economy. 4. No important re1ationship~ were found between percent changes in price and percent changes in output, particularly up to 1954; even after 1954, the only statistically significant relationship appeared in the 1954-55 upswing. In addition, price changes were unrelated to percent changes in productivity per production worker man-hour. 5. Changes in price were most clearly related to profit levels throughout most of the postwar period. A strong relationship to changes in gross hourly earnings also developed after 1951. No con- sistently strong relationship was found between price changes and concentration ratios. In closing, it should again be noted that important limitations exist with regard to the n tture, scope, and comparability of the data. Nevertheless, it is hoped that the preceding discussion wifi provide a more complete analysis of the data than has been previously available. PAGENO="0031" APPENDIXES APPENDIX A SOURCES OF BASIC DATA The data underlying the analysis of the movement of manufacturing wages nd prices from 1947 to 1958 are presented in tables A-i to A-21, for each two- igit standard industrial classification. The sources and methodology used in btarning the data are the following: I. WHOLESALE PRICE INDEXES For all two-digit classifications except printing and publishing, transportation quipment, and instruments, wholesale price indexes were computed by recorn- ining the appropriate wholesale price index groups and subgroups, weighted y their relative importance in 1954. In some cases, these special indexes were omputed by the Bureau of Labor Statistics for the use of the author; in others, ~dexes were computed by the author based upon information provided by the ~ureau of Labor Statistics regarding the appropriate subgroups to be included. 4ost of the indexes are not completely comprehensive, in that they do not include 11 the wholesale price index subgroups which properly should be included; in ddition, in order to minimize computations, some small subgroups were some- imes included which should properly have been excluded. The final indexes, owever, comprise at least 80 percent of the total weights of items which would e represented by as accurate an index as could be constructed from current ems included in the wholesale price index. The composition of each two- igit standard industrial classifications group is as follows: Relative importance in WPI, December 1957 (based on 1954 SIC group WPI groups weights) 0. Food 12. 73 02 Processed foods Source: Wholesale Price Index. 1. Tobacco . 97 14-1 Cigarettes 14-2 Cigars 14-3 Other tobacco products Source: Computed by author. 2. Textile mill products 3 18 03-1 Cotton 03-2 Wool 03-3 Manmade fiber textile products 03-4 Silk Less: 03-31 Filament yarns and fibers Source: Computed by BLS for author. 3. Apparel and other finished textile products 3. 22 03-51 Womens'; misses', and juniors 03-52 Mens' and boys' 03-54 Infants' and children's 03-55 Underwear and nightwear Source: Computed by author. 28 PAGENO="0032" 24 PRICES AND WAGES IN MANUFACTURING INDUSTRIES Relative Importanc in WPI, December 1957 (base on 1954 SIC 9TOU~ WPI groups weights) 24. Lumber and wood products 2. 97 08 Lumber and wood products Source: Wholesale Price Index. 25. Furniture and fixtures 1. 3C 12-1 Household furniture 12-2 Commercial furniture Source: Computed by author. 26. Paper and allied products 5. 17 09 Pulp, paper, and allied products Source: Wholesale Price Index. 27. Printing and publishing Not availabk 28. Chemicals and allied products 5. 8~ 06 Chemicals and affied products Source: Wholesale Price Index. 29. Petroleum refining and related products 4. 2~l 05-5 Refined petroleum products Less: 05-56 Crude petroleum 05-57 Natural gas Source: Special published BLS Index. 30. Rubber and related products 1. 3~ 07 Rubber and rubber products Less: 07-11 Natural rubber 07-12 Synthetic rubber Source: Computed by BLS for author. 31. Leather and leather products 1. 27 04 Hides, skins, leather, and leather products Less: 04-1 Hides and skins Source: Computed by BLS for author. 32. Stone, clay, and glass products 2. 1~ 11-48 Abrasives 12-61 Dinnerware 12-62 Glassware 12-63 Glass containers 13-1 Flat glass 13-22 Cement 13-31 Building block 13-32 Concrete pipe 13-4 Structural clay products 13-5 Gypsum Source: Computed by author. 33. Primary metals 7* i~ 10-13 Semifinished steel products 10-14 Finished steel products 10-15 Foundry and forge shop produ cts 10-16 Pig iron and ferroalloys 10-22 Nonferrous refinery shapes 10-24 Nonferrous secondary shapes 10-25 Nonferrous mill shapes 10-26-01 Bare copper wire Source: Computed by BLS for author. PAGENO="0033" PRICES AND WAGES IN MAN1JFACTURING INDUSTRIES 25 Relative importance in WPI, December 1957 (based on 1954 SIC group WPlgroups weights) 34. Fabricated metal products 5. 28 10-3 Metal containers 10-4 Hardware 10-5 Plumbing equipment 10-6 Heating equipment 10-7 Fabricated structural products 10-8 Fabricated nonstructural products Source: Computed by BLS for author. 35. Machinery, except electrical 7. 81 11-1 Agricultural machinery 11-2 Construction machinery 11-3 Metalworking machinery 11-4 General purpose machinery 11-5 Miscellaneous machinery Source: Computed by BLS for author. 36. Electrical machinery 7. 11 11-7 Electrical machinery 12-5 TV, radio, and phonographs 10-26 Wire and cable Source: Computed by BLS for author. 37. Transportation equipment Not available 371. Motor vehicles 5. 55 11-8 Motor vehicles Source: Wholesale Price Index. 38. Instruments Not available Total weights included in indexes above 77. 26 Total weight in WPI represented by "all manufactures" index 82.95 II. GROSS AND STRAIGHT TIME HOURLY EARNINGS Data on gross hourly earnings were obtained directly from published data of the Bureau of Labor Statistics. The figures are based upon reports from cooperating establishments, and pertain only to production and related workers. Straight time earnings were derived from the gross figures by applying adjust.. ment factors contained in the May 1950 Monthly Labor Review. The adjust-. ment factor is designed to exclude only the premium pay for overtime at the rate of time and a half for work in excess of 40 hours per week. III. PRODUCTION AND NONPRODUCTION WORKER EMPLOYMENT Both series were derived directly from data published by the Bureau of Labor Statistics. The number of production workers is published directly on the basis of reports from cooperating establishments. The number of nonproduction workers was obtained by subtracting production workers from the number of total employees in each 2-digit industry. iv. OUTPUT These indexes are based on the 1947 Standard Industrial Classification. All but the index for motor vehicles were provided by the Federal Reserve Board at the request of the Joint Economic Committee. They differ from the regularly published indexes of industrial production of the Reserve Board in that the latter were based on 1947 value added weights, whereas the indexes used here are based on 1954 value added weights. The 1954 weighted indexes were developed as part of the Reserve Board's testing procedures; they do not constitute official Federal Reserve Board indexes, nor does the Board necessarily endorse the use of 1954 weights. PAGENO="0034" 26 PRICES AND WAGES IN MANUFACTURING INDUSTRIES It may also be noted that the Board has recently published revised indexes, using 1957 weights for the period beginning with January 1953, and based upon the new 1957 Standard Industrial Classifications. The index for motor vehicles is based upon the published Federal Reserve Board index, with 1947 weights. V. PRODUCTIVITY A. Output per production worker man-hour.--This series was computed by di- viding the Federal Reserve Board output index (1954 weights) by an index of production worker man-hours. Production worker man-hours was computed by multiplying production worker employment by average weekly hours, as published by the BLS. B. Output per total worker rnan-hour.-----This series was computed by dividing the Federal Reserve Board output index (1954 weights) by an index of total worker man-hours. Total worker man-hours represents the sum of production worker man-hours (see A, above) plus the product of nonproduction worker employment times 40 hours per week. VI. PROFITS: RATES OF RETURN AND MARGINS A. Rate of return on stockholders' equity.-The basic data on profits before and after taxes, and on stockholders' equity were obtained from the Quarterly Financial Report for Manufacturing Corporations, published by the Federal Trade Com- mission and Securities Exchange Commission. The entire profits and other data for each corporation are included within any given SIC group on the basis of the corporation's major source of gross sales receipts. The series is based as nearly as possible on the sample used by the FTC-SEC during the period 1956-57. Three breaks in the sample coverage occurred in the first quarter of 1951, the first quarter of 1956, and the first quarter of 1958. In each case, the data were revised to the 1956-57 sample by linking the series on the basis of as many overlap quarters as were available. Annual profits are the sum of the four quarter figures; stockholders' equity is as of the end of the fourth quarter. B. Profit margins, and depreciation and depletion charges per dollar of sales.- Basic data on sales, and depreciation and depletion charges were obtained from FTC-SEC Quarterly Financial Reports, utilizing the same techniques described in A, above. VII. DIRECT LABOR COSTS PER UNIT OF OUTPUT The indexes of direct labor costs per unit of output per production worker man-hour, and of direct labor costs per unit of output per total worker man-hour were derived by dividing the index of gross average hourly earnings by the index of productivity per production worker man-hour and per total worker man-hour, respectively. VIII. CONCENTRATION RATIOS These ratios have been computed on the basis of data contained in the report on "Concentration in American Industry," prepared for the Subcommittee on Antitrust and ~\`Ionopoly of the Senate Committee on the Judiciary, 85th Congress, 1st session. The figures used were taken from table 37, "Share of product ship- ments accounted for by largest companies, 1954." In arriving at the ratios used, the total values of product shipments in each 4-digit industry (within the given 2-digit classification) showing a 50 percent or more concentration ratio for the eight largest companies constituted the numer- ator. The denominator represented the total value of product shipments for the entire 2-digit industry. The resulting concentration ratios, therefore, reflect the proportion of the total value of product shipments in each 2-digit group repre- sented by "concentrated" 4-digit industries (those in which the eight largest firms accounted for 50 percent or more of the total value of product shipments in 1954) in that group. The concentration ratios for 1954 were: PAGENO="0035" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 27 20 Food and kindred - 22. 4 21 Tobacco 100.0 22 Textile mill 11. 9 23 Apparel 5. 7 24 Lumber 1. ~ 25 Furniture and fixtures 7. 3 26 Paper 5.0 27 Printing and publishing 2. 3 28 Chemicals 59. 4 29 Petroleum refining 99. 1 30 Rubber 51. 2 31 Leather 2.3 32 Stone, clay, glass 57. 9 33 Primary metals 81. 1 34 Fabricated metals 19.3 35 Machinery, nonelectrical 31. 1 36 Electrical machinery 72. 0 37 Transportation equipment 83. 2 371 Motor vehicles 96. 3 38 Instruments 69. 9 Tables A-i to A-21 are presented below. PAGENO="0036" 28 PEICES AND WAGES IN MANIJFACTURING INDuSTRIES o Co C- C~ Co Co Co C'- C~ C'. 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~) cC ~ 0000C~to~ , ~ ~ U) C)C)C)C)C)C)~'cCC)t-00C) ~-~-c~ C)©CC©C-)C)C)QCCC)C)CC CO CC CC 0) C) 9 C CO - H PAGENO="0040" 32 PRICES AND WAGES ~ MANUFACTURING INDUSTRIES V~) ..~ c~ ~ ~ ~ ~o >~ . ~ .~ 2-~ ooc~ ~ ~ - t~- c~ ~ c~ ~ ~ c - ~ © ~ 0 ~ ~0'-~ ~`~E . ~ 0.~ ~ ~L2 .~ ~ ~ © t- © cq 0 ~c3c~c,~3 ~ ~ 0 .~ ~ cr~~t~ ~ ~ 6 0~ .~ c~ .~ ~9 ~1 ~ ;-.~ c~4I~ ------- cq c~ © ~ `~ .~ © t~- © ~ ~- , ~ 0 0. ~hi~ .~ ~ ~ 0 ~ ~-.0Q ©~ o~o ~ c~-t~ 0000 - 6 ~ ?~ ~ ~ ©~C~© ~ .~ .~ - - 0 0 ~- ~ .~0 ~ ~~C) ~ ~ 0~ ~ 0.~ t~-c~© ~x~c 0000 ---~ e~ C~ c'i ~ ~t-~o~~r-oo dd-i.-~.4 ~ 000- - ~ 0 0 PAGENO="0041" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 33 C) C) C) C) ~C) C) ________ _________________ ..g3 C) ~ .E 6 ~ ~ C) ~ C)- .~ :~ C ?~ ~ H C) C) C) - C) C) t- C) C) C) ~ ~ ~o$_o~ Q~C~ p~o~ ~ C) C) C) C) C) C) C) C) C) C) C) C) ~ ~) ~ ~ U .~ ~I:~ ~ U ~ ~ C)C)C)C) ~ ~3 ~ C .~ ~ C)CCC) ~ ~ 6 ~p .~ ~ .~ H -`-~Qo ~ ~ ~ t'- C) C) C) t- t- C) C) C) C) C) C) ~ ----C)----- ~>) 0 ~ It~ ~ ,~ ~ H 6 ~ ~~oQ ~ ~ ~ `~ C) C) C) C) C) t- C) C) C) ~ C) C) C) C)~?~) C) C) C) C) 6 ~ ~-)~0 p~ C) C) C) t'- C) C) C) C) C) C) t~- C) ~ ;>) ,~ ~C) .~o ~ )d~ .~ ~ . f~Q - ~ ~ C)~)C)C)C)C)C)C) c~s3.~cS C) C) C) C) C) C) C) C) C) C) C) C) -4,-).-C)-4,-),-4 r~ C)C)C)C)C)C)*C)~C)*C)*C)*~C)* ~ ~n C) ~-C)C)C)C)C)C)C)C) t-C) PAGENO="0042" 34 PRICES AND WAGES IN MANUFACTURING INDUSTRIES .~ ,~ ~. ~ -?~ Q &22 ~ 0 ~ .0~ ~ ~l I.- - ~ ~~`-l~ *~ ~ ~ ~ ~ ..0~ 0 p~o~ ~ z.. c~ ~0 ~ t.. ~ r-,.t~~x5 ~ ~ 0~ ~ II *s~ ~.0 0.~ ~ c~t~ ~. ~ ~-~--~ ~ ;-~ ~ c~ ~ ~o ~ ~ ~ ~ 6 ~ ~ .~ :P .~ .-~Q0 ~ -0~ )~c~ -~-~ t.. ~ ~ ~ !I~1 ~ , ~ .~ 0~ ~ ~ ~ ~ ~ ~ 6 ~_0Q ~ ~ ~. ~ co cq ~ ~ -----~-?-~ 6 ~00 ~ ~ ~ t- C~ t'- c~3~c$d ~ , ,~0 - 0 ~.0 ~ oO ~ 00 `0, 0 ~ , .~00,-, ~ 0,~ ©t..~0 ~dc~ co~©c~-o~coco~coco ~-~-`-"-$co C~ ~- C~ C~ ~ co-o.-~ 0000 C~1 0 -----~----- 0t-01C~00,.~ c~Sdc~ ~ o o - ~0 000000000000 PAGENO="0043" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 35 U) 00 0) or3 00000000000000 Cl 000000 0- 00000)00 Cl 0100 000000 `So) ~ Øqpj~ 00009 ~ ).).0 ~ ~ 00 6~'- ~ ~1!!!_ 00000000000000' ~ ~-4,-400,-4,-~ 00 -4 000)0 ~ 4-~4_,0~ 0)~)) E e~ `~ ,- 0000 `~ 0000000000 0000©0000'~'~4~ 0~ o ~ `S~ ~ ~ ~3 ~ ~ C000000'~,400000'C00 ~d~ddc~-~cr' 2 ~ .~ ~~43 0000010 ~30000~'~ ~ 6 ~ ~ ~ `S~ ~ ~ ~ ~ 000)0 ~ ~ 0 ~ 0)~-0) s~_ t-000000U00©Cl0000'~' ~ 00 000000 6 ~ ~00)0 ~ .~ `-~o~ ~1i~1 `~ 00000000000000000-400-0' ~ 0)0000 `~ `-400 `-404000000 `04 ~-4~'*~' 0 Oo ~ 5 ~ I 0)~*)4 o~ Z00~~_~ 0)00©00~,'4000000 o~dc~o3c~ 0)00 00000000 c0'04 00)00000 0000000000000000000-0000 ~ .?~ to) 0)0 ~ ~ ,~Q ~ 4.3 `~o~ * 00 00C3C300C00000'04~U0000'0~ ~~~00P- 00000000000000000000 U) S 4 **...`~ ~ 000000000-~40000000000 . ~013034~,'c0 ~03~E 000000000000000000000000 ~ 00000000000000000-~00 ~. 00040 PAGENO="0044" 36 PRICES AND WAGES IN MA~1IFACTURING INDUSTRIES `~ ~ =c~ ~ ~ C ~ c~ c~ c~ 03 ;~ ~8 C ~ ~ ~ `~ C 0303 ~ 03~0303030303~-403~~ ~;_C~ Q~c~ ~ C C 03 03 t- C~ 03 ~ ~gg~g~ C~ C~ ~ ~ ~.s ~3 c~ 0 ~ C~-~ ~ ~ Thz~ ~ ;-~oD ~ ~+3 C~c~ ~ ~ ~ 0 ~ 0c3 ~ 03 0303 ~ ~ ~ - ~2 * ~ 0~-C ~__!:~ ~-__ -C 03 Ci ~ 0303CC CC C ~ ~~03~CC030303,-i03 ~C ~ ~CCCC?03 - C ~ `~ ~ `~ ~ ~ -03 ~ cC~ ~ ~ C ~C 03~ `Cci 03-03' 03' C C 03' ~ CCCC0303,-i,..i~ ~) CC ,~Q ~C'~ E+~o ~ ~030303C t~'S~~ ,?~ 0CC 0t0 ~ 00 ~ *~C) `~ +~ :~s ~.- ~ ci) ci CCC CCC CC CCC ~ ---,-i,-',-C CC ~ ~ .0 ~.E ,0 CC cC cC 0 z PAGENO="0045" PRICES AND WAGES IN MANUFACTURING INDUSTRIES II 37 C C ~ C - C) - ~ ~ ?~-) Cl Cl C) C) C) CC C) C) CC C) C) C) C) C) ~ CC C) C) I ~ C) 0) CCCI ~-l CCCI CI `~`~ +~ C ._~ :~ L~ ~ ~ ~4 1~ 6 ~ ~~)CC0 ~ ~)-~oC ~ C C) C C) C) C) C) C) C C- -4 C)C) ~. 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II 0) 0- C) `0 Ci CC C- CCC) C) Cl CC C) C) 0-CO C) C) C) C) C) C) C) C) C) C) C) C) PAGENO="0046" 38 PRICES AND WAGES IN MANUFACTURING INDUSTRIES q) `~&~ ~ ~ ~ C~ C~ ct~ r- ~ t- .~ ei c'~ ~-`~ - 0 o o o c~ co ~!L ;~ ~ ~ ~ ~ -~:~ ~ ~ I______________ ~c ~ ~ ~ O~ ~ v~; ~:-~~-~- o~ ~ ~ ~ ~ co~c~c~o ~ `-`~`-~-4 ~ -~- coo ~ co c~i c- t~- coo ~ ~ ~ 0~-~ ~ c~?z~ ~ O~c~ -~-~ c~ o t~- coo ~ O~~OO~4 ~oc~ tc ~ °°`~`~ I______________ ~- C - 0 ~ ° ~ `C C ~ CO~-~ o~o ~0~: 00~©cot~-o ~ ~ CC~ `C o~ ~o p-~ 0 co cq c'~ ~ ~ ~ ~ 0~0000~0c~c~O +~ *E~° ~ og~ .CC 0 C~ ~ c~ , `~o~ .C'~:'C ~ 0C~-~ ~- ~ ©~8cc ~ 0 00 ~ 000000 ~ ~ `C C 000 `~ 00 `CO `C PAGENO="0047" DC CD C) CD CD DC CD CD C.) C) C) C.) C) p PRICES AND WAGES IN MANUFACTURING INDUSTRIES CD DC CD - CD t~- CD CD CD DC DC CD DC DCCC - DC CD CD CD DC 39 ~5CC ~ ~ ~ C~CDcC ~ C~ ~ ~C~4~4 ;~ ~ 0 ~ ~ I-I 8 ~ ~ ~ ~ DC C)~ CD C) C'- C'- .)I 00 CD DC ~ ---~--,-4 -~..o ~ C)) 0 E DC DC C) CC CDt- -400 ~ C-CD CD ~ C.) 0.~ ~ ~ !J ~ ~ , ~ -~3:~ ~ ~ ~C/C C) .044~ C.CDCDCCD~~CCDCCDCDCDCCCD ~~C.~cS ~ ~ f~4~ ~Q0 ~ ~ ~ CD CD CDI'- CD - CD DC CD CC - DC CCDCDCDCDCDCC-~DCDCDCDC -4,-),') 8 ~ ~ ~CO~ ~ 4 `-4 CD -4CC - C) CD C'- CD DC CD ~ ~ , )~ 0 ~ ~ O C) C ~ ~ 6 ~ 4O~ ~ 0~ Z'0~ t- t'- CD CD DC DC DC CD CD ~CD ~ C~CDCD-C)~-C~ DCC) DCDC o~ ~ `0o-~ ~-0 p4~ DC ~-4 C) DC CD CC CD DC ~C CD - ~C ~ CDCCDCDCC)DCDCC) ~ )o `~ p I~ 4~ ~O .~ ~ CDCDDCCDDC')~CCCDDCCCCD CCC,.) ~ ~~C-I~ - ~ ~ ~ DC00DCDCCD')~C'~C~DCCDCDDC ~~~co3 ~ C) `C C C- 00CC DC - DC CD~ CD CD C- CCC) DCCC CCC) CCC) CCC) C) PAGENO="0048" 40 PRICES AND WAGES IN MANUFACTURING INDUSTRIES *~ c~ ~ ~ ~ ~ ~~Q9 ~ ~ ~ c~ - t~- - ~ ~ -~-~-~ P~'3~~ o.~ E~ ~ `~ ~ ~ - - - c~ ~ ~ ~ ~. ~ ~- - - ~ ~ ~ ~ `-~ 0~ ~ ~ ~ ~ C)~~ ~E c~-c~~ ~ ----------- ~-o~O ~ ~ ~ c c - Cl Cl Cl . .~ ~ ~ `3~ ~4 ~ ~ o~o ~ C~C~C~c~ ~ ~_Q ~ ~ p~ ~-c~ ~ ~ - ~ ~ ~ ~ ,~ ~ +~ ,C~ .~ ~- ~ - .~ - ~ - - - - C.. ~ - ~ ~ ----------~ c~4 o_.~_ ~ - ~ ~ ~ o~ - ~ C Cl t~- ~ ~ - ~ ~. ~ C Cl C- - ~ C.) - C.. ~ - C'~ - ~ CC C'- ~) PAGENO="0049" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 41 CO CO CO o~ - CO t~- I- t'- CO CO CO CO CO CO CO - ~ ~ +~ Q C) fi ~ ~ 0 ~.. ~ .-~ ~ ~ ~ PC~CO E cxICO - CO CO CO CO C~ .-~ CO `i~ CO CO COCOCOCOCO -~ ~ `C) - 0 ~" O~ 00) El- 0'~ !~ cC~ ~ ~j t~ CO CO ~ C) CO CO CO C~ CO CO CO&~COCO i.. -~- ~3 ~ 0.~C) ~ h `r~ - ~~00 ~ CO CO CO CO CO CO CO CO - CO ~ ~ c~0~ ~ ~ ~ ~>) ,2 ~ ~ 0 k ?~ 0 CO 0 CC ~OQ ~ ~ z~ CO CO CO CO CO CO CO CO CO CO CO ~`t~CO &r'Ci~COCO COCOCO~~CO1CO'~"O"~J' --4-CO co o~ CO~ ~o ~ CO CO CO CO CO CO CO CO C) CO CO CO COCOCOCO©COCOCO©0©CO ~ ~ .?~ ~ ~ `s~ ~ f CO * `~~C) .~ ~ CO C- C- C- CO CO CO CO CO CO CO C~C~~CO~COCO ~ - tZ~ CO CO ~` CO CO CO CO CO ~ o~ 50505-60----4 C- CO CO CO - CO CO ~ CO CO C- CO PAGENO="0050" 42 PRICES AND WAGES IN MANuFACTURING INDUSTRIES L r~1 c~ t- ~ ~ ~ Cl o - C~ C~ ~ `~D ~ ~ ~ -;-- .~ ~ `-C ii ~ ~j~I ~ Q0()~ cC ~ cC ~---~-4-- ~Ld~ ~ ~ `2~I~ cC ~" 0*cC ~ ~ `~ cC2 ~ ~ c~ -c~ I - - `cC ~ ~ ~ ~cC ~ ~ ~ t,'~r- ~ ~ ~ ~ ~E I~ `z,'C ~ 2~ ~h ~E r- cc Cl Cl CCCI CC ~ ~ ég~ ~ "~ocC -~.cC ~l'-~"~ ~" ~2 cC~ ~ ~ ~ `cC cC ~ cC cc ~0C) ~ ~ z'C~ - I C'- CC CCCI ~ cc cc `c' `ccc ~ ~ CCCC~ O~ ~c-~o c~4~ `ccc cc cc cc cc cc - ~d-~~C5C~ ~ ~cc ob~ `~cC ~ `C ~ ,- ~C ~ c~c+c cc CI~ccc~cr~-~c ~`~cc~c,5 ~ c/c ~ ~ . cc'ccc cc t~- cc `~c ,~c ~ ` `O~ ~`~`C cc ~CCr'-CC,-c'c,-c'C'cccCl ~ cc'c cc cc cc - Cl CC `C `Cr'- CC cc cc cc cc cc cc cc cccc cc cS cc PAGENO="0051" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 43 ~~5rrJ ~ ~ ~ fl ~ 6 ~ ~ ~ ~ ~X) C C~ t~- c~ ~ ~ ~2 `~ !~ ~ U `-~ ~ C~OOC~ CCO~ C ~ C'-4 ~ ~ ~ 0 ~ ~ 6 ~ ~ ~ ~, ~ E ~L~2 C E , ,~ C ~ ~ ~ £~ ~ C 6 ~ ~ ~ ~ ~- - ~ ~- ~ C t'- CC C C ~-4 C ~ - -~ ~`j ~ C o 2~ ~ CCC ?~ C C~ CC CC-CC C ~ C C CCC~-4-~ C C- -~ ~ OCC CC ~ ~ , -~0~ ~t:C p~ ~::~~: CC~CC -4-C ~CC,-4CC cOCoOCb -~d~~c5,-~ 1~2~ C C.) C C.) C.) C.) - CC C `-4 p p H C-CO CC C 04CC ~ C CC--CC PAGENO="0052" 44 PRICES AND WAGES IN MANUFACTURING INDUSTRIES C) C) C) C) C) C) C) C) C) ~- C C) - H o~ - ~ I~ ~ - cc = F- c-cc cc ~- ~ `-~ C) -~ C~ ~Q C ~<~C ,~.E I~ c-Ecco -~-~ ~ ~9?~c3 C ~ cc cc cc cc cc cc c-cc cc cc cc cc ~ ~ *c~ t. ccc ~ ~ 0 ~ ~ ~--3~--~ F'~ cc cc - cc cc ~ cc cc ccc -~ ~ ~~cc,-~-cccc -;-;;- 0-~ Cc ~ -~ 0~ 2~ -`C) ~ ~J ~ ~ - ccc ccc ccc cc ~ ~ cc ~ ~ ~ E~C ~ C)~ ~ ccc cc cc cc cc-c-c- - c- ~ ~-F ~ ~ ~: 0~_ ~ -z~ ~ - c- - ccc ccc cc c-cc ccc- cc ~ ~ ~c ~ ~ ~C ~ ~`-~~cc,-,-4 ~) 0 C~ E~ O~ -~ - $~0~ ~ CCO ~ t~~~cccccc ccccccc-cccr-c-ccc..cc ccccccccc~cc~ C~) cC IH ~ ccccccc-ccccccccc-cc~-~ ~ ~ .~ ~ ~g o ~ ~ --`-`-I- o r~ ccc F" ccc- cc ~ c-cc ccccc-cccccccc'F'cccccc o - oc~ If) ccc cc cc cc cc c5 ~` cc cc ~cc-~-- PAGENO="0053" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 45 C 4.) 4.) 4.) 4.) 4.) 44) `-4 H C) C) C) C) C) C) ~1' C) C) C) C) C) C) © C) C) 41) ~- C) t~ Cl C) t- 041) ~ C) C) C) C) C) C) C) C) C) C) ~ - -~ ~ e~ *~g 0 ~ 4~ * ~ ~ ~ ~ -4 ~ .~ ~ ~ ~ `~ C) C) C) C) C) t'. C) t- C) 1) ~ C) C) Cl C) C) C) C) C) C) C) C) C)-4-4~1-4 C))4) C) Cl C) 41- C) C) C) C) C) C) C) ~ -4-4~~*'~~ ~) 0~ ~c ~ 44-*0 0-~ ~ ~o R~ ~3 ~ -.~ C)C)C)C)41~C)~-4C)C) ~ 4-. ~ `p11) ~C ~ ~C)C)C)C)ttC) C)C)C)C)C)C)C)C)Cl 0 ~ 6 ~l. ~ ~ *~*0 4~ 4-. +14)0 ~ ~6 p.4~ C) C) C) ~ C) C) 41-- C) C) C) C) C)C)C),.)C)IC)C)C)C) -4 6 ~ ~ ~ ~ C) ~4~41- 41-C) C) ~ -4-4-4-4-4-4'-'--- , ~. -4 C) k ~ 14 ,~ ~ -4 6~ ~ ~04-. 000 Z©~~ - C),-1t~C)C)C)C)C)C)C)~C) ~ ~~~~C)C)C)-4C)C) 6 ~ C)~ ~+3Q ~ - - C) C) C) ~- C) C) - ** ~ L ~ -s~ 44~ CC `0 #~ ~b ~ *,l 0 ~ ~C).4lC)C)C)C)C)-l'C)~'C) ~I~C~&1C) C) C) C) C) - C) C) C) C) .1' C) C) --C)-----C)C)-4 , `C~ C)*~ C) 41-41- ~ ~ `1 `0 .~ PAGENO="0054" 46 PRICES AND WAGES IN MANIJFACTURING INDUSTRIES c~ to to - - to ~ - to `~tt ~ ~ ~ -----~ ;~ `s~ Q 0 r ~~OoQ~ ~ ~ ~ `t~ - c~i ~. t- t-. c~ t- to to ~toto©~-toÔ~to ----~--- *~ ~n ~ to t~ to r-to ~. to to `.tt o 04 ~ 0~ ~ ~ ~0 0~ L~ ~ .t~ toto~t~-~ ~ ~ fi c~+~ c~ ~ ~ t6:~ ~ ~ `~~0 ~ `~L~ ~ ~ ~E ~ggg~~ `~`~° 6 ~ ~. ~0O0 ~ ~ ~ -004 to to to c~ too ~ ~ `~l~-4 .9 0. ~ ~ ~ `0 0 - - .?~ ~ ~ 00 ~ OC) `0 ~ 6 ~ ~ ~ o~o ~ to to to to to to to to ~ -~ 6 0~ `0o.~ ~-~o p.~ to to CO to ~ toto tot- ~ too. to~4tototo CO - to to t. co to ~. to ~ ~O~4-~-4 ~. 0 r~ t'- CO - Co to to to too to - ~ too. to - Co to to ~ to to to ~`~°`° .0 ~ ~- -~ U) 0) 01 0) to to U) 0 to to 0 to 0 `0 0 to to to to to to to to to to ,0 0 0 0 0 z PAGENO="0055" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 47 Co Co Co Co C~) Co ~- CC .~ ~ Co CC CC CC CO CC C ~ ~CCCC~CCCo C) ;~ ~ ~ C~i.0 ~ ~ ~C~;_~ ~ ~ ~ ~ E~-oo ~ ~ E O~ ~Ek~ ~ :~ C/CO ,~.C4 ~C) çr~ `- ~ ~2~i CC) ~ C~,-C ~ ~ C 0 ~ ~ I~ `~`O /~ /C.CCO 0~~C) ~ ~ cb~1C~ ~ ~ ~ - OC ~ ~ ~ ~ ~ /COQ ~ o z.0~ -C CC CCCCCC©C//CC/C -CC C/C C/C ` ~C ,-4 ~4 ~C ~4 ,-C ,-C C/C ~~g1i~ ~ p~ CCCCCCCQ L CC/C .0~ c'C/~ ~-1~ CC `0 C~ +- ~ ~ CO CCCC~~ : 0 ~ ~C~C/-~ C/~ C/~ C/CC Co C/C /0CC/CC `CC/ CO ` ~C)0~ ~`~/C'0 C) .0 C) C) C) 0 PAGENO="0056" 48 PRICES AND WAGES IN MANUFACTURING INDUSTRIES C) C) C) C) t'. C) C) C) C ~ C C) C) C) C) t- C))- )~ ~c~_~c ~. .~ .~ ~ ~ )~- ~.)Z ~: - )_~* .)~ ~ -o--,*_S )- ~~-~)O ~ ~ ~-C S C) C) C) C) C) ~ c~ c~ ~ ~ -)C),-) C.~ ~ ~ <~ C)t~C) -~-~d ~ ~ II :~~i ~ ~:~iEE~~ ~)) .~ C ~ S ~ C ~ C) )-CQ ~ ~o Z-z~ )- t- t- t- t- C) C) C C C) C) C) ~ C) CCCC) C))C C)C))-C)C) c'~ ~ Cc.~ ~Co ~ t- C))- C) C) C) C) - ~) t- C) C) dc5~-~ C)C)~=~ ,~ ~ CC) .CC oC )i~ .~c) C) *~c~ ~ ..~) C) C)C)C)C)C)C)-)C)C)C)~ ~ ~ )-C)C)CC)p.C).~) ~ ~j~C ~C~5 C t- C) C) C - C) C) -~ C) C))- C) C C C C C PAGENO="0057" PRICES AND WAGES IN MANUFACTURING INDUSTRIES APPENDIX B CROSS-SECTION CORRELATION MATRIXES 1. Percent change: Straight-time hourly earn- ings 2. Percent change: Production worker em- ployment 3. Percent change: Output per production worker man-hour 4. Percent change: Output 5. Average return on equity before taxes 6. Average return on equity after taxes 7. Concentration ratio 1. Percent change: Straight-time hourly earnings 2. Percent change: Production worker em- ployment 3 Percent change: Output per production worker man-hour 4. Percent change: Output 5. Average return on equity before taxes 6. Average return on equity after taxes 7. ConcentratIon ratio 1. Percent change: Straight-time hourly earnings 2. Percent change: Production worker em- ployment 3. Percent change: Output per production worker man-hour 4. Percent change: Output 5. Average return on equity before taxes 6. Average return on equity after taxes 7. Concentration ratio 49 TABLE B-i .-Matrixes of simple cross-section correlation coefficients: Wages (N= 19) Variable 1 2 3 4 5 6 7 1947-48 1.0 0. 417 1.0 -0.248 -. 357 1.0 0. 195 609 - 486 1.0 1. Percent change: Straight-time hourly earn- ings 2. Percent change: Production workers em- ployment 3. Percent change: Output per production worker man-hour 4. Percent change: Output 5. Average return on equity before taxes 6. Average return on equity after taxes 7. Concentration ratio - 1. Percent change: Straight-time hourly earn- ings 2. Percent change: Production worker em- ployment 3. Percent change: Output per production worker man-hour 4. Percent change: Output 5. Average return on equity before taxes 6. Average return on equity after taxes 7. Concentration ratio 0.012 121 .394 463 1.0 0.138 .150 367 472 873 1.0 0.226 -- 276 396 .177 -. 108 071 1.0 1948-49 1.0 -0.050 1.0 0.162 -. 318 1.0 0.024 - 857 .186 1.0 0.616 -. 057 444 237 1.0 0. 777 -. 002 282 - 203 - 940 1.0 0. 336 -.202 107 -. 103 447 527 1.0 1949-50 1.0 -0.563 1.0 - 0.362 -.457 1.0 -0.372 .779 .142 1.0 -0. C87 .591 -.052 .654 1.0 -0.097 .518 .090 .653 .902 1.0 0.033 -.191 .293 .085 .307 .340 1.0 1950-51 1.0 0. 171 1.0 -0.247 -.464 1.0 0.078 .908 -.085 1.0 0.178 .715 -.254 .631 1.0 0. 127 .554 .017 .588 .869 1.0 0.045 .597 .093 .722 .361 .371 1.0 1.0 0.087 1.0 0.118 .431 1.0 0.039 .870 .793 1.0 0. 598 .620 284 491 1.0 0.707 .369 .081 210 .821 1.0 0. 283 .328 389 - 330 .458 .463 1.0 PAGENO="0058" 50 PRICES AND WAGES IN MANUFACTURING INDUSTRIES 1. Percent change: Straight-time hourly earnings 2. Percent change: Production worker em- ployment 3. Percent change: Output per production worker man-hour 4. Percent change: Output 5. Average return on equity before taxes 6. Average return on equity after taxes 7. Concentration ratio 1. Percent change: Straight-time hourly earnings 2. Percent change: Production worker em- ployment 3. Percent change: Output per production worker man-hour 4. Percent change: Output 5. Average return on equity before taxes 6. Average return on equity after taxes 7. Concentration ratio 1. Percent change: Straight-time hourly earnings 1.0 2. Percent change: Production worker em- ployment . 3. Percent change: Output per production worker man-hour 4. Percent change: Output 5. Average return on equity before taxes: 6. Average return on equity after taxes 7. Concentration ratio 1. Percent change: Straight-time hourly earnings 2. Percent change: Production worker em- ployment 3. Percent change: Output per production worker man-hour 4. Percent change: Output 5. Average return on equity before taxes:___ 6. Average return on equity after taxes 7. Concentration ratio:; 1. Percent change: Straight-time hourly earnings 2. Percent change: Production worker em- ployment 3. Percent change: Output per production worker man-hour 4. Percent change: Output 5. Average return on equity before taxes 6. Average return on equity after taxes 7. Concentration ratio 1.0 -0. 197 0.354 0.086 0.055 0. 146 0.428 1.0 -.172 .771 .323 .244 -.141 1.0 .457 1.0 .011 .259 1.0 .008 .232 .862 1.0 .391 .182 .512 .603 1.0 1956-57 TABLE B-i .-Matrixes of simple cross-section correlation coefficients: Wages (N=19)-Contjnued Variable 1121 3j 41516 I~ 1952-53 1.0 0.249 1.0 0.251 .082 1.0 0.332 0.550 - 897 - 782 .488 154 1.0 .724 1.0 0. 689 0.423 - 582 - 370 .205 .080 .603 .360 .806 .559 1.0 .537 1.0 1953-54 1.0 - 0.203 1.0 -0.279 -.310 1.0 -0.067 .705 .416 1.0 0. 628 -.083 .111 -.059 1.0 0. 520 .035 -.006 -.020 .907 1.0 0.463 -.235 -.264 -.471 .553 .598 1.0 1954-55 0.233 0. 102 1.0 -.155 1.0 0.383 .704 - 504 1.0 0. 514 - 413 .152 .500 1.0 0.600 - 343 .261 - 494 - 912 1.0 0.383 -. 142 .306 - 199 -447 - 460 1.0 1955-56 1.0 0.230 1~ 0 0.390 -.258 1.0 0.372 - 586 - 603 1.0 0. 546 - 561 - 378 .726 1.0 0.544 - 570 .328 .698 906 1.0 0.607 - 186 - 504 .480 .612 .755 1.0 PAGENO="0059" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 1. Percent change: Gross hourly earnings 2. Percent change: Production worker employment 3. Percent change: Output per pro- duction worker man-hour 4. Percent change: Output - 5. Percent change: Wholesale price index 6. Average return on equity before taxes 7. Average return on equity after taxes 8. ConcentratIon ratio 1. Percent change: Gross hourly earnings 2. Percent change: Pro du ö t ion worker employment 3. Percent change: Output per pro- duction worker man-hour 4. Percent change: Output 5. Percent change: Wholesale price index 6. Average return on equity before taxes 7. Average return on equity after taxes 8. Concentration ratio - 1. Percent change: Gross hourly earnings 2. Percent change: Production worker employment 3. Percent change: Output per pro- duction worker man-hour 4. Percent change: Output 5. Percent change: Wholesale price index 6. Average return on equity before taxes 7. Average return on equity after taxes 8. Concentration ratio 51 TABLE B-i .-Matrixes of simple cross-section correlation coefficients: TTTages (N=19)-Continued Variable 1 2 3 4 5 6 7 1957-58 1. Percent change: Straight-time hourly earnings 10 -0. 576 0.049 -0.440 0.392 0.484 0.549 2. Percent change: Production worker em- ployment 1.0 .079 .880 -.009 -.030 -. 532 3. Percent change: Output per production worker man-hour 1.0 . 527 .462 . 359 . 121 4. Percent change: Output 5. Average return on equity before taxes 6. Average return on equity after taxes 7. Concentration ratio 1.0 . 222 1.0 . 171 .883 1.0 -. 349 . 506 . 698 1.0 TABLE B-2.---Matrixes of simple cross-section correlation coefficients: Wholesale prices (N=16) VarIable 1 2 3 4 5 6 7 J 8 1947-48 1. 0 - 0. 423 1.0 -0. 361 -.439 1.0 0. 188 .647 .369 1.0 0. 093 .291 .024 .375 1.0 0. 029 .089 .404 .438 .339 1.0 0. 107 .110 .383 .458 .560 .888 1.0 0.333 -.161 .356 .206 .329 -.104 139 1.0 1948-49 1. 0 -0. 191 0. 152 -. 1.0 -.421 1.0 - -0. 106 .832 .133 1.0 0. 214 -.520 .328 -.416 1.0 0. 767 -.333 .534 -.045 .439 1.0 0. 888 -.239 .295 -.074 .335 .927 1~0 0. 595 -.125 .172 -.037 .287 .466 .615 1.0 - 1949-50 1.0 -0.371 1.0 . 0.303 -.489 1.0 -0. 151 .781 .104 1.0 ~ -0.055 -.050 .170 .073 1.0 0. 087 .735 -.092 .776 -.041 1.0 0. 126 .595 .097 .752 .113 .907 1.0 0.033 -.246 .288 -.013 -.019 .138 .256 1.0 PAGENO="0060" 52 PRICES AND WAGES IN MANUFACTURING INDUSTRIES TABLE B-2.-.L~1atrixes of simple cross-section correlation coefficients: TTT/iolesale prices (N= 16)-Continued VarIable 112 3 4 5 6 7 8 1950-51 1. Percent change: Gross hourly earnings 2. Percent change :Production worker employment 3. Percent change: Output per pro- duction worker man-hour 4. Percent change: Output 5. Percent change: Wholesale price index 6. Average return on equity before taxes 7. Average return on equity after taxes 8. Concentration ratio 1. Percent change: Gross hourly earnings 2. Percent change: Production worker employment - -- - 3. Percent change: Output per pro- duction worker man-hour 4. Percent change: Output 5. Percent change: Wholesale price index 6. Average return on equity before taxes 7. Average return on equity after taxes 8. ConcentratIon ratio 1. Percent change: Gioss hourly earnings 2. Percent change: Production worker employment 3. Percent change: Output per pro- duction worker man-hour 4. Percent change: Output 5. Percent change: Wholesale price index 6. Average return on equity before taxes 7. Average return on equity after taxes 8. ConcentratIon ratio 1. Percent change: Gross hourly earnings 2. Percent change: Production worker employment 3. Percent change: Output per pro- duction worker man-hour 4. Percent change: Output - 5. Percent change: Wholesale price index 6. Average return on equity before taxes 7. Average return on equity after taxes 8. Concentration ratios 1.0 - 0. 416 -0.389 1.0 -.268 1.0 0.237 .912 .117 1.0 0. 101 0.311 .052 .733 -.415 -.174 -.199 .616 1.0 .294 1.0 0.341 0-. 099 .616 .457 .0S3 .409 .615 .667 -.066 -.526 .885 .304 1.0 .409 1_0 1. 0 0.055 1.0 0. 007 .594 1.0 -0.036 .912 .829 1.0 1951-52 0. 375 .093 .035 -.065 1.0 0. 656 .450 .362 .365 .536 1.0 0. 723 .197 .171 .117 .624 .813 1.0 0. 173 .169 .216 .073 .581 .358 .488 1.0 1952-53 1.0 - - 0.383 1.0 0.203 -.204 1. 0 0. 491 .837 .336 1.0 0. 546 .275 -. 171 .176 1.0 0. 725 .666 -. 094 .547 .490 1.0 0. 783 .525 . 094 .538 .432 .800 1.0 0. 595 .201 -053 .212 .595 .523 .622 1.0 1.0 0.458 1.0 -0.257 -. 327 1.0 0.160 .644 474 1.0 0. 620 -. 027 -.215 -. 247 1.0 0.794 088 -. 023 -. 018 .715 1.0 0. 699 145 -. 123 -. 023 505 888 1.0 0.517 -. 058 -.443 -. 454 387 .515 .642 1.0 PAGENO="0061" PRICES AND WAGES IN MA1~WFACTURING INDUSTRIES 53 TABLE B-2.-ltlatrixes of simple cross-section correlation coefficients: Wholesales (N=19)-Continued Variable 1 2 3 4 5 6 7 8 1.0 -0.173 0.492 0.264 -0.098 0.037 0.202 0.471 1.0 -.170 .731 .614 .449 .312 -.067 1.0 .508 1.0 -.418 .283 -.015 .358 .007 .299 .351 .274 1.0 .404 .442 .193 1.0 .853 .513 1.0 .688 1.0 1956-57 1. Percent change: Gross hourly earnings 1.0 0.390 0. 368 0. 597 0. 551 0.660 0.660 0. 541 2. Percent change: Production worker employment 1.0 -. 456 .482 . 660 . 448 . 471 . 170 3. Percent change: Output per pro- duction worker man-hour 1.0 . 521 -. 100 . 283 .241 .359 4. Percent change: Output 1.0 .397 . 627 . 617 .391 5. Percent change: Wholesale price index 1.0 . 585 . 711 . 617 6. Average return on equity before taxes 1.0 .883 .622 7. Average return on equity after taxes - 1.0 . 820 8. Concentration ratios .__ 1.0 1957-58 1.0 -0.411 0.183 -0.172 0.308 0.521 0. 598 0. 577 - 1.0 .301 .895 -.047 -.024 -.020 -.441 1.0 .677 .329 .531 .398 .007 1.0 .115 .253 .207 -.281 1.0 .629 .276 -.114 1.0 .877 .525 753 1.0 1. Percent change: Gross hourly earnings 1. 0 0.457 0. 081 0. 618 0. 551 0. 655 0.629 0.370 2. Percent change: Production worker employment 1.0 -.218 . 691 . 751 . 505 .340 -. 120 3. Percent change: Output per pro- duction worker man-hour 1.0 . 452 -. 201 -. 032 . 178 . 223 4. Percent change: Output 1.0 . 587 . 469 . 449 . 161 5. Percent change: Wholesale price index 1.0 . 448 .395 . 196 6. Average return on equity before taxes 1.0 . 868 . 413 7. Average return on equity after taxes 1.0 .495 8. Concentration ratios - . ._--- - 1.0 1955-56 1. Percent change: Gross hourly earnings 2. Percent change: Production worker employment 3. Percent change: Output per pro- duction worker man-hour 4. Percent change: Output 5. Percent change: Wholesale price index 6. Average return on equity before taxes 7. Average return on equity after taxes 8. Concentration ratios 1. Percent change: Gross hourly earnings 2. Percent change: Production worker employment 3. Percent change: Output per pro- duction worker man-hour 4. Percent change: Output 5. Percent change: Wholesale price index 6. Average return on equity before taxes 7. Average return on equity after taxes 8. Concentration ratios 1.0 PAGENO="0062" APPENDIX C TRENDS IN INDIVIDUAL INDUSTRIES RELATIVE TO ALL MANUFACTURING In order to compare the movements of prices, wages, labor costs, and returns to capital in each 2-digit manufacturing industry, indexes were computed show- ing the ratio between the index of these variables in each industry and the index of the same variables in all manufacturing. The resulting indexes are presented in tables C-i to C-20. A brief description of each of them follows. Wholesale Price Index: Industry 1. Wholesale Price Index =_____________________________________ Wholesale Price Index: Manufacturing The basic wholesale price indexes are given in appendix A. Index of Straight Time Hourly Earnings: Industry 2. Straight Time Hourly Earnings= Index of Straight Time Hourly Earnings: Manufacturing Index of Output: Industry 3. Output= Index of Output; Manufacturing The basic indexes of output are given in appendix A. Index of Output per Total Worker Man-Hour: Industry 4. Output Per Total WTorker Man-Hour=--- Index of Output per Total Wrorker Man-Hour: Manufacturing The basic indexes of output per total worker man-hour are given in appendix A. 5. Direct Labor Costs Per Unit of Output Per Total Worker Man-Hour - Index of Direct Labor Costs/Unit of Output/TWMH: Industry lndex of Direct Labor Costs/Unit of Output/TWMH: Manufacturing Direct labor costs were measured by the index of gross hourly earnings of production workers; no data are available for hourly costs of both production and nonproduction workers. As a result, the iitdex of direct labor costs probably under- states the rate of increase in total labor costs, since nonproduction workers have in- creased considerably faster than production workers and since the average hourly compensation rate for nonproduction workers is probably higher than the average gross hourly earnings of production workers. Index of Profits Plus Depreciation Plus Depletion Per Dollar of Sales: Industry 6. Capital Costs Per Dollar of Sales=- Index of Profits Plus Depreciation Plus Depletion Per Dollar of Sales: Manu- facturing The basic indexes of profits plus depreciation plus depletion per dollar of sales are given in appendix A. It should be noted that the same limitations discussed in appendix A with regird to comparability of scope and classificationméthod are applicable in equal degree to the data presented here. It should also be noted that one important part of costs-viz, costs of materials per unit-are not available. In a few in- stances, indirect taxes may also represent a fairly important part of the final price not accounted for by the costs included above. Tables C-i to C-20 follow. 54 PAGENO="0063" C) (0 C) I, ~)-. ~ ~C)C))1~. ~. C~-.- ~ ~. I ~ ~ tC C) 0000 C) t0 00 C) C) 00 C)~4~-0~-~ ~~C00©03 cC00t.~ Vd ~o ~CD C) ~ )+ 2)~ C) C)-' -` C) ~ 00 C) "1 ~4 E~0 ~O)1C ~Ta - ~C'~'C) C)C))o~0000~-'cO C) ~` C) C) C) C) -~ bO C) C) C) 0 C ~ C C) I I. 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C) C) C) C) ~- C) C) C) C) C) C) C) 0 ~ C) ~ C)C)C)C)C)C)C)C)C)C) ~ C)-- ~q C) C)C)C)C)C)C)C)C)C)C)C)C) I~1:C.I:C.1p~CP C) C) C) C) C) C) -~ C) C) C) C) C) ~C) ~ C)0C) ~ C)C)-4C)C)~~~C)C) ~ ~d ~ ~H?~ ~ C)C)C)C)C)C)C)C) ?CC) C) C) C) C) C) C) C) C) C) -1 C) C) C~~C) ~ -1 C) C) C) C) C) C) C) C) C) C) C) 0 0 ~ tCj C) ~CI) C; ~ C) ~ CI) C.) CC) C) C) C.) C) C) C) C) C)- C) C.) C) C) C) I. C)C)C)C)~C)C)C)C)C)C) ~ )C)~)C)C)C))çC.C)C)C)C)C) ~C) ~ ~ C) C) C) C) C) C) C) C) C) C) C) ~ ~ C) C) C) )C) C) C) ~ ~ -~ ~ ~ ~d OC~0 ~C) C) 0 C 2. ~ C)C) C) C) C) C) C) C) C) C)C) ?OC)?-' C)C)C)C)C)C))C)C))C)C)C)C) 0°_b ~ 0 -~ ~1 C)C)C)C)C)-4C)C)C)C)C)C) 0 0 ~ C)C)C)C)C)C)~C)C)C)C)-.)-4 -I C) ~- -1 C) C) C) C) C) ~ C) C) C) 2.C) ~ C C_b 0 0 C) C) C) C) C) C) C) C) C) C) C) C) C) (C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) C) ~ C) C) C) C) C) C) C) 2_C) ~1 0 PAGENO="0069" 0 p ~1 p p C. z C p p p C. H C CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD ~1 CD CD 33333~3333~3 ~. 0.-~ D Boys' slacks----------- -- Dcc 52 100.0 Boys' jackets----- -------. Dec 52 100.0 Girls' sweaters, orlon-- --- Dcc 52 100.0 Other manmade fibers apparel: Yard goods, rayon--------------- 77.3 77.5 78.6 79.0 01.8 81.8 78.2 75.2 71.6 71.1. 70.5 70.5 4 Miscellaneous apparel------ ---- Dcc 52 100.0 Women's coats, fur-------------- (hi) (3d) 93.5 91.9 (3~/) (hi) 101.8 90.8 (hi) (hi) 95.1 93.6 Women's girdles---------------_-. 105.0 107.2 109.8 116.5 123.6 1271.3 126.1 126.7 126.7 1271.9 127.8 128.0 - ----------- 100.8 101.2 105.2 110.3 116.14 117.14 118.9 117.2 115.5 1114.2 112.6 113.2 Men's: H Shoes, street-------------~.-. 102.5 102.6 107.2 112.5 119.0 120.14 123.0 122.0 119.2 118.2 116.8 117.3 Shoes, work----------------- 90.7 98.1 103.0 100.14 115.7 117.2 119.8 119.8 117.8 113.9 112.8 112.0 Women's: Shoes, street-------------_.- 99.5 100.2 103.7 100.5 1114.0 1111.6 115.8 112.5 110.6 109.3 3.08.1 109.3 Shoes, play--------______...___.. Deo 52 100.0 Shoes, oxford------------------- 100.9 101.14 105.1 110.3 116.0 117.9 118,3 118.3 1i8.o 117.14 1114.8 llb.6 PAGENO="0095" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 87 Co 0\ 0~f\)f\ 0 tC\ 0~L0~ 0\~ C~ H r~ 0 CC\ U\ H 0 N- (fl Co 0\ Co H 0 0\-0'u\ (~ 0~ r~\ CoH OO)N-'0'0~!\OCo c~ C~-ZflA~Zt O~N~HN- H H0H0-~-0'CoH H HHHHHNJHHHHHH H-0--~-4(~ H HH~ HHHHHHr-IHH H HHHHHHHHHHHH HHH~H Co N-C'JN- I 1~ -toN-H co ~0H0~N-CoN- C~N-tf\ * ..*, * CO r-Hi~r\ I 0~H -ZTCOCoCo Co NJ~NJCOC'J (OCOCO 0HN-O~'O H NJc'JC'JINJH0H0~~-zt-~H H HHHHHC'JHHHHHH H-~-~COCO H HHHIHHHHHHHHH H HHHHHHHHHHHH HHHHH Co co ~ 0 I Co `0 `0 0~ 0~~'0 0 H H Co ~(\`0 0\ 0 `0 N- C- NJ CO Co ~O C- N- 00 Co 0 * . ..I * CO ~0 0~ tO $ 0 H N- `0 tO H CO Co Co N- H NJ NJ NJ 0 C'J 0 H 0 NJ NJ CO 00 `0 Co -0 H NJHNJICOH0H0C'J~0-0H H HHHHHNJHHHHHH H-0~ZtCOCO H HHH$HHHHHHHHH H HHHHHHHHHHHH HHC-IHH Co ~ztCo 0 1 H0~C'~'0 Hco H N- 0N-0~ `OCoCO-O CON- -OCOH C-tO * * **$ . 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C) C, 0. 0 CD 0 0 CD C) -CD 0 C) 43 C) H -C) 0 C) C) C) ~0 C) H C) CD CD C. C) C) 43 C, C, C) 43 C) 43 Cl) *0 C) 43 "4 C) 0 C) 0 C) H C) C. 0. C. C) C) C) 0 C.) .0 C)~ H 0 0.00 H H to tO-C) H O\ H C- C- C-C' 04 00000 C'J H-C) 0' C--C) Co (`4(00 to 00000 H(0000'00OCoOC.J00000 H H H H H H H H H H H H H H 00 Co to H 00000 Co ~C) to -~ H 00000 0000.oj00000 H H H ~4H H H H H C'J 0'.Co .C)C) I 1 0~ H I 0. 0 1 H I H 0-0 C- CO H Co C- Co C)~ C'4 I $ I 10 *111 I (`40-0 Co Co `0 OJ(0 0 to I I I I 0 H (0 0 0 0. 0 0 COCo 0 (\J I I I I 0 H H H H H H H H H I I I I H (0C)~ Co (`4 (`4 (~4 (0 I I III C- (Ot(\ (000' 0 1 I 00 0 0' ((j 0. 0 I I H H H ~4 H I I I (0CoCo-C)C) I 0' C- (00' H I O\OHC\OI H H H I C--C)COC)~C'J C-C-H 0.~ H Co Co Co ~C)'0 C') -~ Hc')000'00~oCo H H H H H H H 0t\Hto0'CoC-C-~ H (0(0 C- Co - - HC'00C~C HHHH H 0 -~ 0 to 0'Co C-C' C' C- I 1 1 I CCJ 1111 H C') (OC- CD tO Co C') Co 0(0 I I I I -C) HC'4000'OOCoCoOC-4 I I I ICo HH__H_I__HHHH__HHH__HH_I_I_I_I to C'tr~ to CD) C)0 I I III Co C') -C) C~J C') CD 0 I I 1 0000\HO0 I I I HHH HHH I I I 0\C-C)0.C) I H C-COO H I 0\OHOOI HHHH I (0-C) Co -~ C') $ I 0 C- C~J C' H I 0'OHC'0 I to to H -00 I I to C- (00' H I CDOH0'O 1 H H I 0 too C- (0 C'Co to C-C' 0 I I I I C') 1111 0 CC (`4-C) Co to Co (`40' 004 I I I I -C) HHOOC'OOOCDOC\s I I I Co HHHH HHH HH I I I I Co C- (OC') Co ~004 I I I to 04-0040' ~) 0 I I I 000C'000 I HHH HHHI Ii C'J-0~0 I ~ CDC'4c0COt0C'. - CoC 0. PAGENO="0097" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 89 0~f\C'J\O 000 tt\-~ t-~ 00 HHOHOO r-1 H H H H H H I I tt\~~\Ou\ I I I HHOH I HHHH $ I ~-~c\o ~n-zt'O~r~I I I HHOH I HHHH I I ~c~1ci -ztC'J'O-~ I I I HHOH I I $ HHHH I I I ODHOO c'jr~- I I I HH0~ I I I r-IHHH I I I I: o~or-co i I I 0000 $ I I HHHH I I I Hcll o~0~o0 I I I 0000 I $ $ HHHH I I c~;c~i ii aDt~-~aD I I 0000 I I I HHHH I $ I C\tAHC'J I t-C--U\cO I I I 0000 I I HHHH I I $ cZDHt~-O\ I I I *111 I I I. 0000 I I I HHHH I I I $ I I 0000 I I HHHH I I I C~9~t- I I I I I S 0000 I I I HHHH I cgc~l~ $s\ ~ 000 I'l' I I I 1111 I ~ `I ~ I~itH r PAGENO="0098" Table 12. Con~urner Price Index--United 3tate~ city average: Indexea of aelected Itena and groupa, quarterly, l9t~7-58 (Corit'd) ___________ -~ ~ ___ ____ 19 5 _________ M~ June~ 3~, ~ Mar, Juno ~t Dec~ M~ ~ç ~ Deo~ All j,~___ -..... 113.6 1114.5 115.2 1114.9 1114.8 115.1 llh.7 1114.3 1114.3 1114.14 llo.9 flh.7 All itona boa food----------------.-- 115.1 115.5 116.3 116.6 116.5 116.3 116.3 116.6 116.14 116.3 116.9 117,6 All itona loon ohaltor----------.-- 112.L& 113.3 113.9 113.14 113.1 113.Lj 112.7 112.2 112.2 112.3 112.7 112.14 110.7 111.5 111.7 111.0 110.6 110.3 109.7 109.]. 109.0 108.9 109.2 108.7 1iO.~ 111.6 112.1 111.5 111.2 112.0 13.1.3 110.1 110.2 110.14 111.1 110.2 Nondurabboa loon food--------- 109.7 109.6 llO.7 111.]. 110.9 110.14 10.14 110.14 110.2 109.9 111.1 111.6 Nondurablon loan food and apparol- 1114.6 1114.5 115.9 116.6 136.8 116.1 116.2 116.0 116.14 i16.o 117.1 117.9 Durabloa------ - ----- 113.14 112.8 112.3 110.9 110.1 108.7 106.2 107.0 106.2 1014.7 103.? 105.1 Durablon ].ona cara---------- 107.3 107.1 106.13 106.14 105.9 103.7 102.9 102.5 1Q1.8 . 101.0 101.1 100.3 Coodition loan food----------- 110.0 109,8 110.2 110.0 109.14 108.6 137.7 108.1 107.6 137.0 107.3 108.1 - 122.7 123.8 125.14 126.2 126.3 127.3 128.1 128.5 129.0 129.6 130.14 130.9 Sor~io~a loon ront--------------- 123.3 121i.3 125.6 126.3 126.9 127.5 125.14 128.7 129.2 129.9 130.3 131.3 2 Houcohold oporátlon cor7loon, gao, and oloatrioity-------------. 116.1 117.2 117.8 118.3 118.6 117.7 117.9 118.14 119.1 120.9 121.3 122.3 Hcuroho]ñ utilitlon jJ-------.. 111.0 111.8 112.7 113.5 113.8 112.2 112.14 113.1 1114.2 115.3 115.8 115.9 Cl Tranaportation. cozi7iooa- ----------- 1145.0 1115.8 150.3 150.5 1514.0 153.8 153.9 1514.14 1514.8 153.7 153.3 153.6 Madloal cnro cor~icoa---------- 122.3 123.7 1214.5 126.0 126.14 127.3 128.2 129.3 130.6 130.8 131.6 133.14 Other nor~iooa------------------ 112.14 113.2 1114.1 1114.7 1114.7 116.1 117.14 117.3 117.14 118.]. 119.3 119.3 111.7 113.7 113.8 112.3 112.1 113.8 112.14 110.14 110.8 111.3 111.6 109.5 Cl Food at hor,----------------- 111.3 113.7 113.5 111.7 111.14 113.3 111.6 109.2 109.7 110.3 110.!t 107.9 Coroaba and boltory producta---- 117.7 118.9 120.3 120.9 121.2 121.3 122.6 123.3 123.9 1214.0 1214.0 123.9 Ibata, poultry, and finh----------- 107.14 111.3 113.5 107.8 109.5 111.1 106.7 102.2 132.3 103.8 103.5 914.6 D.~iiry pXOdUCtl3------------- 110.3 107.5 109.6 110.3 108.0 102.9 105.8 106.8 105.14 1014.1 106.5 137.7 Fruito and ~nogotabboa------.. 115.5 121.7 106.6 109.2 107.8 117.1 110.5 108.14 112.0 119.5 110.2 110.7 H Othor fonda at hc~--------- 109.1 110.9 116.7 113.5 112.3 115.2 116.0 112.0 111.9 107.7 1114.1 113.7 Food a~n.y fron hono-------------- Jan 53 100.1 100.2 101.0 101.7 101.9 102.3 102.7 102.8 102.9 102.9 103.6 1014.3 Honaing ~f--------------.-------___ 116.8 117.14 118.14 118.9 119.0 118.9 119.5 119.7 119.6 119.7 120.14 120.8 121.7 123.3 126.0 127.6 128.0 128.3 128.8 129.14 130.0 130.1~ 130.5 131.1 Hc~., cninton~nco and rop~irn--------- Doe 52 100.6 101.6 103.0 103.2 103.6 103.6 103.8 103.7 lOu .14 105.8 107.1 107.7 ruxtorior houc, p~1nt---------------r Coo 52 100,3 99.9 99.6 102.6 103.5 102.7 102.7 103.1 103.0 103.5 . 103.8 1014.3 PAGENO="0099" PRICES AND WAGES IN MAN1IIFACTURING INDUSTRIES 91 c~c~ -~ o~-~t0~ 1a~r ~ -~ csJ U~\O C r- `0 ØD'0 %0 0 O~ 0 c\J 0 `LA ~ 0 ~ -~ ~ HH~H~4 ~I~P~"°' ~ C 0% rI C'- `LA ~) c~ o~ cV's c~j -~ c',~ c~j c'~ ~j a i u c o~ -.~o c~j H ~ 0~ ~ -~ 0 ~ 0 C~ 0%tr\ C- 0% 04 OO~Or-l rIC\S-~-~ ~ -~ ~ HH~HHH ~ ~ 0000HHOH O'~H ~ o-~o~ ,C11 ~00-0r' ~00~2~ ~ OCO0HH0~ 04 ~HH rlHrIH r-IHH H H ri H ("s H'00 -~ `LA H ~0) H a) `LA )J'~ 0% 0 r- ~) 0 0'~a) `0 0%-~'0 C'- C'- H &. 0~ `0 -~ C'- 040 HHrIHHHHH r-I~H ~i H ~o m r'\ t- r~ ~\ C-'~0 0 0% 0 0\ -~ o-~ r~ -~ o~ ~ r- a' ..t o~-~ 0 a' H u-~ o~o ~ -~ r'L~ H 0 J0O 0~00H-10H 0'-0H004C'JH HHHHHH H H~C~ C' C 01 C `0)4 0%~0 0%V\ 0% H ~) ci `0 ~ -~ CO -~ O~ H a) C- H 0~ `LA -~ 0% 0~ 0 0% 0% ~ H~»=~O)A 00~ 0H0HH0%H04000%rf~0'-O'O' ~O'~ i±ddHHHH~l r~HHHHr-1ri HHHrIHr4-r4 H H 0~ ci C- `0 ~t ~ 0 `0 ---"00) `LAO) `0 C'J `LA'O -~ H C- -~ ~-~C~J C~J H C~ H -~U) a) t H ~ r-I H0~C\O~ ~ omru-~ 00000000 ~0H4c'J HHHHHHHH HHHHHH~ H~ H H H 0;9tA%~~:Ii9 -%Oa) O'0'0cHH04a)O%019 ~ OHHC'JN-O)CW 000tA0%~AthC-H'0 H~0~H 00000000 `-~0H0c'JciciHa)ciHCi HHHHHHHH HHHHHHHH HHH H~IH~r1 ~ 00-1 C) 0- H -z) 0% 0) O\0) H'0 t-'0 C) `LA 0'-'O'0 -~ H H C- ~ 0)04 0%'0 0% 00) `LA ~ t~-~ e~C'~0 0 `- 000404ci H 0304 HHHHHHHH H HHHHHHH H H0% 0%1~H0% ~ -~\HtAH'LA'LA~\ -~0-~a)Ha)0~ci~ ~ O(C H H Q H `LA)J\ H 04 oo~ooooo 0%C~'0O~0%H~a) 040-0)0- 0% ~H0%0 HHHHHHHH HHHHHHH~1a'~1I~ H nH H ~ZtHa)Hr~O% 0H~HH~000%O1~%r~ ~°~2 8888 ~-°°-~~8'~88 04aDO~C- HHHHHHHH HHHHHH~I0)~~HH H IHH HH ~Ir-4 0404040404040404 0404 00000000 00 0 0 00 0 - -. a a. - - aa a 0 I ~ H I ~ ~ $ 0 Ok 0~t).-. ~ ~`~`a ~.ic; I t~0 0~404~ 0 ~? J~ ~ ~-I~8~.I ~ ~~H'~I ~ U 0 0 Ho H0~C'.~ *!j,~~~00U*~ 0 *`+` ~ h~i ~ a°caa~ ,~iC~C~i I. hO 00 O'~H+' 0) 0) PAGENO="0100" 92 PRICES AND WAGES IN MANUFACTURING INDUSTRIES * 1~ 13~ I ( r~-.l C- o'.-o `0~00'C'4 000010 `-~ .-~ -1 -i -~ ~- ~ -o C-- ~ ~ `0C- 0 ~ 0 0'.H-tAOC-C'3 -OtA -0--f 0 OHOOCDOCD CJ000C'J H H -f H H -f -f H -1 H -1 o ~ H 0 ~~-f 000'.Ho'. ,-4 ,-~ ,-f c~ V~ H -f `-0 -~ cljI.0~)f ~-4-4'--O H ,-4 H ` * ("i C'~ U~ C- Ir~ C- -0 `.0 H -0 C'3 0'. 0'. H 0 1f~ UI 0 -~ (3 `.0 C'4 H -~ 0 C- 0 ~ 0) (` (`3 CD (130) %1) Q -O `.0 H `.0 tO -~ 0'. H H m to C- C- 0 ~ »=}O -01.0 ~ 0000._c OHCDr-f000DO0) C-J0010c-j OO-.~o._ -~ HHr-4 H HH HHH H HH HH HH H HHH `.0cc- C-tAO-C' QQQC('.~ HHH H OHC--OrO 0~ f~HOC-C'J'.0 O~0)HOH0)O0). HH HHH H 0~c'j 4l.0~'C'4CD c%3O&'OH HH -IH 0-Or---.0 -`0~Q 0001H01 HH H - »=` HHOV ~ HHHH C-C00)UIOD 0(C-r-4~ H H H H H ~t--0C- 0N-C\JO'OHtA OHO\HOH0)00'. H H H H H H OHODC'4 C~O'.Hto C'300\OH H H H H ~tAQ0._H -0'0C'.-OH 0O01-~01 H H H 0 ~ H V\C-~'.0 c'j1.rv~0 H H H 1~ c~'.o (`4-Ott -0'0 bu'.ro O-'.otoo ~o CtAC'I' C~ CD C- H H C- 0OHOC HH,-4HH 0-H HCD (`4(40)1-0 OHO'.HOH0)00._ HH HHH H (`4 -00 `\ 0'. (`300-00 HH HH .-0-~ 0.0 0 OöCC~HC~ HH H C `0 H H o~--.-o c~u'.~p~~ H-H----O HH H -0 m m~0 CD C- O~ H CD 00000 H H H H H tr.tAO'.C-j H 0-CDtr\m 0) H (`30'. mc'. CD -4 0 H 0 H 00 CD 0 HH HHH H m C'4-0~0 -~ (`3 -~ 0- (~\ 0'. (`400100 HH HH (`3 C) U\ (00 -~ C- 0, `.0 H 00 OH 0'. HH H --N-C-H ~»=p~ (0r'W-.o HHHO HHHH C C ,C Ct) -0 (`3 C- H C(10 COCCO H H H H H CD OH C- (`4 `0 H (~1 -0 I\O--0(0(0CDO OHO'.HOHO'.OO H H H H H H H HO) (`400 (14(0O\(0H C'400._OH H H H H (0CV C H C- ~0C-0~0O 000-HO- H H H ~- ~J C) `~ m H `0 `0 C- 0._CD CD (`.30 0000H H H H H H `.0 H H 0 m `0 H to 0~H'0 O-tAm~oO) H OH 0'. H 0 H 0._CO HH HHH HH 0-0'3 to H H (001 m H c~ 0010 H HH HH (0-0 J~ H 0- U'. C- C)-.0 0 000 C'. H H H H H to ~ C-C--O-0cl3 H-.OcxJ-0O-OHOC-- CD0'-0~.OtA - i~ ~ O'.CDCD-C'H 0000H ~-4HHHH 0'.H-O--0OC'J-.0C-H OHO._HOHO._OG ,-4H HHH HH 0)H0-mH HO0\OH HH HH U-\C---0L-'.c'4 OC0HO'. HH,-iH. Cl 0 ,~ 0 .0 ~ H ("0010 0 ~ CD -0(13 HOOCH H H H H - H C- 0 tOO CD 0 H CD 0.c'.ir-tA'0c'i'0C- H HO'. H 0 H 010 0 H-0-0 H CD (`JO' m 0 H OO._O~ ~0(13(13 m -Or-- O'.lf, (14 0001 H :~ C-C' U'. -... -or'. m H `-H HO HHH ill ` III 11 1 1 I I C I I at ~ ii lIt ~-4 ~ I a I I at I ~ I i 0~ ~ 4, I I Cl C ,4~ C I lj Ii a I ~II a * ~ I H C C f-a-a ~ I ~4).f 1 ~.,i C 1 0 C 00 C I a- v0 I Oo~ ~ l-f~Cl f-a CO t~ a H a U Pa C ~ 1a- CO ~ ~ 0+-I ~ IC-f H C)-,CC ~ C fi~4Øf 6E -4 ~-`~ `-4 ~ 4) a- - CCII 01,1 fl(~+)U ~ O4~ Ca-~'0IJ8 ~ 4)1, ~ ~ ~ O-4 Q+'-f ~)~I 1,0+) ~ L*f*?l ~ ~ ~4 H ~ 0 H ~ ft (~C~fO<3~1~4 HCCl~1, `~ 4)0 0 Cl Cl z 0) C-C-HC'.(0 -zC'.00\mO-00c'Jm C-HOOCA C-HHCUH 1.0 0)-~J-'tf\ `.0-0010(14 C._C14 U'. tOO. -00) H 0 -00 0 H 0 -0-0 010'. H -0 C~ 00000 OHCDHC\OC-OCD C~C-j0OC'~ 000._HO'. H H-~--0 H H H H H H H H H H H H H H H H H H H H H H 4) C 0 C) CD U' -0 0'. H a- C 0~ C C H -O C) 4) C) C) H C) c-f 0 C C 1< C C I-f C) 14 C H C) C C 4) (3 Cl) C, 4) -4 Cl C `C C C C) 14 0~ `C 3- 8 . `OHC-0'.C- to0toHCDmOc~tA 0to0t0C- r-(0-Clf-) O-~r-m0 HC--.Oto01aDtoO CDH01mO- ..OC-O-('J ~ ~ 0C0O~ HHO--iOOO-00 HOO-00' 000-HO- - HHHHH HH HHH HH HH HHH H HH H . VI C~C'4 \IA (`3 VI ~ PAGENO="0101" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 93 C~4 H~'~V~ ~o~::0 t~; .~v.c 0.f ~ ~ ~ & C'j ,-4'~0O C'JHO H H HH ,-4HH - HH .o-~Oo e.~r-v. ~ ~ __.c%~i 0 c.i 2~1t8 -~ ,-i 0 H ~D `0 0 `0 0\ tA OJ `0 OJ H C\J C\J'- 0 C.J H 0 0. 0. I O~ O~ C?. 0000~ o~ 0~ $ H H e-IH HH,-$ I H-4H H a~ .oc'J ~- c~j H ~ H U~ C'J C~ $ ~` »=~t »=~i~ ~ ~ `~`~J HHH r~ I ~--iA 0 (\j C~ ~) I t-~?-~ t-0 ~ H 0 $ HH~4 H ~0~HH tJ\0.O' tf~ A00O'O'0O~ ~. c.j _:9~ tr. 0.0 H 0. C- I H C- 0 ~ 0.0 tr. C\J C'J-00 c'~00 0~ 0.I00OHC~~O~ H H HH HHH I HHHH aic-O 0 ~HC~~0 AC0,('~0,CJ ~ c.j (.-. tr. o~ 00 g~.0 H -0 tA H ~.i.zC tA.0 tr. c-a H H ~ ~ ~ ~ 1~~,L-~0' °` cOc!aH('W\r2 u~ta~ ,-IHH H C?. 0.0 H U-. .0 C'J HG. C-- ~ ~t c.~ f .0 a ~ r- c't V. 00 ~ ~> C~- a't c'-a 0. i-I C.J ~) -- 0'0 »=~) tO ---- ~ C.J a) O-.'0 a `-. c'~ H V. ~ -~ r-I ~ C't 0\ C\J C't H H tA .0 .j `00 V.0.0-0 tA t- ~ 1 0 C-- 4~t H C ~ I ~ H .-a CU H 0 .0 I au-. 0~ tA c.j H r-U\ H tA H H ~:1 ~H ~°` `~L°'~°' 0.0' O.cg 0000.00 0. HHH H H0tA-0~0~ C.JH ~ N0'~ o.~~'t c.j0 tA-Ol c0('-tC--0.~t'0 C--Hi 00.1 QQQ0\0G% 00. H I Ha-IH H »=`~fl ~ I HHH 0~ -~ 0. r- **-%-** ~ C-\ .0~N- 0 CU CU 00 ?-4H HH H CU 000 oa H 0 HHH o tA I -~ .~ t-U-.tJ\ C---0-0 0. C- I CU C-- Q-4 00.0.0 0. 0. I 0' CY. 00 OH 0.0. I HHHH 0 I ..___.I .0~A 0' I I a'a 0. (`ttt.tO 0. r- c.t r- 0-. c'j a) 0000.00. HHH H 0 C%J .. ~ c-J 0.0. a) H 00. ~\ lCD 0.00 H'0 .0.0 H CU CU C ~C ~ ~- ~- C-- H ~- 0 C~t'00.0-0 ~ tA I .0.0 tA~) CU 0 ~0 CU 0\I0.0.000H00' 00.1 0000.00 0.0-. I HHHH - H I -IHH HH `0 0 CU .o O.tA 0 H tA tAO. .0 H 0)0 (`ttf\ c-.a.0 0 CU .0 C?. 0.0.000H00 00.' I HHHH `a C 43 F PAGENO="0102" 94 PRICES AND WAGES IN MANUFACTURING INDUSTRIES 0 0 (` a) -`0 0~ C- I 0~ N- I `- o~ ~ o~ $ i U~ 0 ~ CM H'0 O~ 0 C~ a) a) N- -~ Q 0 -~ e~ N- o~a) N- (~~) 0 0\ ~-4H `00 CM V~ a) 0 0~ a) 0-~ H 0 CM ~) 0~ c'~ 0 ~0 0' C- ~ H -~ 0 H H CM CM m'0 CM H HH C- -~ ~r\ U\ H 0 HH 0 H -~oo~ oco - HO~ \C~ ho C-U CM C r'~ ~`}~.0 0. r- I CM 0.33 C- ...~ 0. .-4 CM C- 0 H 0-~ (A-4 0' C-- H C~' (44 -~ 0 a a) ~- 0' a) 0 I 0~ N- 0'a) C-- 0' 0 0' 0 0\ 0' `00 C- CM H CM H H 0 CM h~ I ,-4 ,-4 -4- r4 r-4 r4 H H a (`% H~0~t(\~ ~ 0'~ 0a) c'~ I ~ ~ ~ * ~i 0co~-~~A~ V\~90 0-.-~ 0' OH -~U~ CM - ~ ~ * C'- ~-a) 1,t~ ~-4 I 0' CM a) N- CM 0' r~ 0' CM o ~ a) ..~O H 0 0 H CM H f~ * -~ H 0' 0 H a) `0 `0 0'-0 e\ N- N- 0 0-~ H 0' `0 0 -~ CM 0 ~ a) `-`0' 0' 0' 1 0 a) O\a) C-- C\ 0' 0' O~a) 0. `00' C-CM H CM H H 0 I H H Hr-4 HH 04 ~-~$ ~f\HOH -OHa). 0'tr\HH a) a)0%. ~hC-- 0 ~ tf\ 00' H H 0' -0-0 (`\`O -~ tAO 0' O~ ~ 0' tA 0 (~ CM 0' a) O a) `- 0\ 0' 0 I 0' 33 0\ a) N- 0 0~ 0\ 0' 0\ 0' `0 0\ C'- C4 H H H H 0 ~ C!)4 I H H H H H H C- CM 0 tr~ ~-N- )J~ N-~ H O\-~ 0 N- a) hf\ `0 C `0 0-N- 0 c~ `0 3 tA H I 0' 0 0 0 N-~XD H 0.0~X) tA 0~ r~a H H C- `~ a) 0 0' 0' 1 a) a) 0 a) N---' 0 0' 0'- `0 0'- (`J H H H H 0 H H I H H H H H H H H C-- 0 H N- I ~-i O-~-0 H 00' CM a) ~0 CM 0-<'--3 0 0' 0 ~ H 0~ a tJ\ 0' 0»=)0' I 0 -4 0-0 a) -~ a) CM CC'%~~J 0' ~- 0' ~ 0 H `0 0) 0' O~-. 0- I 0' a) 0 a) N- 00' O\ O\- `0 O'-~CM H H H H 0 - I H H H H H H H H * ~ ~ ` 0 a /) - r ~ -- N- ---tA a) I hfl CM C- CM HO' 0\ -~ -3 N-3 N- `0 0~ 0' N- 0 H tr (~ H `0 -30) H CM H N- 0-0 N- CM 0~ -0 0 0c0 tA N- -~ 0~,3 0 H `0 0) `- O\ 0 0' I 0\ 0)00) a) 00' 0' 0' 0' 0 - -0 0\a) CM H H H H 0 I H H H H H H H H H N- -~-0 U\ (\ I a) tAO H ~`~-0 a) 0 0) N- `0 0' ~ N- 0' 0' tt 0' (DO H `0 ~ tf\ 0' I 0 CM H N- 0 `0 N- ~ 0~ tA 0 0' 0' C'~ C-- (` a) (~h 0 a) -0 a) - 0 0~ 0- I 00) 0 a) 0) 0 0~ 0' 0' 0' 0 -0 0-a) CM H H H H 0~ H I H H H H H H H H N- 00 ~- 0' f C- N-'0 H'0 ~-U\ 0 tA --~ H N- ~-3 N- C!) tt\ CM U ~) ~ `2 I 4) 0 a) Ic' N- H I. I- a a 0. a 43 a 43 C) a H a a `4 0 a a 0 4-4 a a I. a a 0 a a .3 a 4) C!) `0 a 4) -`-4 0 a `0 0 I) C) `-4 C) CI 4. 0' N- a) of C a' `-4 ---`0 ---N- »=1o ~ 0- 0~ I H $ tA C!) H tA1f4 ~h CM CM 0 ----- 0' c'- 0-00 ~h `0 N- 0 C!) a) 0 a) a) 00' 0' 0---- H H H tA ~ -0 H tr~ H 0 -~ C 0 `~ N- ~ 0~ a) `00 `-CM H H H 0 O~ H H H H H H 0 tA 00 ~\ ~\ ~ WI 000 000 0 _4~'~ a~ WI 0 CM ~ I r2 ~ 00...0C43'~~I00H 0 - - $oaa00000HOa)fl0~~P.kt4kH00 Iv- ~,-4aP.QnC)H43--l00'1HHQQHoaH00 0 6 ~ ~. ~j. -a PAGENO="0103" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 95 C V~ ~U 0~~t0%~~ 0~~u 0%tr~ ~ ~0c'~.jH 0~ ~ 0%C'~C%~ U~ N-Q~-O%t~- 0 OU~0 C'Jr4%O 0'O'O 0 ~ t OC~O%%O1S\ 04 00% 0 (~r4O% ~A V\tt\ 04 V\ N- ~ (`4 0 `0 ~ `0 ~ N- ~ ~ ~ rl 00- `00% H H V'~ 0'0'0 H 0% ~ tA (`40- i-I ~ `0 0% 00 H r'~tt\ %0 (`400 (~A O~ ,-4 N- (~%`0 ~ (`~ 0 H `0 `0 tA tA'0 0%V\ ~\ 04 (`4 ~ `0 oj tA'0 N- N- ~ (~ 0 0%'0 -~ 0% ,-1 0 v~ Q~%A'tA 0 C'- H 04 -~~0N-H (`4 (%CC'4C'J Q'ON-'0 H HrIH HHr-IrIrIHHHH H HrCr.CHr4r-IHHr4H HHHH (`4 ~\ (`4 f't N- H ~ `0 ~A-~ U\'0 ~ tA 0 N-~ ~\ 04040 `0 ~A'0 H H `0 -~ (`~`0 tA N- r'~0C'4 ~tAN- N- 0- 0%0%~C'JH0- 0%HOt-~A ~ -~ 0N-.0\O-O0%~~('~A - (~ U~0~-~ 40 -~ 004 `0C'JmN- `0 N-H ~A~4N-HHV\ ~0~'0~A~A ~ 04 .~-zt 04 ~ H ~ 00% (`\ N-tA C'- `0 `0 c'~ ~ (`4 ~ 04 tA H H `004 0 `0 H (`40 -~ %0 N- N- 0%.4 0% 04 r-tA'0 04 c'j N- tA `0 0% 0 `0 H V~ C- H 0 -.~ ~ 0-tA-a 04 ~ ~ ~ -~ 0' c'~ tA N- H 0 ~ u~ 00 tA'0 tA H 040 `0 H `0 H ~ ~ 0 ~ C'- tI\ Ct N--a 0 -4 ~ 0 N-Ct Ct H 04 ~ H H N- ttt `0 0% Ct 0 ~ H tAtA'0 00 (~ N-'Q -~ (~`s H ~ ~ ~ ~ ~ (~ OO~9 ~ tAH~0(~\04rcu1 VJ~'J~ -4 Ct0N-0%04HOJ'0tAO0%'4)C'J ~ ~CttAN-1ftV\tA00(~ ~tAC~c'JCt H 040404N-r~oJH04H~~r%%oc'j 04 HHHHH04HHH040404 ~4tt\'0ts\ H HHH HHHHH.-IHHH H HHr-4,-Ir-IHHHHHHH HHHH (~ CtQC04(~0U\04HN-N-N-Ct(C `0 tA z01N-00tHH..~U)tA (`j~0~4f~\tf~ -~ a~ 0 -~ 04 H c\atA'Q a~ tr~ H (`4 ~ U\ N- ~ Ct~ N- -:~ ~j\tA OCt ~ ~ 0400 ~A H (`40404 04,-40J0-~tA'00J (`4 HHH HC'JHHHC'JHC'J 0tA'OtA H HHH HHH,-IHHHHH H r-IH,-I,-4r4HHHrCHHr4 HHHH `0 N-CC)tAa)-~CtC'4 ~ `0 %0C'JtS\'0'OtArC 0~) CtN--4 ~) 0-~0-~ -~ 0 (`4'OQ ~ H H c~ 00' tA H ~ ~0~0 (`~ tA-~ ~ N- N- Ct U~ H ~ H (~ 04040% 0404 H (`JO -~ tA'0 (`4 ~ H H H H H 04 H H H ~ H H 0 tS\tA H HHH HHHHHHHHH. H HHr4r-CHHHHHHHH HHH ~H('~N-N-H~CtN-tA0H~ H 0~N-Ui~0~a~ui04N-V\H 0JaDCtN-~~ 0-C'J'O (`t~'0 N-C'J0 0tO~('~04 H ~ ~tr~r~ `0'0~ ft;~;~ (`4 C~ (`4 tO C'\ ON-Ct 0 N- Ui Ct 0% H tO 00-0 ~`0 ~ Ui 04 ~ 0'0 V'~0 -~ 00' -4 Ct oJ~0 N- 0 4~0 H ~QaD'0 H ~ Ct ~ to ~ r'~4 tA-4 0 tr~ c'~ ~ Ct H (`4 (`4 (`4 Ct ~ H 0040 -~ ~4 tO ~ H H H H H H (~4 H H H H H ~-i H -4tA H HHH Hr-CHHHHHHH H HHHHHHHr4HHHH HHH C,' to r~ ci I'" II -- - -- `~ 0 C ~ I ~ ~1 ~ ~ ~ ~ ~ ~ - ~-~l~1~(-4 ~<~~C-4 - ~ PAGENO="0104" 96 PRICES AND WAGES IN MANIJFACTTJRING INDUSTRIES C.A 0'. £4 -0 `~ £4 Cr'.C~'.c'~ 0' 00~c'jU".C'.'.Q 0'.0 0,-404 ON- -0r'-,C". ,c)"OQ,-4,-4 00N-U~-4c'-~ 00,400'. ,-4 -4 (4 0 C'J C `-4 -~ c'.~ 0'. 0 0 c~ o 0 C'J 0 0 0'. 0 r"~ C, 04 c, -4 04 o 0- 0-'. 0' £4 £4 .-` £4 £4 £4 £4 £4 C-4 £4 £4 `4 "1 ~4 £4 £4 ,`4 ~4 £4 ,-4 ,4 ,-4 ~ c'~C-O.0,-4 `00' ~ 0-OC.(-- -0Oc--"~C' C.. C!'. -4 N- 0 C'.J £4 `0 -0 £4 C 0'. r'~ .0 Ô N- `-` `.0 ro -.~) ~ ~-4 `.0 ~ C!'. a~ C' C!'. ~-1 c". C) 0 Cj ~4 £4 0 £40 .0 £4 0. 00 eq a.) 0 c'.J a) 0 0'. C (`-S 0 ci c~ 0 04 `0 C-. o 0'. ,-` ,-I ~4 -i -4 ,-4 ,-4 -4 -4 -4 -1 ,-4 ,-4 .-*4 £4 -1 ,-4 "4 ,-4 r-4 4 -4 "4 £4 H .00 C'.J a) Cr' 0 N- N- -.0.0 0'.. 0-0 0'. 00 H -0 0 a:' a) N- C'J .0 C ~ N- 0 N- N- -0 C". -4N-0'.C'.J~--4 .00-40\0\C"C-0O\N-H.0,--4U'.,--4-('-, ~L~C'C',.0,-40-.0'.C-- `~ H,-4~-40..,-4O HC',HH0'0OHCZD0c0'.00~,-l 00404,-4('4a)C".0a),-4 H H ,-4 H ,-4 £4 H H H H H* H H H H H H H H H H H H (`4 `.0CC'. 0 U'.N-e--00 0 -4 H 0-. 0 H `-0.0 Ha) N- -0 0-~..0 -C C-'.I ,-4 ~-, co C -0 0 U 0- 04 H "5.0 3 0 0'. C". N- C'., `.0 `-4 `0 -0 `.)C'4 0 C". .0 C C". N- C". N- C-~ H 0 -C H ,-,0 £40 ~` H HO'. C 0 eq a.) 0 C~ 0'. 00'. 00 0 eq c~ 0 (`.40 C'. 0'. 0'. H * C'-N-'.O\OU".0 C, OHN--O,-I0N- 0U'.H.ON-00 C'0'0CY-C'4-l `-`._zt000'C"N-C''0H'.0U'.QC'4 DC'-'. `0N-C.C4N-C".,-4(JC"-, C H H H H 0 ,-` C') H H 0'. 00 eq a.) 0 eq 0'. 0 0-.. 0 0 0 H - C eq a) 0'. 0". a-'. H ~~rLr~ .~ ~oLoirL ~d_ ~ £4 H H H H H £4 H N- ir'. (`.4~Ott) 0 tr'~0 C, U'. C') CU H -.0 tA C~ ~-i r'-s-0-.0 a.) N- U". (`\-3..o 0'. (`.4-0 ,-I0CD C) C'\0-0('.C'.JH C'C".0N-0'C'..N-.0-OH'0'0OCUQC'\ .,~0'Hr-0aO0'.c'.jr'-~ H H 0. H 0 ,- C". H H 0-0 C' C'.J a.) C- C-J 0-. 0 0-. U 0 U. H C'J C. eq a) 0-0 0-. H H H `-` H H H H H H H H H H H H .4 H H H H H H H ..0C')C'-0,-IN- N-N-tA0'.0.0O'.000-4-0C'-CtA-ON- ..0'00'0'0'..z7,-40-.U'.0' (`.4 0'.00--c-.0 04040) jt'-C,-'.O.OOC-j C"~ -0-O'.CHOC')U'.C'.jc'JC'J H -i 0'. H U) H C') 0 HO'. 00040) 0040.. 00'. 00 0 H .-i 0040'. 0'. 0'. 0'. H - .4 .-4 H H £4 H H H £4 H H ,-4 H H H H H H H H * C0004N-C'.J'.0 Hr-c-jC"sO'.0'0'.H OHt-r'\,-l'.OO'. 04-z~0.ON-H00'tA04 H 0'o,U04 -0 040tAN-.0'0-.OU'.,-4..0N-0.-4 00 . H 0 H 0'. H 0 H C') C H 0'. 0 0 C') ~ 0 C'J 0.0 0 0 ~ HrIH C'1H ri-4Hr4 ~d~~H.-4r-1H * N-N-HCUC\JO'. `.OCUC'.J~C.-ia)H0'0"C'JC'J-00U'. a)C'-Str'.C".O-ON-eq-OH C H ,-4 0 ci 0-. 0-. 0'. 0'. H r-4,-4'-IHH 0\00'.-00'.Cf'.-0000'. C, a)C'.-zCCUO C'5eq0U'.a)~)'.O~O,-4Htr'.0 00 ~0 CC--~C.H0 HC".OH0'00r''.a)0eq0'00O,-, H £4 £4 ,-4 H H Hr4 H H H H H H H H r4 H H a)f.U,N-OU\OU".'.0O'. 0,-',-~Ceqo'.o'O-.o-0 H H H H H H +) a. - * 0'. 04 r4 C'.., `.0 C') 0'.)!'. H U". £4 H 0'. 0 C') 0 04-000 OJ N-o\r-'.c,-40 CUHN-C'a)..O'0-OHHC!'.0'000',0' C 0 -4 - HO H C". C HO'. 00 C') a.) C ~0'. 000' 0 ~ `` `-` `~ `` ~`4 `4 `-` ~`4 `4 `4 `4 `-~ `-~ `4 `4 0) C- Cr. 0'. 0' 0'. 0 U) H -.0 * * N-C,-400-00'.0N- 0 H HC040'- 0'. 0.0'. `4 `4 `4 C'.. ~ H C) 04CJU'.C".CUH `0C!.'0'0r-40'N-_O_O0'eqtt'OHa)-.0 OHHU\00C"S00.0' .CCC')C.,-, . eq,-).004cC- ` CO C--HO - -4 £4 £4 £4 C.'. `4~-4 £4 * O..OC').z...) -OC-AN-U~0'. HO C'~ 0- H 0'. CU ~ -.00'. N- OQ,-,0'00- ---`.000- H H H_ H H H H H ~`~cj0U'.0QQ0'.C'C ~4C')C,.-4Q\OOC".a)Oc'4O.QO0'.Q `4 £4 - ~4 O'.'.ON--00'.C'.JC'-SOOOC" r'-'.-O (`4 C". QU'. 0.0 0 0 C) 00C'\czDOeq0'0000 H H H -4 £4 H H H H N-a)0'00QJ0'U'.a)U'. 000C~0'0'.0-.0'.0 ~4 `4 £4 ,-4 N-N-0,-4.-4'0000-0 N-'.0 00 H 0'. C--Co ("5 0QO0'.c'.~0.0'.OC-.C H H H H H H - (.4 (U 0404040404 0404040404 44 4< ~ 44) it) ~) M'. 44". 44) 44". 44". 44)4)44) ~CE ~ C, 00000 .00000 L~_~ ~ I I `. I ~ I I I I I 1' i --I I I I I- ii :1 ~Ct~ § ~ I I I *-4 o I I I 4 `4 0~ I 0~1 ~ ~ ~ . g I I I ~ ~ E ~ ..4~ 0 ``~ ~ ~ig ~ ~ ~ 1~4,0$cs*~ E~ `~E 840 0 0,-i ~ ~qdd+,-~ ~ ~~84O+' o 0.~40$4 ~ ~ ~ H~0'~;9 ~ ~ 0 44. a) -a C) 0 0 a) -icC N- 0". H I' C, a. C,- `0 44 -C) C)~1 ~ 0 H a - `C `4 0 C) a. 4< C) ~ C) a a C) 44 PAGENO="0105" Othor goodn and cor7icoo- - ~ 17.5 118.2 118.5 120.3 .20.1 .20.1 120.1 119.9 19.8 119.9 120.6 120.6 ~ prcductn--------------~ 18.8 119.6 119.8 120.8 .02.8 ~20.8 120.8 121.0 20.9 121.1 121.6 21.9 07.14 107.6 101.9 .08.0 .07.9 .08.1 108.3 108.3 .c8.8 1o8.8 109.8 109.8 20.5 121.3 121.6 .22.6 .22.6 .22.6 122.6 122.8 .22.7 122.8 123.3 123.7 Alcoholic bovoragoo-~---------- D~c 52 99.9 100.2 100.3 103.5 .03.2 .03.2 ~03.0 02.6 .02.5 .02.5 103.2 03.0 - --_--_----~-~--------. Dnc 52 99.9 100.3 100.14 105.14 .05.0 L014.9 1014.7 1014.1 .03.9 .03.7 1C3.8 014.0 - D~o 52 99.9 100.0 1CO.2 100.5 ~0C.5 L00.5 100.5 100.14 .00.14 .00.7 102.14 01.7 02 ______________ -- j/ Inoludon gao, oloctricity, tolophono, ~itor, and poatago. ~/ Inoludoc hcucn purch~co and ro~il oc,tctto taxan not r'bo~in coparatcly. 02 PAGENO="0106" Table 12. Consumer Price Index--United States city average: Indexes of selected items and groups, quarterly, 19)47-58 (Cont'd) Item and group banot' Mar. June, (19L7-L9100 unlonn epocified) All itomn------------ - All itome loan food-- All itomo lone eholter------------- J~22L J3~, M~ ~no 3~I2~ Nondurablon lone food----------- Nondurablon loan food and apparel- Durablon lone carn-------------- Goimaodition lone food-------------- * Sorvicon lone rent------------ Hounohold operation norvicon, gan, and oloctrioity--------------- Hounohold utilition jJ------- Tranaportation norrioen----- Medical care norvicen------------- Other norviooe------------------ 11)4.7 13.7,7 112.5 108.5 110.2 112.1 118.8 10)4.3 100.9 108.1 131.2 131.6 123.0 116.1 155.5 13)4.9 118.7 109.0 107.3 12)4.)4 92.8 106.9 11)4.8 110 * 7 120,7 131.6 108.6 107.6 116.2 118.1 11)4.1 110.3 112.6 112.3 119.0 103.8 100.)4 108.0 132.3 132.7 123.3 116.8 156.)4 136.6 120.0 113.2 112.1 126.2 98.0 107.7 131.)4 111.1 10)4.9 121.)4 132.5 110.1 108.3 117.1 119.)4 11)4.8 111.0 113.2 113.9 120.6 10)4.8 101.2 109.)4 133.6 13)4.1 12)4.5 117.)4 157.0 137.8 121.5 113.1 111.7 126.6 101.3 109,8 11)4.8 115.)4 1o6.o 122.5 133.)4 111.)~ 108.9 118.0 120.3 115.7 111.8 113.)4 11)4.7 121.6 108.0 3.01.9 111.1 13)4.)4 13)4.9 125.2 117.)4 157.9 138.7 122.2 112.9 111.2 127.)4 98.0 111.3 117.)4 11)4.2 107.0 123.5 13)4.2 112.8 112.1 118.9 122.0 116.5 112.)4 11)4.0 115.6 123.3 108.6 102.8 111.9 136.3 137.1 126.)4 118.1 161.3 1)40.6 12)4.6 113.2 111.tj 129.8 100.6 110.7 116.1 111.6 108.1 12)4.9 13)~.)4 113.7 113.)4 120.2 122.5 117.8 113.7 115.8 115.8 123.9 1o8.)4 102.5 111.9 137,5 138.)4 127.3 119.1 162.8 1)42.0 125.7 116.2 11)4.7 130.6 106.9 110.0 126.8 109.5 109.3 125.5 135.0 115.2 115.2 121.1 121.6 123.3 123.7 123.7 123.)4 118.7 12)4.5 119.2 125.0 121.0 125.2 121.)4 125.8 121.5 11)4.5 116.7 116.7 125.0 108.6 103.0 11)4.7 116.)4 117.3 125.8 110.3 103.2 116.)4 118.8 116.9 125.7 109.6 103.5 11.6.6 119.2 116.7 125.14 3.09.6 103.)4 116.)4 118.7 117.2 126.0. 110.3 103.1 112.6 113.6 113.1 112.9 113.5 138.8 139.8 1)tO.0 1)41.1 1)41.7 1)43.1 1)42.3 lt~3,8 1)43.0 1)4)4.)4 128.3 120.0 166.1 1)43.3 127.1 129.2 120.)4 167.7 1)45.0 128.2 130.5 122.)4 173.3 1)46.7 129.6 131.2 123.2 17)4.2 1)48.5 129.9 132.)4 125.1 175.14 151.2 129.)~ 117.0 115.5 131.2 110.3 113.1 11)4.8 115.0 110.5 1i6.i 11)4.3 131.8 106.0 11)4.6 113.9 11)4.9 111.0 120.8 119.6 132.7 11)4.14 11)4.1 130.7 113.3 111.8 121.6 120.)4 132.9 118.3 111.7 13)4.3 110.9 112.7 120.3 118.7 133.6 115.8 11)4.1 120.7 115.2 113.)4 126.3 135.7 116.2 117.0 127.0 3.3)4.7 1.16.1 117.2 127.5 137.1 116,7 117.5 127.8 137.7 116.9 127.9 138.2 117.1 Food at hotao--------------------- Coroaln and bakery producte--------- Moate, poultry, and fish-------- Dairy productn------------- Fruitn and vegetablon-------------- Othor fonda at homo--------- Food away from homo---------------- Houeing 2/---- - a ~T1 w 61 CD a H ci a ci CD H 61 61 ci) 123,7 126.5 121.5 116.3 117.8 117.0 125.14 112.9 103.2 11)4.)4 1)43.5 1)45.0 133.0 125.3 176.2 152.)4 129.8 118.7 116.8 13)j.0 113.0 11)4.3 120.1 110.7 113.6 128.2 130.7 117.14 117 1 Jan 53 Home maintenance and repaire-------- Dec 52 Exterior houno paint---- Dec 52 PAGENO="0107" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 99 PAGENO="0108" 100 PRICES AND WAGES IN MA~1TFACTTjRING INDUSTRIES C CO ! a) u-.5 0'. 0 CO H Co N- a) 0~% C'.) 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H ~) Co `CD H - C) C') (00(00 H H H H H H `0 C) H 0 a C 0 C C) Cc CC 0 ci C) $ PAGENO="0113" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 105 (~\ N- N-t(\ CD ~ CD N-H O~-D~O r-~ Ni ~\ 0 ~ 000 H H H H H H H H -~ N- H DA NI N- N-H C\~D N-~!\ Ni ~\ 0 (~D 000 HHHHHHH NJ C'i N- 0\ CD ~:t 0\ N-H N~r~O N-tf\ c~j r'~ 0 c~ 000 HHHHHHH ~ H N-CD 0W~ N- H C\ (fl N- N- Ni r~ 0 ~ 00 HHHHHHH CD CD N-~ 0 ~O r~\ ~O 0 C~ r~\ N- N- NJ ~ 0 (~\ 00 HHHHHHH N-~tiN-HH'O-Z~ 000\('DN-N-'O c~j~0c'~000 4) HHHHHHH p C) iCC -~ tt\ O\ N- `0 r-'0 c~jc~j0C'J 000 i±r~ H H H H H NJ N- ~\ CD 0 CD CD zt-~ 0~ `0 N- N-tN NJC\JOC'J 000 rIHHHHHH $4 C c~Jc~J0NJ 000 HHHHHHH N-'O 0~0-~0 Ni -~ 0\'O -~ Ni C'J Ni 0 NJ 0 00 HHHHHHH OD H 0~ H NO HHHHHHH Ni NJ OH Ni NJ CX) H c~\0tr\(~D-0H NJC'JHNJ000 £3 HHHHHHH CCZ 01 XLL~ `1' ~ ``I $ ii i'~ ii 1 ~li I I I CII 0 ~ II~II ~Ii~i~ as'~ ~ CX)) -pa I rIO *`C CO4$~ 00 $4 $4H I 00~~0$4 t~I0 t~3t~0 0-4 ~ .,-4 ~-4 0 0 $4.00C) UCXI 50505 O-60-----8 PAGENO="0114" 106 PRICES AND WAGES IN MANrFACTIJRING INDUSTRIES The GNP implicit price defiators for personal consumption are also presented. Annual deflators have been changed from a 1954 base to a 1947-49 base to facilitate comparison with the CPI. (See table 13.) TABLE 13 .-Implicit price deflators-Personai consumption expenditures [Index: 1947-49=100] 1947 1948 1949 1950 1951 1958 Total personal con- sumption expend- itures 97 102 101 103 110 122 Durable goods Automobile and parts.... Other Nondurable goods Food and beverages Clothing and shoes Gasoline and oil Other 97 94 98 101 101 101 102 105 101 103 105 103 110 111 111 112 116 109 109 114 106 109 112 lOS 109 114 107 111 117 107 115 123 110 115 125 110 97 103 100 100 109 110 109 116 98 103 99 100 110 112 110 117 97 103 99 98 107 105 105 108 92 103 105 105 108 110 114 126 96 103 102 103 109 110 112 121 Services 95 101 104 106 111 116 121 135 Housing 95 101 104 107 112 113 122 134 Household operation__. 98 100 102 101 107 111 114 120 Transportation 93 101 106 110 115 120 128 144 Other 95 102 103 105 111 116 121 140 N0TE.-1954 constant dollar deflators transformed to 1947-49 reference base. Source: "U.S. Income and Output," table VII-13. IV. WAGES AND INCOMES The service sector is, on the average, a low wage and income sector. In contrast to the increase in relative importance scored by the sector in terms of output, employment, and price increases, incomes have not, in general, kept up relative to the manufacturing sector. There are exceptions. Wage and salary workers in transportation industries, in some financial positions, and in radio and television had high annual incomes compared with other service workers. Table 14 presents the average annual earnings of wage or salary employees in the service sector in 1947 and 1958 plus the percentage increase attained between the 2 years. The data are for full-time equivalent employees. This allows valid comparison between industries with differing proportions of part-time workers. 1952 1953 1954 1955 1956 1957 112 113 114 115 117 120 110 110 105 117 112 124 126 115 131 124 109 111 109 109 105 107 118 122 113 115 126 129 127 129 115 116 133 137 127 131 114 113 108 127 119 133 132 118 139 137 PAGENO="0115" -~ C+ CD CDCCD D+ CD CD0 çjq CD~ -*CD CD~ U CD CD C2~D~ CDCD. CD0 CDCD 0c~ ~ CD* CD-. 0c0 CD Cl) CD o CD ~ ~CD ~CD ~ o CD ~ CD_ Ct ~?CCD CD ID ~ CD CD- CD CD CD CD CD CD CD CD CD CD CD CD CD CD CD H CD CD CD CD CD CD CD CD CO CD CD CD CD ~ -f--- ~& - CD CD ~- CD CD 01 CD DO CD CD CD CD CD CO CD CD CD CD CD CD CD CD CD CD CD CD 00- CD0- ~CD CD~ ~CD CD~ CDD~ CD~2~ Cl CD~ ~.CD -.0 CDC÷ 10 CD 00 ~ 00 ~ 0 Dl CD CD CD CD CD 0 CD CD CD CD CD 0 CD CD CD -CD CD H CD CD CD CD CD CD CD CD CD CDD CDCD Cl COCD CDCD 0CD -lCD ?C~ CD CD~ CD CD CD CD CO CD Cl CD CD CO CD CD Cl 0 02 0 02 CD CD CD CD CD PAGENO="0116" 108 PRICES AND WAGES IN MANDTACTURING INDUSTRIES some cases, improve their standing vis-a-vis manufacturing. Most of the other service industries experienced declines in relative annual incomes. This decline took place despite the increase in service employment. The unincorporated form of business organization is particularly important in the service sector. Not only are there many small service establishments in the drycleaning, laundry, barber and beauty shop industries, hut also many profes- sional services are provided by individuals or partnerships. The Department of Commerce gives an aggregate estimate of income for unin- corporated firms in service sector industries, but not more detail. Their estimate of the increase in incomes of active proprietors of unincorporated firms is 58.2 percent over the period 1947-53 and 5 percent 1953_58.8 The Internal Revenue Service occasionally supplements its regular "Statistics of Income" series by publishing partnership income data on an industry basis. Information is avail- able for 1947-48 and 1953-54, plus preliminary data for 1957-58. Tabulated below in table 16 is the ordinary income per partnership for each of the 3 years.° TABLE l6.-Service sector: Partnership income selected years, 1947-58 1947 1953 1958 Percenta 1947-53 ge change 1953-58 All industries Total agriculture, forestry, fisheries Total construction Total manufacturing Trade total Wholesale Retail - Total finance, real estate Total services $8,639 6, 092 9, 551 12, 722 8,688 16, 906 7.149 6, 354 10,285 $8,757 3, 380 11, 629 14, 801 8,518 15, 705 7,305 7,235 $9,823 5, 721 11, 809 13. 562 8,219 14, 654 6,906 6,262 1.4 -44. 6 21.7 16.3 -1.9 -7. 1 2.2 13.9 12.2 69.3 1. 5 -8.4 -3.5 -6. 7 -5.5 -13. 5 Hotels Total personal services: 5,675 14, 073 3, 141 16, 121 3, 028 36.8 -44. 7 14.5 -3. 6 Laundry Photo studio Barber and beauty Funeral Other Businessservices Autorepair Miscellaneous repair 5,695 4,021 3,304 10, 428 3,625 6.522 4,282 5, 174 7,807 5,620 4,832 9, 393 3,176 15,766 5,888 6,806 5,759 4, 693 14, 147 5,119 15,905 5,579 37.6 39.8 46. 2 -9.9 -12.4 141.7 37.5 -12.8 2.5 -2. 9 50. 6 64.6 .9 -5.3 Total amusement 7, 991 6, 830 7,262 32.0 6. 3 Motion pictures 16, 308 5, 046 3, 049 36. 9 -39. 6 Medical total 27, 178 8. 3. 898 -48. 2 -53. 9 Physicians and surgeons Dentists Other Legal services Educational Engineering and architectural 38, 184 14, 446 21,426 28,994 7, 132 19, 370 39, 610 47, 157 21, 046 37,386 32, 624 7, 007 33, 803 43, 077 53,033 25, 893 35,263 47, 736 12, 906 32, 482 45. 7 23. 5 45. 7 74.4 12. 5 -1. 8 74. 5 8. 7 12. 5 23. 0 -5.7 46.3 84.2 -3. 9 Source: "Partnership Income, 1947" Treasury press release No. S-2645, Wednesday, Apr. 4, 1951; "Part- nership Returns," statistics of income, 1955, IRS publication No. 369; "Selected Financial Data," statistics of income, 1957-58 (April 1959). PART 2: PRICES, INCOME, EMPLOYMENT IN SERVICE SECTOR COMPONENTS The foregoing sections have discussed output, employment, prices, and incomes in the service sector on an aggregate basis. In this section, a more detailed exami- nation will be made of some of the individual components of the sector. I. MEDICAL CARE SERVICES A. PRICES AND EXPENDITURE The Consumer Price Index for services related to medical, dental, optical, and hospital care increased nearly 60 percent from 1947 to 1958. However, profes- sional services prices increased much less than hospital prices, 35 percent as contrasted to 125 percent. Table 17 contains the items in the medical care price index. Data from "U.S. Income and Output," table VI-4 and 1.1-2. `Income per partner would be a preferable statistic, but the 1958 preliminary data do not include enough information to make that computation. Income per partnership will not be comparable between years if the average number of partners per firm changes. PAGENO="0117" PRICES AND WAGES IN MANUFACTURING INDUSTRIE~S 109 TABLE 17.-Medical service prices, 1947-58 Item Relative impor- tance, Decem- ber 1952 Price index 1947 1958 Percent increase Average annual rate of increase 1947-58 1947-53 1953-58 Medical services General practitioner fees - Surgeon fees Dentist fees Optometrist Hospital room rates - - Group hospitalization Professional service plus drugs 3 Medical care 4 All items Service less shelter 4.2 1.6 .3 .8 .3 .2 1.0 3.9 5. 1 100.0 16. 7 94. 5 96. 9 96.2 95. 2 96. 2 87.4 1 85. 6 96.3 94. 9 95. 5 94.7 149. 2 139. 3 122.7 131.4 116. 7 198.0 142. 2 129.7 144.6 123. 5 143.8 57.9 43. 7 27. 2 38.0 21.3 126. 5 2 35~ 7 34.7 52.4 29.3 51.8 4. 2 3. 4 2. 2 3.0 1.8 7.7 2. 7 3.9 2.3 3.8 4. 6 3. 1 2.8 3. 5 2. 2 9.2 2. 9 4. 2 3. 1 4.7 3.8 2. 1 1. 5 2.3 1. 3 6. 0 6.3 2.6 3.6 1. 5 2.8 `Index for 1953 annual average; item first included in index December 1950. Base: December 1952=100. Percent change 1953 to 1958. 3 Medical services less hospital rates and group hospitalization. 4 Includes drugs and prescriptions in addition to the services detailed above. Source: BLS, Consumer Price Index. Table 18 presents the record of consumer expenditures for medical care. TABLE 18.-Current dollar consumer expenditure for medical care, 1947-58 Percent Increase Aggregate expenditures Per capita expenditures Total medical care Physicians Dentists Hospital care Health insurance 125.4 93. 1 113. 5 209.2 165.0 86. 5 59.9 76.8 156.0 119.4 Source: Data from "U.S. Income and Output," table 1-4. B. HOSPITAL CARE The price-setting mechanism in hospitals is probably more nearly a cost-based system than it is a system of demand oriented profit maximization.1° Few pri- vate, nonprofit, voluntary hospitals make a surplus on current operation; fewer still cover depreciation. Most are, at best, pleased to cover out-of-pocket costs. The major cost item is personnel. On a per-patient-day basis, payroll costs accounted for 60.8 percent of total costs in 1958, for 60.7 percent in 1954, and 54 percent in 1947.11 About two-thirds of the employees of hospitals are in nonprofessional, nontechnical grade occupations.12 Employment costs have risen tremendously since 1947. The table below shows the increase in employment and payroll costs for all private, general and special short-term hospitals in the United States. TABLE 19.-Increase in employment and costs, private short-term hospitals, 1947-58 - Percentage Total expense per patient-day 154. 0 Payroll per patient-day~ 186.0 Full-time equivalent employees, number 82. 7 Full-time equivalent employees, per patient-day 44. 4 Source: "Hospitals," the Journal of the American Hospital Association, XXVII, pt. 2, p. 23 (June 1953) and XXXIII, pt. 2, p. 384 (August 1959). `° See pt. 3 below. Multiple regression analysis suggests a significant association between the level of unskilled wages and the level of hospital rates. See sources cited in table 19. 12 Ray E. Brown, "The nature of hospital costs," reprint from "Hospitals," the Journal of the American Hospital Association, Apr. 1, 1956. Brown, does, however, mention a trend toward more professionalism among technicians. The following section draws heavily on his article. PAGENO="0118" 110 PRICES AND WAGES II~ MANUFACTURING INDUSTRIES Other factors tending to increase hospital costs cited by Brown are also important. One factor is the nature of hospital costs. The major portion of hospital operations costs are not variable. A hospital is typically fully staffed, at all times ready for a peak load. Therefore, the occupancy rate is a critical factor in average operating cost per bed. In studies cited by Brown, it is shown that in a group of otherwise similar hospitals, those which had a better-than-average occupancy rate had less than half t.he unrecovered overhead cost per bed than did those hospitals whose occupancy rates were lower than average. `While desirable on other grounds, the tendency toward shorter stays makes syncronization of patient discharge and admissions more difficult; this leads to empty, nonrevenue-producing beds. Again, the population pattern of the United States is best served by an extensive system of smaller hospitals to supplement those in metropolitan centers. Occupancy rates are lower on the average in small hospitals than in large.13 Their costs per bed are therefore higher. A second factor is the increase in number of special diagnostic and therapeutic services provided by hospitals. Brown, quoting from the report of the Commis- sion on Financing Hospital Care, offers this statement, "The relationship between the level of per diem expense and the scope of hospital service ~vas apparent when per diem expense was determined for groups of hospitals classified by number of selected services they offered. * * *~ 14 C. PROFESSIONAL SERVICES Income and employment data with respect to medical practitioners is not easily available. Roberts 15 brings together data on the number of active practicing physicians, dentists, and professional nurses. The table below compares his data with Department of Commarce data on number of persons participating (includ- ing active proprietors of unincorporated enterprises) in medical and other health services. The declining proportion of professional personnel in the total illustrates the growing importance of nonprofessional technical and other less.~r skilled personnel. TABLE 2O.-Esnployment in medical services Year Active physicians, dentists, and nurses Persons engaged in medical and other health services Physicians, dentists, and nurses as a percent of total 1930 1940 1950 1953 1955 Thousands 439.2 529.3 667.8 706.2 745.6 Thousands 749 841 1,237 1,413 1,551 58.6 62.9 54.0 50.0 48.0 Sources: Roberts, "Trends in the Supply and Demand of 1~Iedical Care," table 8, p. 70; "U.S. Income and Output," table VI-16 and "Xational Income," table 28. Income data for physicians and dentists is not regularly published. The Survey of Current Business has conducted surveys of professional income, but none have been published for recent years.'° Partnership income data has been published by the Internal Revenue Service for the years 1947-48, 1953-54, and for 1957-58, preliminary data. See table 16 above. These data cannot safely be regarded as representative of average earnings for individual doctors for two reasons: (1) Data tabulated is for the partnership; if the average number of partners per partnership is not the same in each year, the results will not be Strictly com- parable between years on a per person basis. (2) Many doctors, dentists, and other practioners are not members of partner- ships. Sole proprietors and salaried medical practitioners experience different earnings records.'7 13 Brown, op. cit. says, "During 1954 those hospitals with less than 25 beds averaged 51.6 percent occu- pancy while those with over 300 beds averaged 71.8 percent occupancy." 14 Ibid. 1~ Markly Roberts, "Trends in the Supply and Demand of Medical Care," Study Paper 5 in the "Study of Employment, Growth and Price Levels" (1959). 1~ See \villiam Weinfeld "Income of Dentists, 1929-48" Survey of Current Business, January 1950; "Income of Physicians, 1929-49," ibid, July 1951; "Income of Lawyers in the Postwar Period," ibid, December 1956. `7 Ibid. PAGENO="0119" PRICES AND WAGES IN MANuFACTURING INDUSTRIES 111 II. TRANSPORTATION SERVICES AND PUBLIC UTILITIES A. PRICES AND EXPENDITURES Prices in the transportation services group experienced a greater percentage increase than any other service group in the Consumer Price Index from 1947 to 1958. Local transit fares increased 126.4 percent and led the other items by a wide margin. In fact this item which accounts for 27 percent of the weight of the transportation services index, contributed 40.5 percent of the rise. (See table 21.) The utilities rose much less, in general. TABLE 21.- Transportation service prices, 1947-58 Relative impor- tance, Decem- ber 1952 Price index 1947 1958 ~ Percent increase Average annual rate of change ~ 1947-58 1947-53 1953-58 Transportation services Auto repairs Insurance Registration fees Bus and transit fares Railroad fares Transportation total 1 Gas and electricity Telephone Postage Water 3. 7 89. 3 174. 1 95. 0 6. 3 9. 1 3.4 1. 1 1.0 . 3 1.0 .3 95. 5 85. 0 97. 9 88. 8 89. 7 141. 9 171. 0 126. 9 201. 0 133. 2 48. 6 101. 2 29. 6 126. 4 48. 5 3. 7 6. 6 2. 4 7. 7 3. 7 4. 3 9. 8 1. 3 9. 9 5. 4 3.0 2. 8 3. 5 5. 2 1.9 11.3 1.9 1. 1 .2 .3 90. 6 97. 6 95. 3 97.4 2 101. 3 140. 5 117. 0 127. 4 139. 9 136. 4 55. 1 19. 9 33. 7 37. 5 34. 6 4. 1 1. 7 2. 7 2. 9 6. 2 1. 1 4.4 3.6 1. 6 1. 9 . 7 2. 1 6. 1 I Includes in addition to the services shown in detail above, new and used autos, tires, gasoline and motor oil. 2 Index for 1953 annual average. Item was first included in index January 1953. Base: December 1952= 100. Source: BLS, Consumer Price Index. Consumers' expenditures for transportation services and utilities show divergent trends. Expenditures associated with the operation of private automobiles increased much snore than did expenditures for public transportation. Intercity rail transportation suffered the greatest decrease, despite fare increases measured by the Consumer Price Index of nearly 50 percent. The utilities experienced very large increases in expenditure with comparatively little price runup. Tabulated below is the percentage changes in consumer expenditures for various transporta- tion services in the period 1947-58. TABLE 22.-Expenditures for transportation services, percentage change, 1947-58 Item Percent change In expendi- tures Aggregate Per capita Automobile repair and maintenance Bridge, highway, and ferry tolls -- Auto insurance: premiums less claims Local transit, taxi, and communtation Intercity transportation: Railroad Bus Airline - -- household utilities: Electricity Gas Water Telephone and other communication 132.6 233. 3 278. 2 -5.8 -38. 7 -9.3 410.0 . 196. 5 206.0 121.7 175.2 76. 6 175. 0 213. 6 -22.0 -49. 4 -25.1 324. 1 145. 1 153.5 83. 5 128. 1 Source: Data from "U.S. Income and Output," table 11-4. PAGENO="0120" 112 PRICES AND WAGES IN MANTTFACTURTNG INDUSTRIES B. PUBLIC TRANSPORTATION The public transportation industries, expecially local transportation and rail passenger service, have suffered extensive declines in patronage. A drop in volume and revenue has severe repercussions on unit profits. A vicious circle can easily be set in motion. Higher rates, or an exogenous change in taste, leading to a drop in volume, decreases revenue. Costs are unlikely to drop as much as revenue because carriers are required to maintain service and because of the heavy fixed cost elements in transportation industry cost structures. Returns on assets or operations decline. Consequently, the carrier is eligible for a further rate increase in order to restore profits to a satisfactory level. If the same cycle repeats, repeated rate increases may take place with little improvement in earnings. Employment in both intercity railroads and local transit has been declining. At the same time hourly wage rates and average annual earnings have been rising. Average hourly earnings rose 87.7 percent and 73.8 percent, respectively, in the class I railroads and the local transit industries. Employment, however, de- creased 36.6 percent and 47.9 percent. Railway workers maintained and im- proved slightly their annual income position relative to workers in manufacturing industries; transit employees slipped somewhat. (See table 23 and 24.) TABLE 23.-Employment: transportation and public utility services, 1947-58 [In thousands] Local transit Class I rail- road Tele- Gas and phone electric utilities Local Class I Tele- transit rail- phone road Gas and electric utilities 1947 1948 1949 1950 1951 1952 1953 185 163 156 145 139 133 129 1,327 1, 191 1,221 1,276 1,226 1,207 585. 5 638. 9 638. 9 619. 5 644. 0 678.4 702.2 498.0 514. 9 526. 0 533. 3 543.3 554.2 1954 126 1, 065 1955 116 1, 057 1956 110 15, 043 1957 104 1 985 1958 96 1 841 -~ Percent change.... -47. 9 2_36 6 698. 8 706. 7 751. 2 768. 2 732. 4 557. 1 562. 1 569. 1 577. 2 578. 5 25. 1 -~- 2 41.8 1 Data for road with annual revenue above $3,000,000 before, above $1,000,000. 2 Percentage change, 1948-58. Source: ELS, "Employment and Earnings." TABLE 24.-Average hourly earnings: Transportation and public utility services, 1947-58 Year Class I rail- ways Local transit Gas and electric utilities Tele- phone Year Class I Local Gas and rail- transit electric ways utilities Tele- phone 1947 1948 1949 1950 1951 1952 1953 $1.30 1. 43 1.57 1. 73 1.83 1.88 $1.22 1.33 1. 43 1.49 1. 56 1.65 1. 71 $1.45 1. 54 1.60 1.51 1.81 1.94 $1.20 1. 25 1. 35 1.40 1.49 1.59 1. 68 1954 $1.93 $1.81 $2.02 1955 1. 96 1. 87 2. 10 1956 2. 12 1. 96 2. 22 1957 2.26 2.05 2.33 1958 2. 44 2. 12 2. 46 -~=~--=~ Percent change.~ 1 87. 7 73.8 1 69. 6 $1.76 1. 82 1. 86 1.95 2. 05 ~= 70. 8 1 Percentage change, 1948-58. Source: BLS, "Employment and Earnings." C. PRIVATE TRANSPORTATION Auto repair prices and automobile insurance rates accounted for just under 50 percent of the rise in transportation service prices. Higher auto repair costs begot higher insurance rates, although independent factors such as higher accident rates impinge upon insurance. The number of automobiles has increased 81.3 percent from 30.7 million in 1947 to 55.7 million in 1957 so that on the average there is now one car for every American family.18 Furthermore, automobiles are now more complicated machines. An increase in the number and skill of of auto repairmen may be necessary to attain a given level of performance or safety. IS "Automobile Facts and Figures," Detroit: Automobile Manufacturing Association, 1958 PAGENO="0121" PRICES AND WAGES IN MANuFACTURING INDUSTRIES 113 Employment data for auto service or repair personnel is not published; nor is regular wage series maintained. However, the Bureau of Labor Statistics has 2arried out community wage surveys covering auto repair personnel.19 Table 25 ~o1lects data for all the cities and years that are available for auto mechanics. I'he average rate was computed by weighting the cities according to estimated lumber of mechanics employed. TABLE 25.-Average hourly earnings, auto mechanics, selected years, 1947-58 1947 1948 1951 1953 1958 Atlanta 1.35 1.34 1.60 1.98 2.21 Baltimore 1.41 1.42 1.64 1.92 2.40 Boston 1.44 1.50 1.63 1.93 2.37 Cincinnati 1.35 1.55 1.70 (1) 2.42 Chicago 1.67 1.83 2.06 2.51 3.16 Cleveland 1.89 2.15 2.25 2.86 3.12 Detroit 2.05 2.09 2.26 2.78 2.97 LosAngeles 1.87 1.85 2.06 2.48 2.86 Kansas City 1.64 1.70 1.98 (1) (1) Minneapolis-St. Paul 1.50 1.59 1.78 (1) 2.71 New York 1.53 1.64 1.87 2.21 2.67 Philadelphia 1.45 1.61 1.69 2.11 2.71 Pittsburgh 1.40 1.56 1.94 1.98 2.72 Portland 1.60 1.73 2.01 2.19 2.52 San Francisco 1.81 2.00 2.03 2.24 2.71 Seattle 1.63 1.80 2.01 (`) 2.54 Washington 1.46 1.48 1.81 (1) (1) St. Louis (1) 2.08 1.93 (`) 2.83 Average wage 1.479 1.745 1.s55 2.328 f 2.761 I Not available. Source: BLS "Community Wage Surveys." Mechanics received a higher hourly wage than the average for all manufacturing employees in the cities surveyed. There is, however, a significant rank correla- tion 20 between the manufacturing wage rate and mechanics pay. Those cities with high manufacturing wages also had high mechanics wages. There is also a significant rank correlation 25 between the percentage increase in manufactursng and mechanic wages from 1951-58. III. OTHER NONPROFESSIONAL SERVICE INDUSTRIES Much of the employment in the conglomeration called the service industries is unskilled or at most requires little formal education. Often what training is needed is supplied on the job or through apprenticeship programs. Entry and exit of firms in this industry is relatively easy and small firms abound. This group of service suppliers includes laundry, drycleaning, barber and beauty shops, shoe repair shops, and other establishments which specialize in the care of persons and their belongings. Domestic servants and helpers can also be included as well as appliance and radio-TV repairmen, hotel workers, and similar groups. * A. PRICES The price changes measured by the Consumer Price Index for items in this group have, on the whole, increased about as much as the average for all services or a little less. However, there are exceptions. The price of men's haircuts and television repairs rose considerably faster than the average of all service prices while beauty shop service, drycleaning, and domestic service rose less than the service index.22 Laundry prices rose almost exactly as much as the average. See table 26. 19 These data are published through the regional offices of the Bureau of Labor Statistics. In addition, the National Automobile Dealers Association has begun a program of sampling their membership in order to ascertain data on wages, and pay plans. The first survey was published in the association magazine, NADA, in the June and July 1959 issues. 20 At the 0.03 level: 11 cities had both types of wage data for both years. 21 At the 0.01 level: correlation is for 1958, using 16 cities. 22 Preliminary analysis of the level of dry cleaning prices in a cross section of large cities showed strong association (at 1-percent level) with the level of unskilled wages in those cities. Surprisingly, no such relation appeared with laundry prices, but the partial correlation coefficients of personal care price and the unskilled wages were significantly associated at 5-percent level. For description of data, analysis, and results, see pt. 3. PAGENO="0122" 114 PRICES AND WAGES IN MANUFACTURING INDUSTRIES TABLE 26.-Other service prices, 1947-58 Item Relative impor- tance, Decem- ber 1952 Price index 1947 1958 ~ Percent increase, 1947-58 Average annual rate of increase 1947-58 1947-53 1953-58 Other services I Personal care 2 Man's hair cut Beauty shop service Beading and recreation 3 Movie admissions Television repairs Laundry services~ Drycleaning and pressing Domestic service 2.7 2. 0 . 6 . 3 5. 3 1. 4 . 1 .8 1. 2 . 6 97.1 97. 6 94. 3 100. 4 95. 5 98. 4 105.4 94. 2 96. 2 98. 9 1~.6 128. 6 162. 7 124. 1 116. 7 135. 7 135.9 142. 0 128. 7 134. 5 33.5 31. 8 72. 4 23. 6 17. 1 37. 9 `24.7 50. 7 33. 8 36. 0 2.6 2. 5 5. 1 1. 9 1. 4 3. 0 3. 8 2. 7 2. 8 2.6 2. 4 5. 7 1. 0 1. 3 1. 7 4. 6 3. 1 3. 3 2.7 2. 7 4. 3 3. 3 1. 6 5. 2 45 2. 9 2. 1 2. 3 I Includes miscellaneous services (weight 0.8) such as banking, legal, funeral prices, not published sep- arately. ~ Includes toilet articles in addition to the services detailed. 3 Includes newspapers, radio and television sets, toys and sports equipment in addition to services detailed. Index for 1953 annual average; item first included in index in 1953. Base: December 1952. `Percent change 1953 to 1958. Source: BLS, Consumer Price Index. B. EXPENDITURES Consumer expenditures for services in this group have shown diverse trends. While all have increased in absolute amount, on a per capita basis there has been some decline in laundry and such small increases in some others that real consump- tion has declined. Table 27 lists percentage changes in consumer expenditures on the major items in the group. TABLE 27.-Personal con sit nzplion expenditures, personal and ho use/i old services, 1947-58 [Percentage change] Change in expenditure Item Aggregate Per capita Drycleaning 38.3 14.5 Laundry 5.1 -12.9 Barber and beauty shops 88. 9 56. 5 Domestic servants 47. 8 22.4 Radio and TV repair 414.4 326.8 Movieadmissions -26.7 -39,3 Source: Data from "U.S. Income and Output," table 11-4. Demand for drycleaning and domestic service was at least strong enough that real output did not decline. Deflated drvcleaning cx penditures increased 3.4 percent, and domestic service 8.7 percent; laundry output, on the other hand, dropped from 1947_58.23 Deflated expenditure on domestic services increased only 8.7 percent. C. EMPLOYMENT AND WAGES Bureau of Labor Statistics employment and earnings data supplement the data already presented on average number of full- and part-time workers in the industries in this group. Tabulated below- is data for employment and hourly earnings in laundry, drycleaning, hotel establishments. Manufacturing wage rates are given for comparison (tables 28 and 29). 23 Based on aggregate expenditures deflated by the relevant CPI item index. PAGENO="0123" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 115 TABLE 28.-Employment in unskilled service industries, 1947-58 [In thousands] Year Laundries Dryclean- ing Hotels Year Laundries Dryclean- ing Hotels 1947 1948 1949 1950 1951 1952 1953 364.8 353. 7 345.4 342.1 342.7 340. 2 339. 2 153.7 151. 9 152.4 156.7 165.2 166. 0 166. 2 380.0 486. 0 476.0 471.0 479.7 493. 3 504. 3 1954 1955 1956._ 1957 1958 Percent change 331.4 332. 1 332.3 326.3 312.6 -14. 3 162.9 163. 4 165.8 169.8 167.4 8. 9 494.2 498. 7 515.4 531.0 511.3 34. 5 Source: BLS, "Employment and Earnings." TABLE 29.-Average hourly earnings: Unskilled service industries, 1947-58 Year Manu- factur- ing Laun- dry Clean- ing Hotels Year Manu- factur- ing Laun- dry Clean- ing Hotels 1947 1. 22 1948 1.38 1949 1.47 1950 1.55 1951 1.59 1952 1. 67 1953 1.77 . 77 .82 .84 .86 .92 . 94 .98 . 90 .96 .99 1.01 1.06 1. 10 1.14 . 66 .71 .74 .77 .82 .87 .91 1954 1955 1956 1957 1958 Percent change.. 1. 81 1.88 1.98 2.07 2.13 74. 6 1. 00 1.01 1.03 1.08 1.13 46.7 1. 19 1.20 1.26 1.30 1.32 46. 7 . 96 .99 1.03 1.08 1.13 71. 2 Source: BLS, "Employment and Earnings." Data on the incomes of partnerships in this group is tabulated in table 16 above. Income per partnership showed declines from levels achieved in 1953; laundry and drycleaning declined 12.8 percent, barber and beauty shops by 2.9 percent.24 PART 3: CITY CROSS SECTION ANALYSIS I. INTRODUCTION One approach taken in this study of employment, prices, and wages in the services industries was an analysis based upon a cross section of large cities. Data were collected for a number of economic variables for the period 1951-58. Since average price data is available for most cities only after 1954, some of the analysis was limited to the 4 years, 1955-58. The rationale upon which the cross section approach was based includes the following considerations: 1. The service sector, perhaps more than in any other sector, is local in nature and orientation. Typically, there are many small firms, often owned and operated by a single individual. 2. Wage rates are not typically set as the result of nationwide bargains between national unions and industrial associations. There are few, if any, regional or national chains, such as there are in retail groceries. Even in those trades which may have guild-type price and wage setting, there is probably little direct coordination between cities. 3. In the professional services where national associations are powerful and where entry is difficult because of training requirements and licensing laws, fee schedules are not uniform in level. 24 See footnote to table 16 for sources and cautions about the data. PAGENO="0124" 116 PRICES AND WAGES IN MANUFACTURING INDUSTRIES II. THE DATA A. CITY SAMPLE The cities chosen were the 20 large cities for which the Bureau of Labor Sta tistics (BLS) publishes price data gathered in connection with compilation o the Consumer Price Index. They are listed below: *Atlanta Minneapolis *Baltimore *New York Boston Pittsburgh *Cincjnnati *Philadelphia *Chicago Portland, Oreg. Cleveland ~ Louis *Detroit *San Francisco Houston Scranton Kansas City Seattle *Los Angeles Washington, D.C. *Price data available for 1952-58. B. PRICE DATA A yearly average price for each of seven services categories was computed and used in this Study. A simple arithmetic mean was used to summarize all the price quotations within a category into an annual quotation. There are seven prices for each city for each year. The following are the categories and the items included: Laundry service: Semifinished and finished. Dry cleaning: Man's shirt, delivered and women's dress, cash and carry. Automobile service: Brake relining and chassis lubrication. Hospital room rates, per day rate for the following types of accommodation: Men's pay ward, semiprivate room, private room. - Medical service: Office visit to general practitioner, house visit by general prac- titioner, obstetrical case, appendectomy (surgeon's usual fee excluding anes- thetic). Dental service: Tooth filling amalgam, one surface; tooth extraction without complication, including X-ray. Personal-care services: Man's haircut; shampoo and wave set, plain, short hair. Monthly prices are given for the five largest cities; the remaining 15 cities are priced 4 times per year such that five of them are priced each month. All data came from the BLS and can be found in the publications mentioned below. Data for December 1952 and for 1953-54 is from "Average Retail Prices: Collection and Calculation Techniques and Problems," Bulletin No. 1182 (June 1955). Only the 10 cities marked with asterisks in the list above are reported. Data for the full 20-city sample for 1955 is given in "Average Retail Prices," Bulletin No. 1197 (June 1956). Data for 1956-58 was taken from BLS worksheets in the Division of Prices and Cost of Living and will be published in the future. C. UNSKILLED WAGE RATES There are no wage data available for workers in service industries on a city basis. The Bureau of Labor Statistics does, however, publish periodically Bulle- tins in the series entitled "Occupational Wrage Surveys." Data on wages in office, professional, maintenance, and custodial occupations are given for a number of large cities annually (or at times, less regularly) by these publications. A composite unskilled wage rate was computed for each city and year using data from the "Occupational Wage Survey" series. Six occupations were chosen to be representative of the level of skill typically required in unskilled service industries. The average of the wage paid to workers in these six occupations was then used as an estimate of the level of wages paid in unskilled service industries in the same city and year. The six occupations chosen were male janitors, female janitors, male laborers (material handling), female packers (shipping), office boys, and female file clerks (class B), all employed in nonmanufacturing industries. PAGENO="0125" PRICES AND WAGES IN MANIJFACTURING INDUSTRIES 117 For Washington, D.C., no "Surveys" have been published by BLS. The salary. `or the lowest civil service grade, transformed to an hourly rate was used. When data for a year was missing, the gap was filled by interpolating between years. If more than 1 year was missing, the movement of manufacturing wages was used as a guide. Unskilled wage data was interpolated for the following cities and years: Baltimore: 1953-54, 1956. Boston: 1958. Cleveland: 1953, 1955, 1957. Detroit: 1952, 1954, 1956, 1957. Minneapolis: 1956. Portland: 1954. St. Louis: 1958. Seattle: 1952-55. No unskilled wage data at all was available for Cincinnati, Pittsburgh, Houston, Kansas City, and Scranton. These cities were removed from all analyses involv- ing wages. D. MANUFACTURING WAGES AND INDUSTRIAL EMPLOYMENT Manufacturing wage rates were supplied by the BLS and are published in its regular periodical, "Employment and Earnings." The May 1954 and May 1959 editions contain annual data which covers the entire period. Employment is reported for the major nonagricultural divisions: manufacturing, construction, trade, finance, service, government. The manufacturing wage data was not published for the following cities and years: Cincinnati, 1952; Houston, 1952-54; Washington, D.C., 1952-54; Chicago and Cleveland, 1951. E. LABOR MARKET CONDITION Major labor markets are classified using a system which takes into account the level of unemployment, the current labor supply and demand situation, expected short-run requirements for labor, and seasonal factors. Over the period, the classification scale has been changed; however, since this analysis was based on cross-section data only, the noncomparability of the two scales over time is of no importance. The labor-market condition is reported bimonthly. The Labor Department's ranking scheme was translated into numbers and the arithmetic mean of the 6 bimonthly rankings was used to represent the annual labor-market condition for each city and year. The data may be found in the periodical "Area Labor Market Trends" (and its predecessor, "The Bimonthly Summary of Labor Market Developments in Major Areas") published by the BLS Bureau of Employment Security. F. POPULATION Population estimates were taken from the annual May "Survey of Buying Power" issue of Sale Management Magazine. G. PRICE LEVEL Since the Consumer Price Index is a measure of the change in prices in relation to the base period 1947-49, divergences of the index reported for individual cities can show only differential changes in prices. They do not necessarily show differences which may exist in the level of prices among the cities. To transform the price index from a measure of change only, into a measure of price level, it is necessary to adjust the base-period level to reflect differences in cost among the cities. In 1946, the BLS conducted a study in which the cost in each city of a standard bill of goods and services (similar in scope to the coverage of the CPI) was determined. BLS Bulletin No. 927, "Workers' Budgets in the United States: City Families and Single Persons, 1946 and 1947," reports the results of the study. (See table 6, pp. 28-30 of the Bulletin.) The mean cost of the budget in the 20-city sample was computed. The cost of the budget in each of the cities was then converted PAGENO="0126" 118 PRICES AND WAGES IN MANUFACTURING INDUSTRIES into an index with base equal to the average cost of the budget in the 20 cities. The results are tabulated below. TABLE 30.-Cost of a standard budget for a~ family o.f 4, selected sample of cities, 1946 [Index numbers] Atlanta 101. 0 Minneapolis 104. 3 Baltimore 105. 0 New York 105. 8 Boston 106.7 Philadelphia 100.6 Chicago 104.8 Pittsburgh 103.6 Cincinnati 100.5 Portland 103.3 Cleveland 101. 8 St. Louis 106. 0 Detroit 105. 6 San Francisco 107. 1 Houston 95. 0 Scranton 98. s Kansas City 97. 7 Seattle 109. 3 Los Angeles 103. 8 Washington, D.C ~---- 112. 0 NoTE--Base is average of cost of budget in all cities. To this base was added the Consumer Price Index as reported by the BLS for each city and year. The new index shows price change adjusted for differences in price level in the individual cities. H. NONWHITE POPULATION Percentage of population which is nonwhite was taken directly from the "Coun.. try and City Data Book, 1956" (Bureau of the Census), table 3. The data refer to the year 1950 and were collected in connection with the regular decennial census. III. PRELIMINARY ANALYSIS The data described above were used in an attempt to gain understanding of the variables and mechanisms important in price and wage making in the services industries. The results are probably more suggestive than definitive for various reasons mentioned below. All data in a cross-section should represent simultaneous observations of all variables in all elements of the sample. In the data used here, the observations are considered to be annual averages. But some of the variables are averages of 12 observations; some of 6; some of 4 observations, not all of which refer to the same date in all cities; some, in the case of unskilled wages, are only one observa- tion per year. In years of rapidly changing conditions, the month in which the "representative" observation falls might make h~portant difference in results, especially when all the cities are not surveyed the same month.24 a Errors of observation are probably quite high in much of the data used. While the BLS does publish average price data drawn from their price observations for the Consumer Price Index, it must be remembered that main concern of the BLS is with measuring changes in price. If it becomes necessary to alter the sample of establishments surveyed, it makes little difference in the index-making process if, other things equal, the average price differs between the two establishments. As long as successive monthly changes have been the same, the new outlet can be linked smoothly into the index. The average price data may however show an abrupt change. Combining the labor-market index into an annual average suppresses much of its sensitivity. If it were feasible to collect the rest of the data on a quarterly basis, use of a quarterly labor market condition indicator would be better. Other difficulties include the small number of service occupations for which data were available, as well as the limited number of cities and years included. Nevertheless preliminary results of what has been found to date are summarized briefly here. Negative results as well as more encourging ones are indicated. 24a It is conceivable that something like the following could be true: assume that two cities in fact have the same average wage rate and that in both cities the wage-rate increases in uniform, 2-cent-per-month increments. Now, if the first city were surveyed in January and the second city in December, the second city would show- a wage 24 cents higher than the first. Taking simple first difference would not solve the problem because the given city is not always surveyed in the same month each year by BLS. Sometimes the "annual" first difference might span an interval of less than a year, sometimes more. PAGENO="0127" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 119 A. WAGES The first general hypothesis for investigation was that the industrial composition of the labor force, the labor-market condition, and the price level explain the level of manufacturing or unskilled wages. Three regressions were run. Two attempted to explain the level of unskilled wages; one of manufacturing wages. The first regressed the level of unskilled wages on the percentage of the total labor force accounted for by employment in the service sector,25 the labor-market condition (LMC), and the price level. The second regressed the unskilled wage level on the percentage of total em- ployed in the services industries, the LMC, and the price level. The third re- gression investigated the association of manufacturing wages on percentage of the total labor force employed in industrial employment, the condition of the labor market and the price level. The coefficients of multiple determination (R2) associated with the manufac- turing wage regression were significant at the 5-percent level for the years 1956-58, and nearly so in 1955. The beta coefficients associated with the price level were significant at the 5-percent level in 1955 and at the 1 percent level in 1957-58. In addition, in 1957 and 1958 the beta for labor-market condition was significant at the 5-percent level. (See appendix tables.) On the other hand, the regression of unskilled wages on the variables named above had no coefficients of multiple determination which were significant. The betas associated with labor-market condition and price level were significant at the 5-percent level in 1958 in the regression which included service sector employ- ment as one of the independent variables. The regression involving.services in- dustries employment as a variable had no significant betas. (See appendix tables 1 and 2.) B. SPILLOVER INVESTIGATION If the level of unskilled wages cannot be satisfactorily explained by employ- ment structure, labor market condition, or price level, another hypothesis is available. That is the "spillover" thesis. The form investigated here states that the level and change in unskilled wages are associated with the level and change in manufacturing wages more than with other explanatory variables. The analysis was carried out using rank correlation methods developed by Kendall.26 The coefficient of rank correlation is called tau by Kendall and will be used throughout as a shorthand expression. A sample of 14 cities was used, including Atlanta, Baltimore, Boston, Chicago, Cleveland, Detroit, Los Angeles, Minneapolis-St. Paul, New York, Philadelphia, Portland, St. Louis, San Francisco, and Seattle.27 Level of unskilled wage on level of manufacturing wage The results of correlation of cities ranked by level of unskilled wages and level of manufacturing wages were extremely significant. The correlations were car- ried out using data for the years 1951-58. The size of the sample is 14 cities for each set of computations reported. Cities omitted were Cincinnati, Houston, Kansas City, Pittsburgh, Scranton, and Washington, D.C. The values of tau and the significance level associated with each one are tabu- lated below: Rank correlation coefficients Year value of coefficient Level at which significant Year Value of coefficient Level at which significant 1951 1952 1953 1954 0.7023 .7079 .6630 .6742 0.0006 .0003 .0006 .0006 1955 1956 1957 1958 0.5889 .7300 .7889 .6409 0.0024 .0001 .0001 .0009 23 That is, the services industries, finance and insurance, transportation and public utilities. 26 M. 0. Kendall, "Rank Correlation Methods," London: Charles Griffin & Co., 1948. The method set forth by Kendall has the advantage over the simpler Spearman method for small samples. The distribu- tion of tau tends to normality for samples greater than 10 and has been computed for values under 10. 27 It will be noted that some of these cities have interpolated unskilled wage rates for some years. The first correlation reported below used both interpolated and uninterpolated data. No significant differences arose, so interpolated data was used throughout. PAGENO="0128" 120 PRICES AND WAGES IN AT~1JFACTURING INDUSTRIES The levels at which the tau coefficients are significant is very high; since rank correlation is a relatively weak method, however, little confidence can be placed in results which are only marginally significant. These results tend to be sup- ported by the simple product moment correlation coefficients which were computed in connection with the wage regressions already mentioned.28 The simple cor- relation between unskilled and manufacturing wages is significant at the 1-percent level. Simple correlation between other variables is not significant even at the 5-percent level. Simple correlation coefficients 1955 1956 1957 1958 Unskilled wage on- Manufacturingwage Labor market condition Pricelevel Manufacturing wage on- Labor market condition Pricelevel `0.8187 .2241 .3027 .1743 .4910 `0.8037 .3398 .2720 .3783 .5011 `0.7426 .4578 .3046 .3768 .5225 `0.7340 .3711 .3365 .4885 .3365 1 Significant at 1-percent level. Percent change of unskilled on percent change in manufacturing Turning to correlations of cities ranked by percentage change in unskilled wages on percentage change in manufacturing wages, two periods were chosen: 1951-58 and 1954-58. The values are tabulated: Year Tan Level at which significant 1951-58 0. 3626 .5385 0. 0409 .00453 1954-58 The connection for 1951-58 was significant at the 4-percent level; tau for the later period was significant at more than the 1-percent level. The tests carried out above seem to give support to the existence of a spillover between unskilled wages and manufacturing wages in the cities studied. It might be argued, however, that the strong association of level and rate of change between the two classes of w-ages is observed because other, third factors operate on both manufacturing and unskilled wages. The following alternative hypotheses have been tested: 1. The level and rate of change in wages is associated with tile state of the labor market within the city. 2. The level and rate of change in wages is associated with the concentration of nonwhite population within the city. 3. The level and rate of change in wages is associated with the level and rate of change in consumer prices within the city. Wage rates on labor market condition Cities were ranked by labor market condition and by level of unskilled wages and level of manufacturing wages for the years 1952, 1955, and 1958-years which covered both recession and high employment. 2S The number of cities included in the computation was 14. Washington, D.C., was included; Cleve- land was not. Washington was dropped because the unskilled wage is not strictly comparable with the other cities. Data for Cleveland became available at a later stage in the work. PAGENO="0129" PRICES AND WAGES IN MANUFACTURING INDUSTRIES 121 Values of tau and levels of significance are given below for both unskilled wages and for manufacturing wages: Year Unskilled wages ~ Manufacturing wages ~ Level at Tau which sig- nificant Tau Level at which sig- nificant 1952 1955 1958 -0.1189 .1695 .0634 0.3156 .1841 .4562 0.1453 .2374 -.0586 0.2743 .1292 .3669 None of the values are high enough that we may, with confidence, reject the null hypothesis, especially in view of the fact that the sign on the correlation coefficient seems to shift from positive to negative with little logic.29 Apparently the level and change in wage rates were not importantly associated with labor market condition in the city during this period.30 Wage rates on concentration of colored population Cities were ranked according to the percentage of their population which was found to be non-white in the 1950 Census and by level of unskilled wages. Results of rank correlation analysis show the following values for tau and significance levels. Year 1951 1955 1958 Tan 0. 4505 Level at which sig- nificant 0.015 .2747 .2527 .095 .115 The results are significant for 1951 at 1-percent level, but increasingly less so for the later years. This may reflect two things: (1) The rank of cities ordered by color concentration may be increasingly unrepresentative of the true order, the further in time one gets from 1950; or (2) The level of wages may be becoming less sensitive to concentrations of nonwhite population. Correlating change in unskilled wages on color concentration shows the follow- ing values of tau and significance levels. Values for percentage change per hour are shown. Period: 1951-58: Percent change Tau 0. 3406 Level at which significant . 0516 Unskilled wage change measured in percentage terms was somewhat significant at about the 5-percent level. 3~ The significance level was computed from a one-tail distribution on the a priori notion that wageswould be positively correlated with labor market condition. Since this did not turn out to be the cose, a two- tailed test may be more appropriate. If so, the significance levels should be doubled and the results become, a fortiori, less significant. 30 But note that of the six cities omitted because of lack of unskilled wage data, two cities, Scranton and Pittsburgh. ranked 20 and 18, respectively, in the cumulative labor market scores. In 1958, ScrantOn also ranked 20 (i.e., worst) in manufacturing wage level, but Pittsburgh ranked second, behind only Detroit. It seems obvious that the industrial structure-coal versus steel-rather than labor market condition, made the difference. 50505-80-9 PAGENO="0130" 122 PRICES AND WAGES IN MANUFACTURING INDUSTRIES Some outstanding anomalies can be observed in the ordering of the cities. Boston, New York, and Minneapolis-St. Paul were at the low end of the color concentration and also had low unskilled wage levels. The low wage levels in Boston and New York can undoubtedly be traced to the foreign immigrants who tend to concentrate at ports of entry. Furthermore, with respect to New York, the unskilled wage rank was worsened during the period. In 1951, New York ranked fourth; in 1955 and 1958 it ranked ninth (small numbers indicate high. wages). This experience matches the increased PuertoRican influx. . Boston ranked .10th, 12th, 12th, also showing some de- terioration. In the case of Minneapolis, no ready demographic explanation comes to mind.. Possibly its relative isolation frOm other larg& cities helps kOep wage rates low by lithiting nearby alternative opportunity. . Price and price levels on wages . . . . . . . . . - Correlations of . cities ranked by wages and annual Consumer Price Index reveal: .. . . : . . .. . 1. The OPT and the price level have shown stronger association with .wage levels as the decade progressed. 2. Manufacturing wages show greater association with the cost of living than do unskilled wages. . 3. Using OPT, lagged 1 year,: improve~ the relationship in the ~asè of unskilled wages throughout the .period. In the case of manufacturing, lag- ging wages improved. .the association in :1954 and 1958, but made it worse in 1951 and 1953~; : .. ~. . : 4. None of the values for tau were as great as they were for the correlation of unskilled wages on manufacturing wages for similar years. This analysis sii~gests that both classes Of wages appear to hO becotning mOre sensitive to the. UPT and price level. Only in 195.8 were all correlation coefficients (except one) significant at the 5-percent level: (See tabulated values.) - Year : .... .. . . . Unskilled Manufacturing Tan . . . J~ve~~ which siggificant Tan *. . . . - Levelat which . Si~iflCant CPI on wages 1951 0.0324 1222 0552 .3445 0i82 1006 . 1889 .5058 .2747 .1868 . .3846 . 0.456 251 413 .045 371 330 . 181 .008 .095 .192 .036. 0.0738 2i 8 1878 .3667 0615 0559 .3000 .5337 . . .3333 .2307 .2967 0.367 087 189 . . .035 417 413 .071 .006 ,. .0749 .138 .078 1953 1954 1958.._ ~lPI lagged 1 year on wages: . 1951 1953 1954 1958 Price level on wages: 1951 . .1953 - 1958 - . These data tend to support the spillover hypothesis as outlined above. There are some cautions which should be noted in generalizing to the services sector. (1) The unskilled wage rate is a composite of rates for certain unskilled jobs in nonmanufacturing industries surveyed by the BLS in a number of cities from time to time. (2) No test has been made of the validity of thisunskilled composite rate as a representative of either the level or change in wages in service establishments in the surveyed cities. . (3) Existence of a direct causal mechanism between the levels of manufacturing and unskilled wages has not been proved, only suggested. C. PRICES Each of the seven service category prices were regressed on the unskilled wage rate, the labor market condition and the population for each of the four years price data were available. PAGENO="0131" PRICES AND WAGES. IN MANUFACTURING -INDUSTRIES 123 The results can be summarized as follows: 1. Dry cleaning-The R2 was significant at the 5-percent level for every year. The beta coefficients associated with unskilled wages were significant at the 1 percent level in every year. 2. Hospital care.-Significant R2 values at the 5-percent level were present for all years. The beta coefficients for unskilled wages were significant at the 1-percent level every year. In 1957 and 1958 the betas associated with labor market condition were significant at the 5-percent level and had a negative sign: in these years cities' with relatively good labor-market conditions and relatively high hospital rates were associated. 3. Auto repairs.-The R2 was significant at the .5-percent level in 1958. The beta associated with population was significant at the 5-percent level in 1957 and the 1-percent level in 1958. Larger cities and higher auto repair prices were associated. The betas- for unskilled wages and labor-market condition were also significant in 1958. 4. Medical care.-In 1958 the R2 was just significant at the 5-percent level. The betas for unskilled wage and labor market condition were also just within the 5-percent significance level. As with hospital rates, there was an inverse relation between higher prices and poorei labor-market conditions. 5. Personal care.-None of the R2 values were significant at the 5-percent level. But the betas associated with unskilled wages were significant at:that level each year. No other betas were significant. 6. Dental care.-No R2 values were significant. There was weak and spotty significance of the betas associated with unskilled wages: 5 percent in 1955-56 and 1958. - . 7. Laundry prices.-No beta or R2 values were significant. - . -. In summary, the preliminary results reported are not completely at variance with a priori notions about the relation of unskilled wages- and service., prices. Hospitals, drycleaners, and laundries are, -in general, low paid, labor-intense industries The medical and dental professions are not Auto repair and per- sonal care are somewhere between. The results found here are strongly consistent in the case of hospitals and drycleaning; satisfactorily so in the other .cases. Only laundries were strongly out of place. . .. - . - :- . APPENDIX - - . - - -` - - DEFINITION OF SERVICES ITEMS INCLUDED -IN PERSONAL `-CONSUMPTION EXPENDITURES IN NATIONAL INCOME ACCOUNTS Clothing service Shoe repair - - ` - -, - - Laundry in establishments - - - . - . - - Drycleaning and dyeing - Other Housing-Space rental value -of- - . - -` . - Owner occupied nonfarm dwellings - - Tenant-occupied nonfarm dwellings - - - - -. - - - Farmhouses and other, i.e., hotels, clubs, etc. - -Household operation: , - - . - - Utilities Electricity, gas, water - Telephone, telegraph, cable, -and wireless - . . - - Domestic service Other: Appliance maintenance, moving expenses, postage, premiums on fire, -. etc., insurance - Medical care and death expense: - Physicians Dentists - - - - - - Other professional services: Miscellaneous curative and healing arts - Privately controlled hospitals and sanitariums Medical care and hospital insurance - - Funeral and burial expenses - - - - - PAGENO="0132" 124 PRICES AND WAGES IN MANUFACTURING INDUSTRIES Personal business: Brokerage charges and interest, investment counseling Bank service charges, trust services, safe deposit box rent Services rendered without payment by financial intermediaries, except life insurance companies Expense of handling life insurance Legal services Interest on personal debt Other: Money orders, net union dues, classified ads. etc. Transportation: User-owned transportation: Automobile repair, greasing, washing, parking, etc. Bridge, tunnel, ferry, and road toll Automobile insurance premiums less claims paid Purchased local transportation: Street and electric railway and local bus Taxicabs Railway commutation Purchased intercity transportation: Railway Intercity bus Airline Other Recreation: Radio and TV repair Motion-picture admissions Legitimate theater and opera, etc. Spectator sports Clubs and fraternal organizations Commercial participant amusements: Billiard parlors, bowling alleys, etc. Parimutuel net receipts Other Private education and research Relicious and welfare activities Foreign travel and remittances Source: "U.S. Income and Output," pp. 150-i, table 11-4. DEFINiTIoN OF SERVICE INDUSTRY AS USED IN GROSS PRODUCT ORIGINATING DATA Source: Standard Industrial Classification Manual. Hotels and other lodging places: Includes commercial establishments and insti- tutions engaged in furnishing lodging, or lodging and meals, and camping facilities and space, on a fee basis. Personal services: Includes establishments primarily engaged in providing serv- ices generally involving the care of the person or his apparel, such as laundries, cleaning and dyeing plants, photographic studios, barber and beauty shops, and cleaning and pressing shops. Private households: Includes private households which employ worl ers who serve on or about the premises in occupations usually considered as domestic service. Households classil~ed in this major group may employ individuals, such as cooks, maids, butlers, personal secretaries, and manarers of personal affairs; and outside worlers such as gardeners, caretalers, and other mainte- nance worl ers. Laundresses performing work in their own homes or in the homes of others are included. Commercial and trade schools and employment acencies: Tusiness and commercial education schools, civil service schools; placement arenoies; trade schools. Business services: Includes establishments renderinc services not elsewhere classifed to business enterprises on a fee or contract basis. (iSdvertising, consumer credit reporting, duplicating, mailing and stenographic services, services to buildings, news syndicates, etc.). Miscellaneous repair services and hand trades: Includes establishments engaged in miscellaneous repair services. It does not include auto repair, custom work, and shoe repair. Motion pictures: Includes establishments producin r and distributinc motion- picture ifims, exhibiting motion pictures iii con-n erc.ially operated theaters, and furnishing services to the motion picture industry. Amusement and recreation, except motion pictures: Includes establishments whose primary function is to provide amusement or entertainment on payment PAGENO="0133" PRICES AND WAGES IN MANIIFACTURING INDUSTRIES 125 of a fee or admission charge, except motion pictures. (Including museums, zoological gardens.) Medical and other health services: Includes establishments primarily engaged in furnishing medical, surgical, and other health services to persons. Associations or groups primarily engaged in providing medical or other health services to members are included, but not those which limit their services to the provision of insurance against hospitalization or medical costs. Legal services: Establishments engaged in offering legal advice or legal services on a contract or fee basis, the head or heads of which are members of the bar. Engineering and other professional services: Establishments performing services by engineers, architects, accountants, artists, lecturers, and writers; also in- cludes nonprofit educational and scientific research agencies. Educational services: Establishments furnishing formal academic or technical courses, and libraries. Nonprofit membership organizations: Organizations operating on a nonprofit membership basis for the promotion of the interests of the members. TABLE 1.-Regression coefficients, manufacturing wage regression Regression coefficient Partial cor- relation co- efficient Beta so- efficient Standard error of beta Value of R2 Manufactusing wage on- 1955 industrial employment Labor-market condition Price level 1956 industrial employment Labor-market condition Price level... 1957 Industrial employment Labor-market condition Price level 1958 industrial employment Labor-market condition Price level~....._ 0.0065 . 1081 .0285 . 0236 .0373 .0029 .0076 . 1705 . 0319 .0014 . 1925 .0335 0.4019 . 3134 ~. 5748 ~`. 9160 . 0751 . 1242 . 5217 ~. 5670 ~. 6676 .0923 ~. 6785 ~. 7004 0. 3952 - 3094 ~. 5776 `~. 9122 . 0769 . 1272 .4070 ~. 4895 ~. 6060 . 0693 ~. 7393 ~. 6293 0.2598 . 2705 . 2373 . 1152 .2946 . 2935 . 1921 .2052 . 1950 . 2159 . 2310 . 1851 0.4389 ~. 8478 ~. 6093 ~. 6531 * Significant at 5-percent level. **Signjficant at 1-percent level. N0TE.-For R2 to be significant at 5 percent It must equal 0.4660. TABLE 2.-Regression coefficients, unskilled wage regressions Regression coefficient Partial cor- relation so- efficient Beta co- efficient Standard error of beta Value of R2 1. Unskilled wages on- 1955 service-sector employment Labor-market condition Price level 1956 service-sector employment Labor-market condition Price level 1957 service-sector employment Labor-market condition Price level 1958 service-sector employment Labor-market condition Price level__ Unskilled wages on- 1955 personal-services employment Labor-market condition Price level 1956 personal-services employment Labor-market condition Price leveL__ 1957 personal-services employment Labor-market condition Price level 1958 personal-services employment Labor-market condition Price leveL..___ 0.0061 . 1660 .0281 .0012 . 1153 .0171 .0010 . 1874 . 0256 .0150 . 1783 .0360 .0097 .1489 .0258 -.0042 . 1095 . 0165 -. 0096 - 1788 .0242 . 0110 . 1393 .0289 0. 1731 . 4133 .4549 . 0345 .3803 . 3291 . 0304 . 5741 .4818 .3287 ~. 5989 * 5912 . 1088 .3942 . 4384 -. 0463 .3680 . 3262 -. 1174 . 5654 .4756 . 1089 . 5223 . 5286 0. 1715 .4661 . 5138 .0326 .3827 .3198 .0253 . 5841 .4638 .3433 ~. 7554 *~ 6678 . 0997 .4181 . 4714 -.0424 .3634 . 3089 -. 0936 . 5571 - 4376 . 1002 . 5902 . 5370 0.3085 . 3246 .3180 .2983 . 2942 .2901 .2624 . 2634 . 2667 .3119 . 3193 . 2880 .2382 .3081 .3055 .2891 .2904 .2830 .2503 .2569 .2559 .2892 . 3046 . 2739 0.2469 . 212& .4035 - . 4~92 . 2328 .2136 .4112 . 3787 *Slgnfficant at 5-percent level. NOTE-None significant. To be significant at 5 percent, R' must equal 0.5267. 50505-60-10 PAGENO="0134" Cl~ 0 0 00 0 0) 0 t?:J W w C~ ~rj U) (0 Co Co Co C) 11 It' I0-~ ~ 0) Co -100 0)0)00 0) ~ I0~tI)0.IIC.0lI0~. 1 Co Co Co ID Co Co Co Co I- 0 ~ 11111111 Co Co -1 -~ 00 0000 Co 0) ~i ~ I CD 0) 0.(00 Co 0) Co 000. 00 Co ~ II~'lI'-II~I Co Co Co Co Co Co Co Co Co Co Co Co ~ C i.) Co Co ~ Co 0.0)00 1.) 1')) Co I.) ID ~ I**I**I*I*II:II I i~II~II~I Co CD00-10D00~10)))000)t~D.1 ~ Co00000))OCoCo000000CD 0) (00)CoC(-'0)C(0)CoC) ~S ~ CoCoCo --1-ICoC/(C)ICo Co0)C)CoCoCo)).0)C)CoCoC) (0CoCo~))~~ C)) J0)0C))0000-10000)CD 001~1(0Co0)0)Co(-~Co0)l)) Co~C~00000~0)0Co 0)Co0)Co00CoCoI00(-~000~ 0CD0)CCCoCocCCoCoCo ~~~c0~CC 0~ CoC))0-00Co0D0DCCC))CoI)) hDCo0~~D~-~P ~Co~--. ~ OCD00o-'Co0~Q00)Co-~Co0) I(II*I*I*11I1 IIIIII~IIIIII~I*I I II~II~II~I (I ICo CD0)1Co0DCo00I-00-I))-.Co CoCo(0Co0000CoC)I0CoCD 0~ 00)00I-I~.ICoCo C)C)CCCJI00IC.(1C)IODC(Coo0 Il~II00II))~'I0)II Co C)) IIC)(I)-.&(( Co 0 00000Co00 ICoCoCo00CoCoCo(-'I~I.I ~ C~ICo~~I00~I0)0)000100 0.ICo.1Co)))CoCoI.~._100o0. 0)-I0000)CoD0I..DOD00Co00 0DCoID000C)03oOCoC))00~ 1Co~0C)IC))000Co0ICoI 000000CoCo)-00001.DC)-10) II Co I(C IIC(IlC)I$0)l(I0IlCo(lCoI I 0 I-UI0)II00II1.DIIOOICoIICD,lI))I00lI))DI, ~ I Co I PAGENO="0135" z tcS ~ Co t~io E~a S ~*° o a `U ~ U p w C) h (I) ct- CI) S CD Cii PAGENO="0136" PAGENO="0137" TECHNICAL NOTE NO. 2 PRODUCTIVITY AND OUTPUT IN THE POSTWAR PERIOD (BY THOMAS A. WILSON) 129 PAGENO="0138" PAGENO="0139" Technical Note 2 PRODUCTIVITY AND OUTPUT IN TilE POSTWAR PERIOD By Thomas A. Wilson I. INTRODUCTION Chapter 3 of the 1'Staff Report on Employment, Growth, and Price Levels" includes a discussion of the relationship between productivity and output in the economy.1 Much of that analysis focuses on the effects of intersectoral labor movements upon the rate of growth of aggregate productivity. The underlying data for that portion of the analysis are presented in the report. Conclusions drawn about the relationship between output and productivity within the major sectors of the economy, however, were partly based upon new data gathered and analyzed by the committee staff. This paper's purpose is to present and discuss the productivity and output data obtained by the committee staff, together with an analysis of the relationship between output and produc- tivity within the manufacturing sector of the economy. II. THE ESTIMATES A. MAJOR SECTOR ESTIMATES Table 1 presents output, man-hour input, and productivity indexes for the major sectors of the economy. The reader must be forewarned, however, that productivity estimates are only as reliable as the output indexes on which they are based. Before using the productivity indexes for analytical purposes, the output source materials, discussed below, should be consulted. (1) Manufacturing estimates A: The output index is a Federal Reserve output index for manufacturing, based upon 1954 value added weights.2 The man-hours index is based upon Bureau of Labor Statistics (BLS) data, and is an estimate of total man-hours.3 Estimate A was presented in order to compare a produc- tivity estimate based upon an output index with a productivity estimate based upon a real-value-added index. Estimate B is the published BLS index of real value added per man-hour in manufacturing. These two estimates show general agreement. Estimate B is the better of the two, and was therefore used in the staff report. (2) Mining: Output is a Federal Reserve index for mining based upon 1954 value-added weights. The man-hours index is based upon BLS data, and is a total man-hours index. (3) Public utilities: The output index is the Schultze output index. The man-hours index is based upon BLS data. (5) Railroads: Revenue traffic, man-hours, and productivity are based upon the published BLS indexes. (6) Other transportation: Output is an adjusted Schultze output index. Em- ployment data is from BLS. No adjustment was made for possible changes in average weekly hours. (7) Contract construction: Output is an adjusted Schultze index. The man- hours index is based upon BLS data, and is a total man-hours index. (8) Agriculture: The productivity index is that published by BLS. The man- hours index is based upon Commerce data for persons engaged in production, and Census data for average weekly hours. The output index was obtained by multi- plying productivity by man-hours. 1 See pp. 88-94. 2 It must be stressed that these are not official Federal Reserve output indexes. 3 Employment multiplied by average weekly hours, both as published in Employment and Earnings. For manufacturing, mining, and contract construction, total man-hour estimates were constructed by adding production workers, man-hours, and non-production-worker man-hours (assuming that nonproduc- tion workers worked a 40-hour week). 4 All Schultze output indexes are from Charles L. Schultre, "Prices, Costs, and Output for the Postwar Decade: 1947-57" New York, Committee for Economic Development, 1959, table 2, p. 29. 131 PAGENO="0140" 132 PRICES AND WAGES IN MA:N1IFACTURING INDUSTRIES (9) Services: The output index is based upon deflated net national income originating in services, as published in U.S. Income and Output and Survey of Current Business. The price deflator used was the implicit price deflator for "Other consumer services." The employment index is derived from the number of persons participating in production, as published in U.S. Income and Output. No adjustment was made for changes in average weekly hours. (10) Trade: The output index was obtained by combining the Schultze output indexes for who1e~ale and retail trade, using as weights national income originating in each sector in 1947. The man-hours index is based upon the number of persons participating in production, as published in U.S. Income and Output, adjusted for changes in average weekly hours as published by BLS. Some of these productivity indexes appear to be fairly reliable; others are less so. In particular, the indexes for contract construction, services, and trade should be used with caution-i.e., one should not attribute much to small changes in these indexes. B. ESTIMATES FOR TWO-DIGIT MINING AND MANUFACTURING INDUSTRIES Estimates of output, man-hour input, and productivity for all two-digit manu- facturing and mining industries are presented in table 2. Each output index is based upon weighted combinations of four-digit output indexes,5 the weights used being proportionate to value added in 1954. The man-hours indexes are all based upon BLS data, and are all total man-hours indexes. Users of these indexes should bear in mind that the output and man-hours series are not strictly comparable, and that, for a particular industry, these productivity indexes mayO therefore be in considerable error. Another weakness of these productivity indexes is that they are based upon gross output rather than real- value-added indexes. Insofar as movements of the output indexes used deviate from movements of real value added, the productivity estimates will deviate from true productivity. These estimates should consequently be interpreted with caution, especially if used to analyze the behavior of productivity within a particular industry. III. THE RELATIONsHIp BETWEEN PRoDuCTIvITy AND OUTPUT WITHIN MANUFACTURING DURING THE POSTWAR PERIOD The staff report states that output and productivity for the manufacturing industries were positively associated during the postwar period.7 This section will present the analysis upon which that conclusion rested. Tables 3, 4, and 5 summarize the results of various correlations between output and productivity that were computed using the data for manufacturing shown in table 2. The results of these correlations are clear. Changes in productivity are positively associated with changes in output, both for individual industry time series and for cross sections for each year. A comparison of changes in the rate of growth of output with changes in the rate of growth of productivity for all two-digit manufacturing and mining indus. tries is presented in table 7. The five manufacturing and four mining industries which experienced a greater rate of growth of output after 1953 also experienced a more rapid growth of productivity. Of the 17 manufacturing industries which had slower output growth after 1953, 8 also had slower productivity growth. The lone mining industry with a slower output growth also experienced a slowed growth of productivity. Evidently an acceleration or deceleration in the growth of output tended to be accompanied by a similar change in the rate of growth of productivity. Although the conclusion that changes in productivity are positively associated with changes in output is a firm inference from these statistical analyses, one cannot attribute all of the observed relationship between the two variables to a one-way causal relationship. Whereas changes in output may stimulate similar changes in productivity by increasing the rate of utilization of existing capacity or by stimulating innovation within the industry, it is also clear that changes in productivity will tend to result in similar changes in output. Improved pro- ductivity, by lowering costs and prices, will lead to higher levels of output. 6 These were made availabie by the Federal Reserve, but are not official Federal Reserve output indexes. `The four-digit output index (upon which the two-digit indexes are based) are gross output rather than real-value-added indexes. ~ P. 91. PAGENO="0141" PRICES AND WAGES IN MANIIFACTURING INDUSTRIES 133 In view of this identification problem, one must not stretch an analysis based upon simple correlations too far.8 In particular, it would not be prudent to assume that increases in output would yield gains in productivity in a period when output was already pressing upon available capacity. Since the available evidence suggests that considerable underutilization of `capital existed during the 1956-57 boom,9 and since cross-sectional correlations for both those years reveal a positive relationship between changes in output and `changes in productivity, it seems safe to conclude that a further expansion of output would have resulted in productivity gains. 8 Another weakness of simple correlation coefficients between output and productivity is due to the cor- relation of errors of observation in output with errors of observation on productivity. If these observational errors are large relative to the true variance of the series, they will cause biases in the correlation coefficients. `See staff report, pp. 70-71. PAGENO="0142" 134 PRICES AND WAGES IN MANIIFACTURING INDUSTRIES c~ t- t C~ - t~- co c~ - - -~ - ~- r- r~ c~ c~ - ----~-----------,---,----- © ~ ~ ~ ~ cc cc ~ c~cc~ ~ ~ ~ ~ CO © t- © r- c~ r- cc cc cc cc t~- © © cc - cc © - c~ t~- cc cc cc cc cc CO CO CO cc © C'1 OC CO CO C~ CC © Cl CO - - CO cc c. - cc cc Cl CO C-Cl cc CO Cl CCC) CO C- -~ Cl CO Cl © C ~ © Cl .- cc © cc C-Cl cc cc cc CC cc ~ cc cc © CC cc cc © cc CO C) C- ~) cc CO cc ~ CO cc CO CO cc © ~ Cl cc ~ CO © c-cc © cc Cl Cl CO C) cc Cl cc ~ ci © ~ cc C) CO CO cc Cl CO CO ~C CO CC CC cc CO cc Cl `-CCC C-CC "C' CO CC cc ,-c CO CO CO cc CO CO CO C) C) - cc CC CO CO CO CO -~ c-Ct- -~ CO CO CO cc CO - CC CO C-cc "C CO CO -~ cc CO C) Cl CO CO - C) Cl cc CO Cl Cl CO CO CO - Cl CO Cl ccci CO C) CO -~ - CO CO - CO CO C) CO ~` ~` cc CO c-cc Cl CO CC cc © cc CO c-cc c- cc © c- cc ccci CO cc cc CO cc CO e~.-~c -~--~c-~ -~~)C ojocc5 cc~,cCcj ~ c-cc5c~ `cCccc5 ~5c~-& ~ CO - CO CO C) Cl CO - - C) - C) COC)'- CO CO CO CO CO CO CO CO cc © CO C- CO CO CO cc -`C COt- cc CO CO C-Cl CC © Cl © cc -~` CO CO -C Ci cc -~` `C' Cl - t~CCC'~CI ~C-~c-~ -5c~-~ ~ ©c~ci3 ,-~t-tc3 c-~c~ C- ccC,- ~ COO) COCOCO C)COCO C)COCO COCOC) C)C)CO C)COCO C)C)CO C)COCO ©COCO C) © © CO CO CO C) CO CO CO cc CO cc t- CO C) CO CO Cl ci cc cc COt- CO CO ~ CO C) C) ,~CSd C-CCI5 .-c~cc ~.cCC dd~ c-~c'~c~ c~ct- CCC~ ddc~ CO CO CO CO CO CO CO C) CO C) CO CO C) CO CO C) CO CO CO CO CO C) CO C) CO CO CO C) CO CO C) Cci'-) C~'C cc cc C) CC C- CO `C) CC CO C-) C CO ~C) .~ ,~ C CO~ C- C) C) ~ - © ~C ~) ~ ~ cc CO C Cl Cl - ~` Cl - COt-cc Cl - - CO CO CO CO cc CO C- - ~` C- cccc© cc cc CO C) C- - CO Cl © cc ~` © cc cc CO CO C) C) C) C) CO CO CO C) C) CO CO C) C) C) CO C) C) CO CO CO CO C) CO C) C) C) C) C) CO C) C) C) C) C) C) CO PAGENO="0143" TABLE 2.-Output, man-hour input, and productivity A. MANUFACTURING INDUSTRIES 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 20 21 Food and beverages: Output Man-hours Output per man-hour Tobacco: 101 102. 18 98. 8 99 100.22 98.8 100 97. 59 102. 5 22 Output Man-hours Output per man-hour Textiles: 98 105.85 92. 6 101 101. 04 100 93. 14 108.4 96 23 24 25 Output Man-hours Output per man-hour Apparel: Output Man-hours Output per man-hour Lumber and wood products: Output Man-hours Output per man-hour Furniture and fixtures: 99 103. 79 95. 4 97 98. 72 98. 3 101 106. 60 94. 7 105 105. 35 99. 7 102 101.77 100.2 105 102. 49 102.4 104 90.86 105. 7 101 99. 52 101. 5 93 90.92 102.3 96 26 27 28 Output Man-hours Output per man-hour Paper and allied products Output Man-hours Output per man-hour Printing and publishing: Output Man-hours Output per man-hour Chemicals: 100 102.31 97. 7 100 101.36 98. 7 96 99. 51 96. 5 104. 19 99.8 102 102. 38 99. 6 101 100. 67 100.3 103 93. 50 102. 7 98 96.26 101.8 103 99. 82 103.2 101 29 Output Man-hours 102. 52 Output per man-hour 93. 6 Petroleum: Output 97 Man-hours 98.82 Output per man-hour 8.2 103. 37 99. 6 104 102. 53 101.4 94. 11 107. 3 98 98. 66 99.3 [Index 103 97.86 105.3 105 100.06 104.9 108 99. 56 108.5 109 99.45 109.6 111 97. 48 113.9 116 99. 32 116.8 120 98. 47 125.9 111 102 90. 70 112. 5 108 92. 54 116. 7 112 93. 65 119. 6 110 91. 35 120. 4 105 90. 08 116. 6 108 91. 48 118. 1 88. 06 126. 1 111 109 100.45 108. 5 106 97. 03 109. 2 105 91.89 114.3 107 91. 14 117.4 100 80. 69 123. 9 110 84. 71 129. 9 82. 24 135. 0 108 102. 35 105. 5 106 102. 85 103. 1 111 105. 55 105.2 113 107. 84 104.8 109 105. 47 103. 3 120 106. 15 113.0 105. 83 114. 3 119 112 100.09 111.9 112 104. 92 106.7 110 98.47 111.7 114 94. 77 120.3 111 86. 71 128.0 123 92. 79 132.6 90.00 132.2 145 117 111.68 104.8 111 107.75 103.0 114 108.41 105.2 119 111.20 107.0 124 100.75 123. 1 141 110.18 128. 0 112.33 129. 1 118 106.01 111.3 125 111.23 112.4 119 108.85 109.3 130 115.05 113.0 132 113.63 116.2 149 119.22 125.0 156 122.52 127.3 108 102.48 105. 4 110 103.72 106. 1 110 105.39 104. 4 115 108.68 105. 8 120 109.29 109. 8 127 113.04 112. 3 116.53 115.0 124 100.63 123. 2 139 110.73 125. 5 144 112.93 127. 5 154 118.51 129. 9 153 115.72 132. 2 178 119.17 149. 4 191 122.27 156. 2 110 98. 75 111.4 122 104. 81 116.4 121 104. 70 115.6 129 107. 75 119.7 123 104.82 117.3 135 105. 08 1 128.5 104.77 133.6 0 c12 120 95. 15 126. 1 115 83.91 137.1 106 76. 89 137.9 119 104.00 114.4 109 79. 19 137.6 139 109.17 127.3 155 121.00 128.1 134 116.97 114.6 199 123.11 160.9 139 103. 32 134.5 122 93, 37 130.7 123 80. 64 152. 5 103 71.55 144. 0 117 98.86 118.3 110 75. 38 145.9 132 102. 94 128.2 157 115.95 135.4 131 114.88 114.0 199 119.58 166.4 130 97.16 1338 PAGENO="0144" 1947 1948 1949 1950 1951 1952 1953 1954 1955 1950 30 Rubber: Output 106 102 93 111 110 117 126 118 138 132 132 123 Man-hours 108. 59 101. 69 89. 74 101. 14 108.07 109. 20 112.93 99.85 113. 49 109. 14 108. 14 97. 65 Output per man-hour 97. 6 100.3 103. 6 109. 7 107. 3 107. 1 111. 6 118.2 121. 6 120. 9 122. 1 126. 0 31 Leather: Output 105 100 95 104 97 104 104 103 112 114 113 109 Man-hours 104. 58 101. 23 94. 18 97.94 89. 67 97. 06 96. 73 90. 95 96. 39 94. 94 92. 04 87. 63 Output per man-hour 100. 4 98. 8 100. ~ 106.2 108.2 107. 2 107. ~ 113.2 116. 2 120. 1 122. 8 124. 4 32 Stono, clay, and glass: Output 90 104 97 117 129 123 126 122 130 145 143 135 Man-hours 101.86 103.62 94.52 103.65 111.87 106.54 109.03 102.73 111.35 113.50 109.94 101.33 Output per man-hour 97. 2 100. 4 102. 6 112. 9 115. 3 115. 4 115. 6 118.8 124. 8 127.8 130. 1 133. 2 33 PrImary metals: Output 103 107 90 114 125 113 130 106 137 135 130 102 Man-hours 104.35 106. 06 89. 60 103.93 115. 48 106. 45 115. 63 97.84 112. 10 113.86 110.36 00. 42 Output per man-hour 98. 7 100.9 100. 4 109. 7 108. 2 106. 2 112.4 108.3 122. 2 118. 6 117. 8 112. 8 34 FabrIcated metals: Output 102 104 93 114 121 117 132 119 130 130 133 122 Man-hours 105.05 103.53 91.43 105.88 115.93 113.77 124.65 112.56 121.01 121.15 121.62 108.90 Output per man-hour 97. 1 100. 11 101. 7 107. 7 104. 4 102. 8 105.9 105. 7 107. 4 107.3 109. 4 112. 0 35 Nonelectrlcal machinery: Output 104 106 00 103 125 133 139 119 128 143 135 114 Man-hours 106. 40 105. 89 87. 71 94. 85 115. 87 118. 97 120. 71 106. 52 111. 40 121. 90 119. 79 100. 94 Output per man-hour 97. 7 100. 1 102. 6 108. 6 107.9 111. 8 115. 2 111. 7 114. 9 117.3 112. 7 112.0 36 Electrical machinery: Output 103 102 95 116 129 156 174 159 176 195 196 172 Man-hours 108. 37 102. 43 89. 21 105. 10 121. 10 130. 12 145.34 127. 05 133. 57 143. 14 143.84 130. 44 Output per man-hour 95. 0 99. 6 106. 5 110.4 106. 5 119.9 119. 7 125. 1 131.8 136. 2 136. 3 131. 9 37 Transportation equipment: Output 94 102 103 120 135 151 185 168 201 195 212 180 Man-hours 102. 14 101. 12 06. 75 104.84 125. 03 141. 43 162. 46 142. 37 154. 34 150. 68 153. 77 129. 00 Output per man-hour 92. 0 100. 9 106. 5 114. 5 108.0 106.8 113.9 118. 0 130. 2 129.4 137. 9 139. 5 38 Instruments: Output 103 104 93 108 124 148 161 156 167 179 184 173 Man-hours 104.90 102. 52 92. 58 99. 77 119. 39 126. 33 135. 11 125. 93 128. 09 133.88 133. 65 123. 84 Output per man-hour 98.2 101. 4 100. 5 108. 2 103.9 117. 2 119.2 123.9 130. 4 133. 7 137. 7 139. 7 39 Miscellaneous manufactures: Output 97 105 98 117 111 113 125 121 138 147 146 141 Man-hours 103.28 103.93 92.80 101.44 104.15 102.39 111.15 102.24 107.72 110.55 107.25 100.08 Output per man-hour 93.9 101.0 105. 6 115.3 106. 6 110.4 112. 5 118.3 128. 1 133. 0 136. 1 140. 9 TABLE 2.-Ouepug, man-hour input, and produclivity-ContjIlued A. MANUFACTURING INDUSTRIES-ContInued [Index numbers, 1947-49=100] Lzj CI) PAGENO="0145" B. MINING INDUSTRIES 10 Metal mining: Output - 101 105 93 108 118 108 118 97 123 130 137 113 Man-hours - 101. 55 104. 05 94. 41 96.28 103.28 102. 55 107.80 95. 68 100. 58 107. 70 107. 14 86. 12 Output per man-hour 99. 5 100.9 98. 5 112.2 114.3 105. 3 109. 5 101. 4 122. 3 120. 7 127.9 131.2 `d 11 Anthracite mining: Output 109 109 82 84 82 77 57 52 48 55 49 42 ~ Man-hours 108. 07 100.38 85. 56 87.99 79. 55 73. 03 58. 52 44. 69 38. 42 35.31 32. 41 21.82 ~rj Output per man-hour 100.8 101. 6 97.0 96.4 104. 1 106. 8 100.2 120.3 131. 7 102.2 155. 2 204.3 rj 12 Bituminous mining: Output - 114 108 79 93 96 84 81 70 85 90 88 72 Man-hours 110. 61 106.24 83. 15 83.07 84. 43 72.33 64.28 48. 53 52. 84 55. 51 54. 27 43.24 Output per man-hour 103. 1 101. 7 95. 0 112.0 113. 7 116. 1 126. 0 144. 2 160.9 162. 1 162. 2 166. 5 ~ 13 Petroleum and gas: Output - 96 105 99 108 122 125 131 131 139 146 146 137 Man-hours 94. 68 104.05 101.27 102. 09 109.98 117. 70 120. 06 121. 91 127.34 131. 50 131. 59 122. 01 Output per man-hour 101.4 100.9 97.8 105.8 110.9 106. 2 109. 1 107. 5 109.2 111. 0 111.0 112.3 14 Stone and earth: Output 96 104 101 115 126 131 135 148 161 174 174 171 ~ Man-hours - 101.84 102. 65 95. 51 97. 02 106. 58 107. 93 109. 42 107.04 111.39 118. 72 115. 11 109.35 Output per man-hour 94. 3 101.3 105. 7 118. 5 118.2 121. 4 123. 4 138.3 144. 5 146. 6 151. 2 156. 4 -4 NOTE.-FOr a discussion of these estimates, see text. 0 ci w L~j I. PAGENO="0146" 138 PRICES AND WAGES fl~ A~UFACTURfl~G ~DUSTRIES TABLE 3.-Correlation between output index and productivity index: ~!ross sections for all manufacturing industries, 1947-58 correlation coefficient Year-Continued 0. 5734 1953 1, 5885 1954 * 4377 1955 1~ 6230 1956 * 4401 1957 °. 5015 1958 Year: 1947 1948 1949 1950 1951 1952 I Significant at 1-percent level (r.oi=O.5614). 2 Significant at 5-percent level (r.es=O.443S). N0TE.-Sample size=20. TABLE 5.-Correlation between changes in output and changes in productivity: Time series for the period 1948-58, all manufacturing industries correlation Industry: coefficient 20 Food and kindred products 0. 4170 21 Tobacco 1 7261 22 Textiles -. 1859 23 Apparel 2~ 7830 24 Lumber . 4420 25 Furniture . 3032 26 Paper and allied products 2~ 7843 27 Printing and publishing 2~ 7730 28 Chemicals 1 6905 29 Petroleum and coal products 2~ 8820 30 Rubber . 1288 31 Stone, clay, and glass . 2647 32 Leather 1, 7103 33 Primary metals 2~ 8785 34 Fabricated metals . 4241 35 Nonelectrical machinery . 4853 36 Electrical machinery . 3826 37 Transportation equipment . 3577 38 Instruments . 4289 39 Miscellaneous . 5682 1 Significant at 5-percent level (r.cs~0.6021). 2 Significant at 1-percent level (r.oi=O.7348). NoTE-Sample size=11. correlation coefficient 0. 4017 2 4498 1, 6013 2 5474 2 4995 2 5192 TABLE 4.-Correlation between changes in output and changes in productivity: Cross sections for all manufacturing industries, 1948-58 1 correlation correlation Year: coefficient Year-Continued coefficient 1948 2 0. 6206 1954 0. 5168 1949 ~. 4625 1955 2 743~ 1950 ~. 5296 1956 2 5633 1951 * 1089 1957 2 5900 1952 2 7424 1958 2 7505 1953 ~. 4614 1 These correlations differ from those in appendix B of Study Paper No. 21, which also relate changes in output to changes in productivity, because of two differences in the variables used. The correlations given here are based on absolute changes in the indexes of output and productivity; in addition, productivity is measured in terms of output per total worker man-hour. In Study Paper No. 21, the correlations are based on percentage changes in output and productivity and on productivity per production worker man-hour. In addition, the correlations above are based on 20 industries; the correlations in Study Paper 21 are based on 19; "Miscellaneous" was omitted from the latter cross section. 2 Significant at 1-percent level (r.o,=O.56i4). Significant at 5-percent level (r.e~=0.4438). NOTE-Sample size=20. PAGENO="0147" PRICES AND WAGES IN MANTJFACTURING INDUSTRIES 139 TABLE 6.-Changes in productivity compared with changes in output: All manu- facturing and mining industries, 1947-53, 1953-57 1947-53 1953-57 Average annual percent change in output per man-hour Average annual percent change in output Average annual percent change in output per man-hour Average annual percent change in output MANUFACTURING -- 20 Food and kindred products 13% 11% 31/2 23/2 21 Tobacco 43/2 2 33/2 13/2 22 Textiles 13/2 43/s 1% 23 Apparel 1% 23/2 23/2 1% 24 Lumber 4 2 33/2 -l3/~ 25 Furniture 15% 3 43~2 4 26 Paper and allied products 1~% 43/2 3% 43/2 27 Printing and publishing 13% 3 2 4 28 Chemicals - 5% 83/2 53/2 6% 29 Petroleum and coal products 33% 43/2 3 30 Rubber 2% 3 23/2 1% 31 Stone, clay, and glass - 23/2 43/2 3 33/2 32 Leather 1% -3% 33/2 2% 33 Primary metals 23/2 4 1% 0 34 Fabricated metals 11/2 4% 5% 3/2 35 Nonelectrical machinery 2% 5 ~5/~ _3% 36 Electrical machinery 3% 9% 33/2 3 37 Transportation equipment - 3% liVe 5 33/2 38 Instruments 73% 33% 33/2 39 Miscellaneous 43% MINING 10 Metalmining 13% 2% 4 33% 11 Anthracite -36 11~/~ 11% -2% 12 Bituminous 33/2 -5% 63/2 2% 13 Petroleum and gas 13/2 5% 5% 2% 14 Stone and earth minerals 43/2 5% 5% 63/2 N0TE.-Aunual average percent changes are base year to terminal year compound growth rates. TABLE 7.-Classification of manufacturing and mining industries, by changes in growth rates of output and productivity [1953-57 compared with 1947-531 Rate of growth of productivity lower 1953-57 than 1947-53 Rate of growth of productivity Higher 1953-57 than 1947-53 Rate of growth of output lower 1953- 57 than 1947-53. 13 Petroleum and gas mining - 21 Tobacco 24 Lumber 28 Chemicals 29 Petroleum and coal 33 Primary metals 34 Fabricated metals 22 Textiles. 23 Apparel. 30 Rubber. 31 Stone, clay, and glass. 37 Transportation equipment. 38 Instruments. 39 Miscellaneous. Rate of growth of output higher 1953- 57 than 1947-53. 35 Nonelectrical machinery~ - - 36 Electrical machinery 10 Metal mining. 11 Anthracite mining. 12 Bituminous mining. 13 Stone and earth minerals. 20 Food and kindred products. 25 Furniture. 26 Paper. 27 Printing and publishing. 32 Leather. 0 PAGENO="0148"