reader John H Criticize the use of average wages as an indicator of representative compensation, and recommend the use of data from the Social Security Administration. The following are several measures taken by SSA, but they were held down by CPI.
figure 1: The average wage index (AWI) (blue), average net salary (brown), and median net salary (green) are all between 1982-84 USD per year; all deflated using CPI. CBO’s estimated AWI for 2020. The light green shade indicates the Obama era.Source: Social Security Administration [1] , [2] Chief Budget Officer, BLS and author calculations.
In particular, how do these series compare to the total average hourly earnings of non-production and supervisory employees (FRED series AHETPi) in the private industry?
figure 2: 1982-84 USD/hour (black, logarithmic scale on the left), the average hourly income of the entire private industry excluding non-production and supervisory employees, and Median net salary (green, right logarithmic scale), 1982-84 USD per year; use CPI to deflate all. The light green shade indicates the Obama era.Source: Social Security Administration [1] , BLS and author calculations.
The correlation (in logarithm) between the two series is 0.90.
Compare 2017M01 with 2009M01, real Average salary (AHETPI) is 3.2% higher, and The median salary is 5.1%.
I hope people will look at the data.
