Friday, October 11, 2013

The Government Portion of Wage and Salary Disbursements

I got a file back in June from BEA -- Table 2.1, Personal Income and its Disposition. Lucky thing I got it then. If you try to get it during the government shutdown, you only get a shutdown announcement.

The file contains annual values for 1929-2012. It's one of those spreadsheets where the years go across the page, in a row. So before I could stand to use it, I had to transpose the data, putting the years (and the other categories) in columns. What I'd do without Excel, I do not know.

The largest chunk of Personal Income (or the one they list first, whatever the reason) is "Compensation of employees, received". The largest part of that compensation is "Wage and salary disbursements".

Two sources are identified for wage and salary disbursements: Private industries, and Government. I want to look now at the government portion as a percent of total wage and salary disbursements:

Graph #1: The Government Portion of Wage and Salary Disbursements
BEA Table 2.1, Line 5 as a Percent of Line 3
The first few years show a large and permanent increase, from 10% to around 18% of disbursements. Almost a doubling. Observe the dates: 1929 to 1933. The permanent doubling coincides with the Great Depression.

Since government share never went back down to around 10%, I suppose you could say we never really recovered from the Great Depression. I can't say that, though, because I can't see how things were before 1929.

Soon after, there was another near-doubling, but a brief and temporary one. It reached a sharp peak at 30% of wage and salary disbursements, then dropped even faster than it rose. This spike is related to the Second World War.

When the war ended, the government share fell back from 30% to below 18%. But it never fell back to 10%. I suppose you could say we never really recovered from ...

Consider the increase that occurred after the World War Two spike. The dates of that increase, approximately, are 1949-1974. The increase coincides almost exactly with the period that Dean Baker calls "the golden age of postwar capitalism": 1947-1973.

I thought it odd that the increasing government share of disbursements matched up with two and a half decades of unusually good economic performance. Maybe it isn't. Maybe it isn't odd. But I sure can't tell from here. I have to get from here to the other end of looking at some numbers.

Meanwhile... Happy birthday, Elaine!

// The Excel Spreadsheet from Google Drive, to preview or download. Includes the graph & data, the original BEA sheet, plus my standard three VBA modules.


Gene Hayward said...

Just one thought while I was looking at the spreadsheet (which is terrific). Is there any value at looking at the ratio of Private sector wages relative to Govt sector wages and what that graph might look like? Best I could tell by eyeballing the ratio falls into an average of 4.6 or so. Probably redundant to what you already did. I am excel illiterate and could not figure out how to do it.

Jazzbumpa said...

I see that post WW II rise starts falling off after about '74. When I think about a cost driver that started in the 50's and increased steadily until the mid-70's, the first thing I think of is our Viet Nam misadventure.

Probably not the whole story, but I'll bet it's a chapter or two.

Now - why flatish in the 80's and down in the 90's?

I'll bet the rise in the naughts is Bush's needless, pointless, destructive wars.


The Arthurian said...

Gene -- I did a few graphs comparing public and private wages for this morning's post:

Jazz, World War Two and the Korean war really stand out on the graph, so it makes sense that Viet Nam would influence the trend as well.

Down in the 1990s because of the good years, private sector expansion.