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T r e n d s in O u t p u t p e r M a n - H o u r
in th e
P r iv a t e E c o n o m y ,
1 9 0 9 -1 9 5 8




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n

r

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Bulletin No. 1249
UNITED STATES DEPARTMENT OF LABOR
James P. Mitchell, Secretary
BUREAU OF LABOR STATISTICS
Ewan Clague, Commissioner







T r e n d s

in

O u tp u t
in

P r iv a te

p e r

M a n -H o u r

th e
E c o n o m y ,

1 9 0 9 -1 9 5 8

Bulletin No. 1249
December 1959
UNITED STATES DEPARTMENT OF LABOR
James P. Mitchell, Secretary
BUREAU OF LABOR STATISTICS
Ewan Clague, Commissioner
For sale b y the Superintendent of Documents, U .S . Governm ent Printing Office, W ashington 2 5 , D .C .

Price 5 0 cents




PREFACE
The e f f i c i e n t use o f la b o r and oth er re s o u rc e s in the p r o d u ctio n o f a
N a tion ’ s goods and s e r v ic e s has lo n g been r e c o g n iz e d as the means t o h ig h er
l e v e l s o f econom ic w e ll-b e in g and n a tio n a l s tr e n g th . T h is r e so u rce use and
i t s consequences e n te r in t o alm ost ev ery f a c e t o f econom ic a c t i v i t y , in c lu d in g
in d u s t r ia l developm ent, p r ic e s t a b i l i t y , econom ic grow th, manpower u t i l i z a t i o n ,
c o s t s o f th e f a c t o r s o f p r o d u c tio n , and in t e r n a t io n a l c o m p e titio n .
The Bureau o f Labor S t a t i s t i c s has in the p a s t prepared measures o f output
p e r man-hour f o r s e le c t e d in d u s t r ie s and f o r m ajor s e c t o r s o f the econom y, such
as a g r ic u lt u r e , m in in g, and m anufacturing. These measures have been u s e fu l in
p r o v id in g d a ta on tren d s in th e s p e c i f i c areas th e y co v e r but have p ro v id e d
o n ly p a r t i a l coverage o f th e economy.
In ord er t o p ro v id e b roa d er measures on a co n tin u in g b a s i s , th e Bureau
has d evelop ed the e stim a te s o f output p er man-hour in th e p r iv a t e economy f o r
th e p ost-W orld War I I p e r io d which are p resen ted in t h is r e p o r t . E stim ates
based on o th e r s o u r c e s , c o v e r in g th e p e r io d p r io r t o 19^7 > are a ls o p r e se n te d .
In a d d it io n t o s e r ie s c o v e r in g th e e n t ir e p r iv a t e economy, d a ta are a ls o
p resen ted f o r th e farm and nonfarm s e c t o r s s e p a r a te ly , and f o r th e m anufacturing
and nonm anufacturing groups w ith in the l a t t e r s e c t o r . Two s e ts o f measures have
been prepared based on d i f f e r e n t man-hour sou rces--B u rea u o f Labor S t a t i s t i c s
and Bureau o f Census la b o r f o r c e d a ta .
T his study was prepared in th e Bureau’ s D iv is io n o f P r o d u c t iv it y and
T e c h n o lo g ic a l Developments under th e g e n e ra l d i r e c t i o n o f Leon G reenberg,
C h ie f, and Jack Alterm an, A s s is ta n t C h ief o f th e D iv is io n , and under the
d ir e c t s u p e rv is io n o f Jerome A. Mark, C h ie f o f th e Branch o f S p e c ia l S t u d ie s .
E liz a b e th Kahn a s s is t e d in the development o f the output p er man-hour measures
and prepared p o r tio n s o f th e appendix t e x t r e la t in g t o th e man-hour m easures.
Eva E. Jacobs prepared p o r tio n s o f the appendix t e x t r e la t in g t o the r e a l
p rod u ct m easures.




CONTENTS

Page

P r e fa c e .............................................................................................................................................
i
I n tr o d u c t io n ..................................................................................................................................
1
Trends in r e a l p rod u ct p e r man-hour .................................................................................
h
In tr o d u c tio n .............................................................................................................................
^
Postwar p eriod^ 19^*7-58
...................................
4
S h ift s betw een s e c t o r s .............................................................................................................
12
Long-term p e r io d ........................................................................................................................
15
T o ta l p r iv a te e c o n o m y .............................................................................................................
l6
M ajor s e c t o r s ..............................................................................................................................
26
Summary.....................................................................................
F a cto rs a f f e c t i n g output p e r man-hour ...............................................................................
31
T echn ology .....................................................................................................................................
31
L e v e l o f in v e s t m e n t .........................................................................
E l e c t r i c energy p e r man-hour ..............................................................................................
37
Growth o f n on p rod u ction w orkers in m anufacturing ................................................
39
R esearch and development .......................................................................................................
k2
Government and e d u c a t i o n ..............................................................
^5
The human f a c t o r s ......................................................................................................................
Output p e r man-hour in r e l a t i o n t o r e a l p rod u ct p e r c a p i t a .............................
U6
APPENDIXES
A.

Methods and sou rces f o r output p e r man-hour e stim a te s ................................... A - l
R eal p rod u ct .................................................................................................................... A - l
T o ta l p r iv a te e c o n o m y ................................................................................................. A - l
M ajor s e c t o r s o f the e c o n o m y .................................................................................. A-8
Labor input ............................................................................................................................A-13
Bureau o f the Census la b o r f o r c e d a t a ..................
A-lU
Bureau o f Labor S t a t i s t i c s employment and hours d a ta ............................. A-17

B.

Comparison o f Census and Bureau o f Labor S t a t i s t i c s man-hour measures
in th e t o t p j. p r iv a t e economy ............................................................................... ..
Employment .........................................................................................................................
Weekly and t o t a l hours ...............................................................................................
Problem s o f u s in g w eekly sample ...........................................................................
A g r ic u ltu r e ......................................................................................................................
N on agricu ltu re ........................................................................................ .......................
Manuf a c t u r i n g .................................................................................................................
N on m a n u fa ctu rin g............................................................................................................

A-2 7
A-27
A-27
A-28
A-29
A-29
A-29
A-29

C.

C om p arab ility o f r e a l p rod u ct andman-hour estim a tes ....................................
T o t a l p r iv a t e e c o n o m y ......... .................................................................................
A g r ic u ltu r e versu s n o n a g r ic u ltu re ................................

A-31
A-31
A-33

D.

L im ita tio n s and q u a lif ic a t io n s o f output p e r man-hour measures ................

A-3^

E.

T e c h n ic a l n ote on lo n g -te rm tre n d s in output

A-37




ii

p e r man-hour ........................

CONTENTS—C ontinued
F.

S e le c te d b ib lio g r a p h y on methods and sou rces o f g r o s s n a t io n a l
p rodu ct estim a tes and r e c e n t s tu d ie s o f n a tio n a l p r o d u c t iv it y . . . . .

Page
A-^5

TABLES
1.
2.
3.
b.

5.
6.
7.
8.
9.
10.
1 1.
1 2.
13.
1*1-.
15.

In dexes o f employment, man-hours, r e a l p r o d u ct, r e a l p rod u ct p e r man­
hour and hours p a id p er d o lla r o f r e a l p r o d u c t, 19**7-58 ...................... ..
In dexes o f la b o r f o r c e , employment, m an-hours, r e a l p rod u ct p er man­
hour and hours worked p er d o lla r o f r e a l p r o d u c t, 1 9 **7 -5 8 ..............
Average annual p ercen t change in r e a l p rod u ct p er man-hour f o r th e
postw ar p e r i o d ........................................................................
Average annual change in r e a l produ ct p er man-hour w ith s e c t o r
p r o p o r tio n s c o n s ta n t, 19*7 -5 8 ...................................................................................
*
R eal p rod u ct p e r man-hour in the p r iv a te economy, a g r ic u lt u r a l and
n o n a g r ic u ltu r a l s e c t o r s , 1909-58 ..............................................................................
Average annual p ercen t change in r e a l produ ct p er man-hour, 1 9 0 9-58.
1958 d e riv e d r a te o f change in output p er man-hour f o r th e p r iv a t e
economy based on v a rio u s lon g -ru n tre n d measures ........................................
Some in d ic a t o r s o f t e c h n o lo g ic a l changes in U nited S ta te s in d u s t r ie s ,
1939 and 19^7-58 ..............................................................................................................
Indexes o f p erson s engaged in p r iv a te in d u stry and s to c k o f f i x e d
c a p it a l p e r p e r so n , 19*1-1 and 19**7-56 ..................................................................
Indexes o f man-hours in p r iv a t e in d u s try and s to c k o f f i x e d c a p it a l
p er man-hour, 19^1 and 19*1-7-56 ............................... ...............................................
Indexes o f t o t a l p r iv a te r e a l p rodu ct and f i x e d c a p it a l p er d o lla r
o f r e a l p r iv a t e p r o d u c t, 19*i-l and 19*-7 -5 6 .......................................................
1
E le c t r i c energy (KWH) consumed p er p r o d u ctio n worker man-hour,
s e le c t e d y e a r s , 1 9 2 9 -5 7 ..............................................................................................
M anufacturing r e a l p rodu ct p e r man-hour, 19*1-7-57 ........................................
Change in number and o c c u p a tio n a l d is t r ib u t io n o f nonproduction
workers in m anufacturing in d u s tr ie s , s e le c te d p e r io d s, 19 5 2 -5 7 .................
Average annual p ercen t change in r e a l p r o d u c t, r e a l p rodu ct p er
c a p it a , employed p o p u la tio n , m an-hours, and r e a l p rodu ct p er man-hour,
19^7-58 .....................................................................................................................................

5
6
7
13
17
21
2k

32
31
*35
35
38
*lO

*1-3
kj

CHARTS
1.
2.

3*
*1
-.

Indexes o f r e a l p rod u ct p er man-hour in the t o t a l p r iv a te economy,
1911.7 -5 8 ......................................................................................................................................
Indexes o f r e a l p rod u ct p er man-hour in th e t o t a l p r iv a t e economy,
a g r ic u lt u r a l, n o n a g r ic u lt u r a l, m anufacturing, and nonm anufacturing
s e c t o r s , 19*- -5 8 ..................................................................................................................
1
7
Indexes o f r e a l p rod u ct p er man-hour in the t o t a l p r iv a t e economy,
a g r ic u lt u r a l, and n o n a g r ic u ltu r a l s e c t o r s , 19*1-7-58 ........................................
Indexes o f r e a l produ ct p er man-hour in the t o t a l p r iv a t e economy,
a g r ic u lt u r e , and n o n a g r ic u ltu r e , 19 09-58 ..............................................................




iii

8

10
11
19

CONTENTS--Continued

Page

CHARTS
5.

In dexes o f r e a l p rod u ct p e r man-hour in the t o t a l p r iv a t e economy,
a g r ic u lt u r e , and n o n a g r ic u ltu r e , 19 0 9 -5 8 ....................................... .............

20

APPENDIX TABLES
A -l.
A- 2 .
A-3•
A-h.

E -l.

Employment, m an-hours, r e a l p r o d u c t, r e a l p rod u ct p e r man-hour, and
hours p a id p er d o l l a r o f r e a l p r o d u ct, 19^7-58 ............................. ............ A-19
Labor f o r c e , employment, m an-hours, r e a l p rod u ct p e r man-hour and
hours worked p er d o l l a r o f r e a l p r o d u ct, 1 9 ^ 7 - 5 8 ............... . . . . .............A-22
N a tion a l income and p rod u ct a cco u n t, 1957 ............................... ..................... A-25
G ross n a tio n a l p rod u ct and m ajor components in cu rren t and con sta n t
d o l l a r s , and i m p lic it p r ic e d e f l a t o r s , 195^ and 1957 ......... ................... A-2 6
L in ear and c u r v ilin e a r equ a tion s o f tren d s in output p er man-hour,
19 09 -58 ............................................................................................................................... A-39
APPENDIX CHARTS

E -l.
E -2 .
E -3 .
E-^i-.

In dexes
hour in
In dexes
hour in
In dexes
hour in
Indexes
hour in




and
th e
and
the
and
th e
and
th e

lin e a r and p a r a b o lic tre n d s o f r e e l p rod u ct p er man­
t o t a l p r iv a t e economy, 1909-58 (Census man-hour d a t a ) .. A-Ul
lin e a r and h y p e r b o lic tren d s o f r e a l p rod u ct p e r man­
t o t a l p r iv a t e economy, 1909-58 (Census man-hour d a t a ) . . A -h 2
lin e a r and h y p e r b o lic tren d s o f r e a l p rod u ct p e r man­
t o t a l p r iv a t e economy, 1909-58 (BIS man-hour d a t a ) . . . . . A-^3
lin e a r and p a r a b o lic tren d s o f r e a l p rod u ct p e r man­
t o t a l p r iv a t e economy, 1909-58 (BIS man-hour d a t a ) ......... A - k b

TRENDS IN OUTPUT PER MAN-HOUR IN THE
PRIVATE ECONOMY, 1909-58

In tr o d u c tio n
Output p er man-hour, o f v i t a l im portance t o th e N a tion ’ s econom ic s tr e n g th ,
has been th e o b je c t o f co n tin u in g w idespread a t t e n t io n . However, the fo c u s o f
t h i s a t t e n t io n has v a r ie d from tim e t o tim e , depending upon econom ic c o n d it io n s .
During p e r io d s o f d e p re s s io n and r e c e s s io n , emphasis has been p la c e d on th e
r e la t io n s h ip o f output p er man-hour t o employment and unemployment. During
in f la t io n a r y p e r io d s , prim ary in t e r e s t has c e n te re d on th e problem o f o f f s e t t i n g
r i s i n g c o s t s and thus prom oting p r ic e s t a b i l i t y .
In t h i s r e p o r t , output p er man-hour r e f e r s s p e c i f i c a l l y t o th e con sta n t
d o lla r va lu e o f goods and s e r v ic e s produced in r e la t io n t o the hours o f a l l
p erson s employed (in c lu d in g p r o p r ie t o r s and unpaid fa m ily w o rk e r s ), and i s d e ­
sig n a ted in the accompanying t a b le s as " r e a l p rod u ct p er m an-hour." T h is kind
o f measure i s r e le v a n t t o problem s o f manpower u t i l i z a t i o n , employment, unem­
ploym ent, la b o r c o s t s , l e v e l s o f l i v i n g , and o th e r elem ents in econom ic grow th.
Although the measure r e la t e s output t o m an-hours, i t should n ot be i n t e r ­
p r e te d t o rep resen t th e unique c o n t r ib u t io n o f la b o r t o p r o d u c tio n . Rather the
measure r e f l e c t s , in a d d itio n t o la b o r e f f o r t and s k i l l , the o p e r a tio n o f many
f a c t o r s , such as changes in te c h n o lo g y , equipm ent, and oth er c a p it a l investm ent
p er w ork er, u t i l i z a t i o n o f c a p a c it y , la y ou t and flo w o f m a t e r ia ls , m anagerial
s k i l l , and labor-management r e l a t i o n s . Thus, g a in s in output p er man-hour
cannot be a s c r ib e d t o any one f a c t o r , but r e f l e c t th e in t e r a c t io n o f a l l f a c t o r s .
This r e p o r t p re se n ts in d exes and average r a te s o f change in output p er man­
hour f o r the p r iv a t e economy, a g r ic u lt u r e , and n o n a g ricu ltu re f o r the p o s t W orld War I I p e r i o d ,1 9 ^ 7 -5 8 ,and f o r the lon g -term p e r io d 190 9-58. 1 / E stim ates
are a ls o p resen ted f o r m anufacturing and nonm anufacturing f o r th e p e r io d 19^7 - 5 7 •
The in d exes o f output p er man-hour are d e r iv e d from estim a tes o f r e a l
p rod u ct and o f m an-hours. The r e a l p rodu ct estim a tes r e p r e s e n t, as in d ic a t e d
e a r l i e r , th e con sta n t d o l l a r va lu e o f goods and s e r v ic e s produced in th e

l/
At p resen t th e r e i s no s a t i s f a c t o r y method o f m easuring many o f the
goods and s e r v ic e s produced b y th e government s e c t o r o f the economy which i s
ex clu d ed from th ese in d e x e s . However, f o r pu rp oses o f t h i s s tu d y , government
e n t e r p r is e s , such as th e P ost O f f i c e , TVA, and l o c a l t r a n s it system s, whose
m ajor a c t i v i t i e s in v o lv e the s a le o f a p rodu ct o r s e r v i c e , are combined w ith
th e p r iv a t e s e c t o r .




2

p r iv a t e economy. They in c lu d e th e u n d u p lica ted va lu e o f th e s u c c e s s iv e sta g es
o f e x t r a c t io n , p r o c e s s in g , and d i s t r i b u t i o n . Data on r e a l p rod u ct f o r th e
t o t a l p r iv a t e economy and th e a g r ic u lt u r a l and n o n a g r ic u ltu r a l s e c t o r s are
com piled b y th e U .S. Department o f Commerce, O f f ic e o f B u sin ess E conom ics;
f o r m anufacturing, the estim a te s o f r e a l p rod u ct have been d evelop ed b y the
U .S . Department o f L a bor, Bureau o f Labor S t a t i s t i c s , based on data from the
Bureau o f the Census and o th e r s o u r c e s .
S in ce th ere are two m ajor s o u rce s o f d ata on employment and w eekly homes
which can be used t o d e r iv e a measure o f man-hours f o r th e t o t a l economy, two
s e t s o f e stim a te s have been d evelop ed f o r t h i s r e p o r t — one based on data from
th e Bureau o f the Census, 2 / th e o th e r based p r im a r ily on d ata from th e Bureau
o f Labor S t a t i s t i c s , supplemented b y oth er s o u r c e s .
In c o n c e p t, th e e s tim a te s based on Bureau o f th e Census la b o r f o r c e d ata
are d e fin e d as output p e r hour w orked. The la b o r f o r c e m easure, how ever, does
n o t attem pt t o exclu d e s ill nonworked hours such as r e s t p e r io d s and standby
tim e . The e s tim a te s b ased p r im a r ily on BIS d a ta are d e fin e d as output p er
hour p a id , but th e y do n ot in c lu d e such tim e as s ic k le a v e compensated f o r
tinder insurance program s. T h e o r e t ic a lly , th e d if f e r e n c e s between th e two
m easures, as used in t h i s stu d y , re p re se n t th e change in th e p r o p o r t io n o f
hours f o r p a id v a ca tio n s and p a id s ic k le a v e t o t o t a l p a id h ou rs.
A c tu a l d if f e r e n c e s between th ese two s e t s o f measures are th e r e s u lt o f
d if f e r e n c e s in s t a t i s t i c a l m ethodology and r e p o r t in g as w e ll as d iff e r e n c e s
in c o n c e p t. F or exam ple, th e estim a te s b ased on th e Census d a ta are from
sample su rveys o f h ou se h o ld s, whereas th e BLS data are ob ta in ed from r e p o r ts
o f e s ta b lish m e n ts .
The man-hours are th e sum o f man-hours worked ( o r p a id ) o f a l l p erson s
engaged in th e v a r io u s s e c t o r s o f th e p r iv a t e economy. Ho d i s t i n c t i o n i s made
betw een groups w ith d i f f e r e n t l e v e l s o f s k i l l o r r a t e s o f p a y.
In e v a lu a tin g and u s in g th e output p er man-hour measures g iv e n in t h i s
r e p o r t , c e r t a in q u a l i f i c a t i o n s should be kept in mind. 3/ F i r s t , th e output
and man-hour d a ta p ro v id e o n ly p a r t i a l coverage f o r some in d u s t r ie s o r c a t e ­
g o r i e s , thus r e q u ir in g im putations o f one s o r t o r a n oth er. Second, e x is t in g
d a ta and tech n iq u es do not f u l l y account f o r changes in q u a lit y o f goods and

2 / As o f J u ly 1959 th e r e s p o n s i b i l i t y f o r th e la b o r f o r c e e s tim a te s was
t r a n s fe r r e d from th e Bureau o f th e Census t o th e Bureau o f Labor S t a t i s t i c s ,
although th e Bureau o f th e Census con tin u es t o c o l l e c t th e b a s ic d a ta .
3 / The q u a l i f i c a t i o n s and lim it a t io n s are d is c u s s e d more f u l l y in th e
appendix. See p p . A -3 ^ -3 6 .




3

s e r v i c e s
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e s t im

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o f

p r o b le m s

l a b o r

w e ig h t s

n e c e s s a r i l y
t o

t h e

g e n e r a l




fr o m

a r e

e c o n o m ic

y e a r - t o - y e a r

a c c u r a c y

s u c h .

o u t p u t
o t h e r

d i f f e r i n g

n o t

t h e r e

a n d

y e a r

S i x t h ,

t h e r e f o r e ,
te r m

a t in g

m e a s u r e s

c o n s i d e r a b l e

T h ir d ,

t h e r e

in d u s ­

p r i v a t e
i r r e g u l a r

i l a r l y ,
a n y

a n d ,

l o n g ­

p a r t i c u l a r

f u t u r e .

i t a t i o n s ,

in s t r u m

t h e

e n t s .

p r o d u c t i v i t y

m e a s u r e s
I n s t e a d ,

m o v e m e n ts

c a n n o t
t h e y

a n d

b e

c o n s id e r e d

s h o u ld

s h o u ld

b e

b e

c o n ­

u s e d

a s

k

TREN DS

IN

R E A L

PRODU CT

PE R

M A N -H O U R

I n t r o d u c t io n

O v e r
t e n d

t o

t h e

C h a n g e s

in

i n

o r

p h a s is

i s

o p e d

b y
f o r

l a b o r

i t s

o n

t h e

fr o m

p u r p o s e s

T h e

p e r

h a v e

v a r y in g

C e n s u s

I t

in
t h e

i s

p a id

-

58,

t im e
t h e

p a r t

f o r

T h e y

o f

t h e

p e r

a n d

i n f l u e n c e d

m ay

t h e

y e a r

>

b e

o f

e s t im

1 9 ^ 7

t o

f o r

a r e

i s

a t e s
t h e

t r e n d s ,
a l s o

b y

a f f e c t e d

c a p a c i t y ,

e c o n o m y

m a n -h o u r

L o n g -t e r m

190 9- ^ 7

f a c t o r s

m a n - h o u r ’.

b y
a n d

a n o t h e r .

t h e

n o n a g r i c u l t u r e .

w h ic h

(T h e

p e r i o d

h e a v i l y

u t i l i z a t i o n

o u t p u t

s e r i e s . )

o f

a r e

in t e n d e d

p a s t

p e r i o d s .

p a s t

r a t e s

o n

f u t u r e

E c o n o m y .

o n

B u re a u

fr o m

( t a b l e

t o

c h a n g e

a f f e c t e d

p r i v a t e

M a jo r
w e r e

f i r s t
b a s e d

p o s t w a r
o n

p r e s e n t e d

em ­

d e v e l ­

e s t i ­

f o r

t o

T h e

o f

d e s c r ib e

f a c t o r s

c h a n g e ,

p r o d u c t i v i t y

c a n

t h e

n a t u r e

a lr e a d y
a l s o

b e

o f

g r o w th

m e n t io n e d ,
e x p e c t e d

p lu s

t o

g r o w t h .

t h e

b e

m e a s u r e s

T o t a l
o f

b a s e

f o r

p r i v a t e

L a b o r

r e a l

S t a t i s t i c s

p e r i o d

t h e

p r o d u c t

t o

e n t i r e

1 9 5 8

19 ^ 7 -5 8

p e r i o d

p e r

m a n -h o u r s ,

m a n -h o u r

3 9

( t a b l e s
w e r e

in c r e a s e d

p e r c e n t
1

3 * 1

a n d
a n d

b a s e d
2 ) .

3 -5

o n

T h e
p e r c e n t ,

3 )•

e x p e c t e d

in c r e a s e

v a c a t io n s

tw o

i n

f o r

a n n u a l in c r e a s e s

w o u ld

o n e

a g r i c u lt u r e

19 ^ 7

b e

p e r

1 9 ^ 7 -5 8

m a n -h o u r s

a v e r a g e

fr o m

S t a t i s t i c s .

f o r

i n f l u e n c e

b a s e d

r e s p e c t i v e l y

p a id

r a t e s

P r iv a t e

p e r c e n t

L a b o r

a l s o

o u t p u t

p r o s p e r i t y .

p r o d u c t i o n ,

t r e n d s

p e r i o d

s o u r c e s

h a v e

P e r i o d ,

T o t a l
3 5

t h e

e c o n o m ic

m a n -h o u r

w h ic h

P o s t w a r

o u t p u t

m ay

o r

i n s t i t u t i o n a l

in

c o m p a r is o n .

o t h e r s
a

o f

o t h e r

a v e r a g e

o u t p u t

o r

o f

c o m p o n e n t s ,

p o s t w a r

o t h e r

o f

f o r c e

v o lu m e

a n d

i n c r e a s e s

h o w e v e r ,

r e c e s s i o n

d e s c r ib e s

B u r e a u

m a n y

in

t e c h n o l o g i c a l

c u m u la t iv e

m a n -h o u r ,

m a jo r

t h e

f o r

p e a c e ,

c h a n g e s

s e c t i o n

a n d

y e a r
m a te s

a s

t h e

T h is
e c o n o m y

i n

p e r

w a r

u n d e r ly in g

b a s i s

o u t p u t

f a c t o r s

s h i f t s

r u n ,

t h e

o f

c o n d i t io n s
s u c h

lo n g

p r o v id e

l e s s

a n d
a r e

t h a t
t h a n

s i c k
d u e

o u t p u t
t h o s e

l e a v e .

t o

p e r

b a s e d

m a n -h o u r

m e a s u r e s

o n

w o r k e d ,

H o w e v e r ,

r e p o r t i n g ,

h o u r s
som e

e s t im

o f

a t i n g ,

t h e
a n d

b a s e d

o n

b e c a u s e

d i f f e r e n c e s
o t h e r

h o u r s

o f

i n c r e a s e s

b e t w e e n

s t a t i s t i c a l

f a c t o r s .

bj

T h e

n a t i o n a l
5 /
r it h m s
t a k e s
f o r

T h e
o f

t h e

p r o d u c t
in

19 5^

a v e r a g e s

t h e

i n t o

a l l

r e a l

p r o d u c t

in d e x

a c c o u n t

a r e

c o m p u te d

n u m b e r s .
o n ly

y e a r - t o - y e a r




( o u t p u t )

p a r t

o f

t h e

fr o m

t h e

e s t im

a t e s

i s

p r i v a t e

g r o s s

p r i c e s .

t h e

I n
t e r m

c h a n g e s

c o n t r a s t
in a l

t o

y e a r s ,

d u r in g

t h e

l e a s t
t h e
t h e

s q u a r e s
co m p o u n d

l e a s t

p e r i o d

t r e n d

o f

i n t e r e s t

s q u a r e s

c o v e r e d ,

t h e

l o g a ­

r a t e ,

p r o c e d u r e

1 9 ^ 7 -5 8 .

w h ic h
a c c o u n t s

Table !•

Indexes o f employment, man—
hours, r e a l p rod u ct, r e a l product p e r man-hour and hours paid p er d o lla r o f
re a l p rod u ct, 1947-68

Item
1.
2.
3.
4.
5.

(Man-hour estim ates based p rim a rily on Bureau o f Labor S ta tis tic s data)
____________ _______ ________
(1947—
49gl00)
_______ _______ ____________
1951
1954
1950
1953
1955
1948
1949
1947
1952

Employment:
T ota l p r iv a te ••••••••••••*••• 99.9
A g ricu ltu re •............................. 101.7
Nona g ricu lt u ral in d u stries
99.5
M anufacturing*. •••* *........ 102.4
Nonmanufacturing* •••••••• 98.2

6.
7.
8.
9.
10 .

Average weekly h ou rs:
T o ta l p r iv a te •* * •••••••••• •••
A gricu ltu re .........................
N on agricu ltu ral in d u stries
M anufacturing.........* ......... ..
Nonmanufacturing* •**•••••

11.
12.
13.
14.
15.

101.1
98.6

9 9.0

101.6

98.9
95.0
100.7

102.6
101.1

100.9 100.2
101.0 100.4
100.7 100.2

99.7

99.1

1956

1957

1958

100.9
93.8
102.1
100.3
103.0

104.5
88.5
107.4
107.9
107.2

105.6
8 5.4
109.2
109.4
109.1

107.1
7 8.6
112.2
115.4
110.7

104.4
77*8
109.2
107.1
110.2

108.5
80.5
113.5
110.8
114.8

111.3
7 8 .8
117.1
113.1
119.1

111.0
7 4.6
117.6
112.2
120.1

107.1
7 0 .0
113.7
103.5
118.5

9 9.1
9 7 .2
99.5
101.2
98.6

98.8
9 8 .2
99.5
101.5
98.3

98.6
9 7.2
99.5
101.8
98.3

9 8.1
98.4
98.8
101.2
97.8

9 7.2
96.6
98.1
99.8
9 7.4

97.6
9 5.2
98.8
101.5
9 7.4

96.9
9 3 .2
98.3
101.0
97.1

95*5
91.0
97.3
99.8
96.2

94.8
9 0.2
9 6.4
98.8
95.2

101.0
100.7

100.5
100.0

98.6
99.0
98.8
99.0

Annual h ou rs:
T otal p r iv a te * .................
A g r ic u ltu r e .••••••.**••*»*•
N on agricu ltu ral in d u stries
M anufacturing*............. . *•
Nonmanufacturing ••••••••

100.8
102.7
100.4
103.4
98.9

101.3
99.0
101.8
102.9
101.3

97.9
98.3
97.8
93.6
99.7

99.8
91.2
101.6
101.5
101.7

103.3
86.9
106.8
109.5
105.6

104.1
83.0
108.6
111.1
107.5

104.9
77.3
110.9
116.7
108.3

101.4
7 5 .2
107.1
106.6
107.3

105.8
76.6
112.1
112.5
111.9

107.8
7 3 .4
115.2
114.1
115.8

106.1
67.9
114.4
112.0
115.5

101.4
63.2
109.7
102.1
113.1

16.
17.
18.
19.
20.

Gross n a tion a l p rod u ct:
T ota l p r iv a te ...............................
A g ricu ltu re...............................
N on agricu ltu ral in d u stries
M anufacturing................. .. •
Nonmanuf acturing» ••••••••

97.5
92.9
97.9
100.9
96.2

101.5
106.0
101.2
103.0
100.2

100.9
100.5
101.0
96.0
103.6

110.2
106.0
110.5
111.1
110.2

116.9
99.5
118.1
121.8
116.2

120.4
103*3
121.6
125.5
119.6

126.3
107.1
127.7
138.1
122.2

124.3
111.5
125.2
125.1
125.2

135.4
117.4
136.7
141.3
134.3

138.3
114.8
140.0
145.0
137.4

140.9
113.2
142.9
143.0
143.0

137.3
119.2
138.6

21.
22.
23.
24.
25.

R eal produot per man-hour:
T otal p r iv a t e ..............................
A g ricu ltu re * ............................
N on agricu ltu ral in d u stries
M anufacturing............... ••
Nonmanufacturing* • * ..• ..*

96.7
90.5
97.5
97.6
97.3

100.2
107.1
9 9 .4
100.1
98.9

103.1
102.2
103.3
102.6
103.9

110.4
116.2
108.8
109.5
108.4

113.2
114.5
110.6
111.2

120.4
138.6
115.1
118.3
112*8

122.6
148.3
116.9
117.4
116.7

128.0
153.5
121.9
125.6
120.0

128.3
156.4
121.5
127.1
118.7

132.8
166.7
124.9
127.7
123.8

135.4
188.6
126.3

110*0

115.7
124.5
112.0
113.0
111.3

26.
27.
28.
29.
30.

Hours paid per d o lla r o f re a l
p rod u ct:
T ota l p riv a te * * ................
A g r ic u lt u r e * .* .......................
N on agricu ltu ral in d u stries
M anufacturing...................
Honmamrfactu rin g:................

103.4
110.5
102.6
102.5
102.8

99.8
93.4
100.6
99.9
101.1

97.0
97.8
96.8
97.5
96*2

90.6
86.0
91.9
9 1 .4
92.3

8 8.4
87.3
9 0.4
89.9
90.9

86.5
80*3
89.3
88.5
89.9

83.1
7 2 .2
86.8
84.5
88.6

81.6
67.4
85.5
85.2
85.7

7 8.1
65.1
82.0
7 9.6
83.3

7 7 .9
63.9
82.3
78*7
84.3

75.3
60.0
80.1
78.3
80.8

7 3.9
53.0
79.1

l/

Not a v a ila b le •
S ou rce: Table A - l ,




(p . JUig)*

w

w ),

( 1 /)

Table 2 .

Indexes o f la b o r fo r o e , employment, man-hours, r e a l product p e r man-hour and hours worked per d o lla r o f
r e a l p rod u ct, 1947-58
(Man-hour estim ates based p rim arily on Bureau o f th e Census Labor Force data)
(1947— 100)
49*
1947

1.
2.
3.
4.
5.
6.
7.
8.
9.

T otal la b o r fo r c e ....................
Armed F orces•............................
C iv ilia n la b o r fo r c e .............
Unemployed,••••«••••*.»«••
Employed...................................
Government c iv ilia n g en eral.............................
T ota l p r iv a te .....................
A g ricu ltu re .....................
N onagricultural
in d u s trie s ••••••••••

1948

1949

1950

1951

1952

1953

1954

1955

1956

1957

1958

98.3
102.3
98.2
84.5
98.9

100.2
93,7
100.3
83,4
101,1

101.5
104.0
101.5
132.1
100.0

103.2
106.2
103.1
120.2
102.3

105.2
199.4
102.8
75.3
104.1

106.1
231.3
102.9
69.3
104.5

106.8
228.2
103.8
67.1
105.5

107.5
215.6
104.8
128.3
103.7

109.3
196.1
107.1
104.2
107.2

111.6
183.8
109.8
101.2
110.2

112.2
180.0
110.5
105.3
110.7

113.0
169.7
111.6
167.9
108.9

96.6
99.1
101.7

99.9
101.3
96.6

103,5
99.7
99.7

106.5
101.9
93.8

113.8
103.2
88.5

117.6
103.3
8 5 .4

118.6
104.2
78.6

120.3
102.1
77.8

125.0
105.5
80.5

130.7
108.2
7 8 .8

135.0
108.4
7 4 .6

139.7
106.0
70.0

98.6

101.7

99.7

103.4

105.9

106.6

109.0

106.6

110.1

113.7

114.6

112.6

10.
11.
12.

Average weekly hours:
T otal p riv a te ••««#..»•••••••
A g ricu ltu re ..................... ......
N onagricultural in d u strie s

101,0
100,7
100,9

100.1
100.1
100.2

98.9
9 9 .2
98.9

97.9
97.4
98.4

9 8 .4
98.6
9 8.9

98.2
9 7 .4
98.7

97.7
98.8
9 8.4

95.8
97.0
96.5

96.5
95.5
97.5

95.5
93.5
96.7

94.3
9 1 .0
95.7

93 .2
90.0
94.5

13.
14.
15.

Annual hours:
T ota l p r iv a te .............................
A g ricu ltu re .............................
N on agricu ltu ral in d u stries

100,1
102.5
99.5

101.2
98.6
101.8

98.7
98.9
98.6

99.9
91.3
101.8

101.5
87.2
104.7

101.3
83.3
105.3

101.9
7 7 .6
107.3

9 7.9
7 5 .4
102.8

101.7
7 6 .9
107.2

103.5
73.7
110.1

102.2
6 7.8
109.8

98.7
63.0
106.5

16.
17.
18.

Gross n a tion a l product
(1954 d o lla r s ;:
T ota l p r iv a te ••........................
A g ricu ltu re .............................
N onagricultural in d u stries

97,5
92,9
97.9

101.5
106.0
101.2

100.9
100.5
101.0

110.2
106.0
110.5

116.9
99.5
118.1

120.4
103.3
121.6

126.3
107.1
127.7

124.3
111.5
125.2

135.4
117.6
136.7

138.3
114.8
140.0

140.9
113.2
142.9

137.3
119.2
138.6

19.
2 0.
21.

Real product per man-hour:
T otal p r iv a te .............................
A g r ic u lt u r e ....................
N on agricu ltu ral in d u stries

97,4
90,6
98,4

100.3
107.5
99.4

102.2
101.6
102.4

110.3
116.1
108.5

115.2
114.1
112.8

118.9
124.0
125.5

123.9
138.0
119.0

127.0
147.9
121.8

133.1
152.9
127.5

133.6
355.8
127.2

137.9
167.0
130.1

139.1
189.2
330.1

22.
23.
24.

Hours worked p er d o lla r o f
r e a l p rod u ct:
T otal p r iv a t e ................
A g ricu ltu re * .........................
N on agricu ltu ral in d u stries

102,7
110,3
101,6

99.7
93.0
100.6

97.8
9 8 .4
97.6

90.7
86.1
92.1

8 6.8
87.6
88.7

8 4.1
80.6
8 6 .6

80.7
72.5
84.0

7 8 .8
67.6
8 2.1

7 5 .1
6 5 .4
7 8 .4

7 4 .8
6 4 .2
7 8 .6

7 2 .5
5 9.9
7 6 .8

71.9
5 2.9
7 6 .8

Source:




Table A^2j (p* A-22)

7

T a b le

3*

A v e r a g e

a n n u a l

p e r c e n t

c h a n g e

p o s t w a r

i n

r e a l

p e r i o d

p r o d u c t

A v e r a g e

S e c t o r

a n d

p e r

m a n -h o u r

f o r

t h e

1 /

a n n u a l

B a s e d

p e r i o d

p r i m

m a n -h o u r
B IS

p e r c e n t
a r i l y

d a t a

c h a n g e

o n

fr o m

2 /

—

C e n s u s

3 /

19 4 7- 58:
T o t a l

p r i v a t e

.....................................................................

A g r i c u l t u r e

3 -5

6 .2

6 .2

.........................................................

N o n a g r ic u lt u r e

3 - 1

.........................................................................

4 /

2 .4

2 .9

1 9 ^ 7 -5 7 :
N o n a g r ic u lt u r e

............................................................................

l /

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2 .9

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M ost p r e v i o u s l y p u b l i s h e d e s t i m a t e s o f m a n u fa c tu r in g o u tp u t p e r m ark-hour h a v e
d e a l t w i t h o u tp u t p e r m a n -h o u r o f p r o d u c t io n w o r k e r s . B e c a u s e o f t h e c o n t i n ­
u in g i n t e r e s t i n t h e em p lo y m en t a n d a v e r a g e h o u r s a n d e a r n in g s o f p r o d u c t io n
w o r k e r s , m ore d a t a a r e a v a i l a b l e f o r t h i s g r o u p t h a n f o r n o n p r o d u c tio n
w o r k e r s . j J T h e a v e r a g e a n n u a l i n c r e a s e f o r p r o d u c t io n w o r k e r o u tp u t p e r m an­
h o u r i n m a n u fa c tu r in g ( 19 ^ 7 - 5 7 ) w a s a b o u t 3 * 7 p e r c e n t a y e a r , n e a r l y 1 p e r c e n t
h ig h e r t h a n t h a t f o r a l l p e r s o n s e m p lo y e d i n m a n u fa c tu r in g . T h is d i f f e r e n c e ,
w h ic h i s g r o w in g , a r i s e s b e c a u s e o f t h e g r e a t e r i n c r e a s e i n em p lo y m en t o f
n o n p r o d u c tio n w o r k e r s i n r e l a t i o n t o p r o d u c t io n w o r k e r s . ( S e e s e c t i o n o n
F a c t o r s A f f e c t i n g O u tp u t p e r M a n -H o u r.)
I n t h e n o n m a n u fa c tu r in g i n d u s t r i e s , o u tp u t p e r m a n -h o u r o f a l l p e r s o n s ,
b a s e d p r im a r i l y o n BLS h o u r s , r o s e a b o u t 2k p e r c e n t fr o m t h e 1 9 ^ 7 -^ 9 a v e r a g e
t o 1 9 5 7 * T he a v e r a g e ann ua l i n c r e a s e w a s 2 . 3 p e r c e n t f o r t h e p e r io d 1 9 ^ 7 -5 7 •
T h is r a t e o f i n c r e a s e i s som ew h at l e s s t h a n t h a t f o r m a n u f a c t u r in g . H o w e v e r ,
t h e n o n m a n u fa c tu r in g s e c t o r r e p r e s e n t s a h e t e r o g e n e o u s g r o u p o f i n d u s t r i e s
i n c l u d i n g m in in g , t r a n s p o r t a t i o n , c o n s t r u c t i o n , a n d p u b l i c u t i l i t i e s , a s w e l l
a s t r a d e a n d s e r v i c e s . S e v e r a l r e s e a r c h s t u d i e s i n d i c a t e t h a t som e o f t h e s e
h a v e e x p e r ie n c e d s u b s t a n t i a l o u tp u t p e r m a n -h o u r g a i n s , 8 / w h i l e o t h e r s h a v e
sh ow n v e r y l i t t l e c h a n g e .
S h i f t s B e tw e e n S e c t o r s
O v e r a l l c h a n g e s i n o u tp u t p e r m a n -h o u r r e f l e c t b o t h c h a n g e s i n o u tp u t p e r
m a n -h o u r o f co m p o n en t s e c t o r s , i n d u s t r i e s , e t c . , a n d c h a n g e s ( s h i f t s ) i n t h e
r e l a t i v e im p o r ta n c e o f c o m p o n e n ts w i t h d i f f e r e n t l e v e l s o f o u tp u t p e r m a n -h o u r .
S h i f t s c a n r e f l e c t e i t h e r c h a n g e s i n t h e la b o r f o r c e "m ix” o r c h a n g e s i n t h e
p r o d u c t " m ix ." F o r e x a m p le , t h e s h i f t o f m anpow er fro m t h e a g r i c u l t u r a l
s e c to r t o th e n o n a g r ic u ltu r a l s e c t o r s h a s th e f o llo w in g e f f e c t : F or e v e r y
g iv e n m a n -h o u r , a g r e a t e r v a lu e o f o u tp u t c a n b e p r o d u c e d i n n o n a g r ic u l t u r e
t h a n i n a g r i c u l t u r e . T h e r e f o r e , i f m a n -h o u r s a r e s h i f t e d fr o m a g r i c u l t u r e t o
n o n a g r i c u l t u r e , t h e t o t a l v a lu e o f o u tp u t w i l l i n c r e a s e , t h u s y i e l d i n g a g a in
i n o u tp u t p e r m a n -h o u r. I n t h e c a s e o f t h e o u tp u t s h i f t , f o r e v e r y g iv e n
d o l l a r o f o u tp u t fe w e r m a n -h o u r s a r e r e q u ir e d i n t h e n o n a g r i c u l t u r a l s e c t o r
t h a n i n t h e a g r i c u l t u r a l s e c t o r . T h e r e f o r e , i f o u tp u t i s s h i f t e d fr o m
a g r i c u l t u r e t o n o n a g r i c u l t u r e , t h e r e i s a d e c r e a s e i n t h e m a n -h o u r s r e q u ir e d
p e r u n i t o f t o t a l o u t p u t , w h ic h i s e q u i v a l e n t t o a n i n c r e a s e i n o u tp u t p e r
m a n -h o u r . I t s h o u ld a l s o b e n o t e d t h a t o u tp u t p e r m a n -h o u r o f i n d i v i d u a l
i n d u s t r i e s a n d s e c t o r s c a n a l s o b e a f f e c t e d b y s h i f t s o f m a r g in a l w o r k e r s o r
p r o d u c t iv e u n i t s i n t o o r o u t o f t h e s e c t o r o r i n d u s t r y , e . g . , e f f e c t o f t h e
r e d u c t io n i n m a r g in a l fa r m s o n o u tp u t p e r m a n -h o u r o f t h e a g r i c u l t u r a l s e c t o r .

7 / F o r d e f i n i t i o n s o f p r o d u c t io n a n d n o n p r o d u c tia n w o r k e r s , s e e p . 3 9 .
5 / S e e E s t im a t e s o f B e a l P r o d u c t i n t h e U n it e d S t a t e s b y I n d u s t r i a l
S e c t o r , 1 9 ^ 7 -5 5 # b y J a c k A lte r m a n a n d E v a J a c o b s , p r e s e n t e d a t t h e C o n fe r e n c e
o n R e s e a r c h i n In co m e a n d W e a lth , New Y o r k , N . Y . , O c to b e r 1 9 5 8 .




S h if t s can o ccu r a t a l l l e v e l s in th e econ om y, in c lu d in g o c c u p a tio n s ,
p r o d u c t s , p l a n t s , i n d u s t r i e s , i n d u s t r y g r o u p s , a n d m a jo r s e c t o r s . I n o r d e r
t o e x a m in e t h e m o v em en ts o f o u tp u t p e r m a n -h o u r e x c l u d in g t h e e f f e c t o f s h i f t s ,
t h e p r o c e d u r e e m p lo y e d i s t o h o ld c o n s t a n t t h e o u tp u t o r m a n -h o u r s o f t h e s e
c o m p o n e n ts , a s o f a p a r t i c u l a r y e a r , s u c h a s 1 9 ^ 7 o r 1 9 5 8 * H o w ev er , t h e
e x t e n t t o w h ic h t h e e f f e c t o f t h e v a r io u s c a t e g o r i e s o f s h i f t s c a n b e e x c lu d e d
fro m t h e o v e r a l l m ea su re o f o u tp u t p e r m a n -h o u r i s l i m i t e d b y t h e a v a i l a b i l i t y
o f d a ta .
E s t im a t e s h a v e b e e n d e v e lo p e d f o r t h e p o s tw a r p e r io d e x c l u d in g t h e e f f e c t
o f s h i f t s b e tw e e n t h e a g r i c u l t u r a l an d t o t a l n o n a g r ic u l t u r a l s e c t o r s o n o u tp u t
p e r m a n -h o u r o f t h e t o t a l p r i v a t e eco n o m y . T h e s e e s t i m a t e s i n d i c a t e t h a t , f o r
t h e p o s tw a r p e r i o d , e l i m i n a t i o n o f o u tp u t s h i f t s b e tw e e n a g r i c u l t u r e an d n o n ­
a g r i c u l t u r e r e d u c e s t h e a v e r a g e a n n u a l c h a n g e o f o u tp u t p e r m a n -h o u r b y a
s m a ll a m o u n t— fr o m 3 * 5 p e r c e n t t o 3 * ^ p e r c e n t f o r t h e C e n s u s -b a s e d m e a s u r e .
E l i m in a t io n o f t h e m a n -h o u r s h i f t h a s a g r e a t e r e f f e c t , r e d u c in g t h e a v e r a g e
a n n u a l c h a n g e fr o m 3 * 5 t o a b o u t 3 * 0 p e r c e n t . g / T h e c o r r e s p o n d in g m e a s u r e s
b a s e d o n BLS m a n -h o u rs f o l lo w e d a s i m i l a r p a t t e r n ( t a b l e H ).
T a b le 4 .

A v e r a g e a n n u a l c h a n g e i n r e a l p r o d u c t p e r m a n -h o u r w it h s e c t o r
p r o p o r t io n s c o n s t a n t , 1 9 ^ 7 -5 8 1 /
A verage a n n u a l p e r c e n t ch an ge
B a s e d p r im a r i l y on
m a n -h o u r d a t a fr o m —
BLS
C e n su s

A g r ic u ltu r a l-n o n a g r ic u ltu r a l
p r o p o r t io n s c o n s t a n t ; w it h :
19^7
19 58

o u tp u t p r o p o r t io n s . . .
o u t p u t p r o p o r t io n s . . .

3 .0
2 .9

3 .^
3 -^

19^7
19 58

m a n -h o u r p r o p o r t io n s .
m a n -h o u r p r o p o r t io n s .

2 .6

2 .7

3 -1
3 .0

l / O u tp u t p e r m a n -h o u r in d e x e s f o r t h e s e c t o r s a r e co m b in ed w it h c o n ­
s t a n t w e ig h t s (m a n -h o u r s o r o u t p u t , 1 9 ^ 7 o r 1 9 5 8 ) . T h is r e m o v e s t h e e f f e c t o f
s h i f t s i n t h e r e l a t i v e im p o r ta n c e o f m a n -h o u r s o r o u tp u t b e tw e e n 19 ^ 7 a n d 1 9 5 8 .

£/
T h e s e c h a n g e s a r e a p p r o x im a te ly t h e sam e w h e th e r 1 9 ^ 7 o r 1 9 5 8 p r o ­
p o r tio n s a re u s e d .




I n a d d i t i o n , e s t i m a t e s d e v e lo p e d t o sh ow t h e f u r t h e r e f f e c t o f e l i m i ­
n a t i n g s h i f t s b e tw e e n t o t a l m a n u fa c tu r in g a n d n o n m a n u fa c tu r in g s e c t o r s i n d i ­
c a t e t h a t t h e s e s h i f t s a p p a r e n t ly h a v e h a d v e r y l i t t l e i n f l u e n c e o n t h e r a t e
o f c h a n g e i n o u tp u t p e r m a n -h o u r f o r t h e p o s tw a r p e r i o d . T h is d o e s n o t t a k e
a c c o u n t o f t h e p o s s i b l e e f f e c t o f f u r t h e r s h i f t s b e tw e e n a n d w i t h i n i n d u s t r i e s
i n m a n u fa c tu r in g a n d n o n m a n u fa c tu r in g . Some r e s e a r c h w o rk i n d i c a t e s t h a t t h e
e f f e c t o f p a r t o f t h e s h i f t s w i t h i n n o n m a n u fa c tu r in g i s n e g a t i v e , i . e . , r e d u c e s
t h e o v e r a l l l e v e l o f o u tp u t p e r m a n -h o u r . 1 0 / H o w e v e r , t h e s e a r e o n ly p a r t i a l
m e a s u r e s an d t h e n e t e f f e c t o f a l l t h e i n t e r i n d u s t r y s h i f t s h a s n o t y e t b e e n
m easu red .

1 0 / S e e J a c k A lte r m a n an d E va J a c o b s , o p . c i t .




15
L o n g-T erm P e r io d
I n t r o d u c t i o n . P u b li c i n t e r e s t i n t h e U n it e d S t a t e s i n r e c e n t y e a r s h a s
b eco m e f o c u s e d a n t h e lo n g - r u n t r e n d o f e c o n o m ic g r o w th . Q u e s t io n s a r e r a i s e d
a s t o w h e th e r t h e p e r io d s i n c e W orld War I I i s t y p i c a l o f fo r m e r p e r io d s a n d
w h e th e r t h e r e a r e a n y s i g n s t h a t t h e r a t e o f g r o w th i s I n c r e a s i n g .
E co n o m ic g r o w th i s p a r t l y d e te r m in e d b y t h e e x p a n s io n o f t h e l a b o r f o r c e
a n d o t h e r r e l a t e d f a c t o r s , b u t t h e d o m in a n t f a c t o r i n a d y n a m ic eco n o m y i s t h e
r a t e o f g a i n i n o u tp u t p e r m a n -h o u r . A n a l y s i s o f t h e lo n g - t e r m t r e n d s i n o u t ­
p u t p e r m a n -h o u r i s t h e r e f o r e e s s e n t i a l t o a n a l y s i s o f t h e lo n g - t e r m t r e n d s
i n e c o n o m ic g r o w th .
A t t h e o u t s e t , a c l e a r a n d s h a r p d i s t i n c t i o n m u st b e draw n b e tw e e n t h e
b a s i c d a t a on o u t p u t p e r m a n -h o u r p r e s e n t e d i n t h i s r e p o r t an d t h e t r e n d c a l ­
c u l a t i o n s d e r iv e d fr o m th e m . T r e n d s a r e d e r iv e d i n o r d e r t o d i s c o v e r w h e th e r
t h e r e a r e a n y u n d e r ly in g m o v em en ts w h ic h a r e c o n c e a le d o r l o s t i n t h e v a r i a ­
t i o n s o f t h e d a t a fr o m y e a r t o y e a r .
T r en d m e a s u r e s , h o w e v e r , a r e i n f l u e n c e d b y v a r io u s f a c t o r s i n a d d i t i o n t o
t h e b a s i c d a t a . F o r e x a m p le , t h e t r e n d c a l c u l a t i o n m ay v a r y a c c o r d in g t o p e r io d s s e l e c t e d T o r m e a s u r e m e n t. C a l c u l a t i o n o f t r e n d s f o r v a r io u s s h o r t ­
te r m p e r io d s f r e q u e n t l y sh o w s d i f f e r e n t r e s u l t s fr o m o n e m e a su r e d o v e r t h e
l o n g t e r m . S i m i l a r l y , t h e s e l e c t i o n o f t h e t e r m i n a l y e a r s o f t h e lo n g - t e r m
p e r io d i t s e l f m ay a f f e c t t h e r e s u l t . T he fo rm o f s t a t i s t i c a l d e s c r i p t i o n a l s o
a f f e c t s t h e t r e n d m e a s u r e . T h is d e s c r i p t i o n c a n r a n g e fr o m t h e s im p le t o t h e
c o m p le x — f o r e x a m p le , fr o m a s im p le c o m p a r is o n o f t h e f i r s t a n d l a s t y e a r o f
a s e r i e s t o m ore c o m p lic a t e d m a th e m a tic a l d e r i v a t i o n s o f l e a s t s q u a r e s l i n e s
o r c u r v e s f i t t e d t o t h e d a t a o v e r a p e r io d o f y e a r s . T h e p a r t i c u l a r fo r m u la ­
t i o n c h o s e n a f f e c t s t h e m e a su r e o f t r e n d a n d t h e c o n c lu s io n s draw n fr o m t h i s
m ea su re.
T h e r e a r e a l s o e c o n o m ic f a c t o r s w h ic h c a n i n f l u e n c e t h e m e a su r e o f t r e n d
i n o u t p u t p e r m a n -h o u r i n t h e e c o n o m y . T h e s e i n c l u d e c h a n g e s w h ic h o c c u r i n
t h e v a r io u s s e c t o r s a n d i n d u s t r i e s , s h i f t s i n t h e r e l a t i v e im p o r ta n c e o f t h e
s e c t o r s , a n d c h a n g e s i n t h e d e g r e e o f c a p a c i t y u t i l i z a t i o n w h ic h o c c u r i n t h e
econ om y.
I n a l l o f t h e s e , i t s h o u ld b e n o t e d t h a t som e ju d g m en t e n t e r s i n t o t h e
s t a t i s t i c a l A n a l y s i s . T h e r e i s n o o n e b e s t t r e n d f o r m o st s e r i e s . T h e a p ­
p r o a c h a p p li e d d e p e n d s o n t h e a s p e c t o f g r o w th w h ic h i s b e in g e x a m in e d . T o
i l l u s t r a t e : F o r som e p u r p o s e s , i t i s d e s i r a b l e t o d e r i v e a m e a su r e o f t r e n d
w h ic h e x c l u d e s t h e e f f e c t o f S h i f t s i n co m p o n en t s e c t o r s o r i n d u s t r i e s ; f o r
o t h e r p u r p o s e s , i t i B e s s e n t i a l t h a t t h e t r e n d m e a su r e i n c l u d e t h e e f f e c t o f
th e se s h if t s .
A ny m e a su r e o f t r e n d r e f l e c t s o n l y t h e a v e r a g e e v e n t s o f t h e p a s t . I t
c a n n o t b e p r o p e r ly e x t e n d e d i n t o t h e f u t u r e w it h o u t c a r e f u l ju d g m e n t a n d a n a l ­
y s i s o f p e r t i n e n t e c o n o m ic c o n d i t i o n s — o f t h e p a s t , p r e s e n t , a n d f u t u r e . S in c e




16

t r e n d s r e f l e c t t h e i n f l u e n c e o f s o m any v a r i a b l e s , e x t r a p o l a t i o n s o f lo n g - t e r m
m o v em en ts m u st b e q u a l i f i e d b y a s s u m p tio n s o f t h e d e g r e e o f c a p a c i t y u t i l i z a ­
t i o n , m anpow er a v a i l a b i l i t y , c h a n g e s i n p r o d u c t a n d i n d u s t r y m ix , t h e t r e n d s
o f i n d i v i d u a l s e c t o r s , a n d g e n e r a l e c o n o m ic c o n d i t i o n s .
T o t a l P r i v a t e E conom y
O u tp u t p e r m a n -h o u r f o r t h e p r i v a t e eco n om y n e a r l y t r i p l e d b e tw e e n 1909
a n d 1 9 5 8 * 1 1 / T h is w as e q u i v a l e n t t o a n a v e r a g e a n n u a l i n c r e a s e o f 2 . 3 t o 2 .k
p e r c e n t p e r y e a r b a s e d on t h e u s u a l ( s t r a i g h t - l i n e ) m eth o d o f c a l c u l a t i n g a v e r ­
a g e r a t e s o f c h a n g e ( t a b l e 6 ) . T h is m eth o d a s c r i b e s a c o n s t a n t a n n u e l r a t e o f
i n c r e a s e t o t h e 5 0 - y e a r p e r i o d , a lt h o u g h t h e a c t u a l c h a n g e s i n m any y e a r s w e r e
c o n s i d e r a b l y h ig h e r o r lo w e r .
T h e c o u r s e w h ic h o u tp u t p e r m a n -h o u r f o l l o w e d t o a c h ie v e t h i s g r o w th w a s
n o t s m o o th , e x h i b i t i n g a n im a l, c y c l i c a l , a n d i r r e g u l a r f l u c t u a t i o n s ( t a b l e 5
a n d c h a r t 4 ) . A t v a r io u s t i m e s , d e e p t r o u g h s o c c u r r e d , s u c h a s t h o s e i n 1 9 1 7 t
1 9 3 3 # an d
; a t o t h e r t i m e s , p e a k s a p p e a r e d ; a n d f o r m o st o f t h e r e m a in in g
t i m e , m ore o r l e s s s u s t a i n e d g r o w th t o o k p l a c e . I n som e c a s e s , t h e s e m o v em en ts
c o r r e s p o n d e d w i t h o t h e r m a jo r d e v e lo p m e n ts o f t h e p a s t h a l f c e n t u r y , e . g . , tw o
m a jo r w a r s , a m a jo r d e p r e s s i o n a n d s e v e r a l r e c e s s i o n s — b u t i n o t h e r c a s e s , t h e y
d id n o t .
T h e r e a p p e a r t o h a v e b e e n r o u g h ly t h r e e c y c l e s i n t h e m ovem ent o f o u tp u t
p e r m a n -h o u r fr o m 1 9 0 9 t o 1 95® • A lth o u g h t h e d i v i d i n g p o i n t s o f t h e c y c l e s a r e b y n o m ea n s c l e a r , t h e y seem t o h a v e s t a r t e d w i t h t h e t h r e e t r o u g h s m en­
t i o n e d a b o v e . W h ile t h e d e p th o f t h e tr o u g h a n d t h e d u r a t io n a n d s p e e d o f
r e c o v e r y v a r ie d c o n s id e r a b ly f o r ea ch c y c le p e r io d , th e a v era g e in c r e a s e in
o u tp u t p e r m a n -h o u r f o r t h e f i r s t d e c a d e i n e a c h c y c l e e x c e e d e d t h a t f o r t h e
e n t ir e 50-y e a r sp a n .
T h e s e c y c l e s w e r e n o t c o m p a r a b le i n te r m s o f e c o n o m ic c o n d i t i o n s . I t i s
p r o b a b ly m ore m e a n in g f u l t o com p a re t h e p o s t-W o r ld War I I p e r i o d , I 9 I+7 - 5 8 , w it h
t h e c o r r e s p o n d in g p o s t-W o r ld W ar I p e r i o d , 1 9 2 0 - 3 0 , 1 2 / a lt h o u g h h e r e ’, t o o ,
t h e c o n d i t i o n s w e r e n o t i d e n t i c a l ( e . g . , t h e f i r s t p e r io d d i d n o t r e q u i r e m o b i­
l i z a t i o n s i m i l a r t o t h a t o f t h e m ore r e c e n t K o rea n c o n f l i c t ) . I n t h e d e c a d e

1 1 / T h is a n a l y s i s b e g i n s w i t h 1 9 0 9 . T h is i s t h e f i r s t y e a r f o r w h ic h
o f f i c i a l c o n sta n t d o lla r e s tim a te s o f n a tio n a l p rod u ct a re a v a ila b le . S ee U .S .
In co m e an d O u tp u t, S u p p le m e n t t o S u r v e y o f C u r r e n t B u s i n e s s , N ovem b er 1 9 5 8 .
O f f i c e o f B u s in e s s E c o n o m ic s , U . S . D ep a r tm en t o f C om m erce, t a b l e I - l 6 ,
1 2 / T h e b e g i n n i n g y e a r i n e a c h c a s e , 1 9 2 0 a n d 1 9 ^ 7* r e p r e s e n t s t h e s e c o n d
f u l l y e a r f o l l o w i n g t h e e n d o f t h e w a r . T he t e r m i n a l y e a r s 1 9 3 0 a n d 1 9 5 8 w e r e
y e a r s o f r e c e s s i o n . T he e m p lo y m e n t-la b o r f o r c e r a t i o s w e r e q u i t e s i m i l a r f o r
t h e c o m p a r a b le t e r m i n a l y e a r s . ( S e e s e c t i o n on R e l a t i o n s h i p o f T r en d t o
C a p a c it y U t i l i z a t i o n , p . 2 8 , f o r e x p l a n a t i o n o f t h i s r a t i o . )




IT
T a b le

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p r iv a te

5 5 .9

5 1 .1
5 1 .8

6 2 .8

5 2 .3

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5 7 .1
5 9 .8
6 fc .7

5 3 .0
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5 8 .2

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5 9 -2

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1932.

.

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1913.
1911*.

.
.

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1915.
191^•

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1917.
19 18 .

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19 2 1.
19 2 2 .

.

1923.
19 2 * .

* * 9 .3
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*7 .8
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5 9 .*

*1 6 . 7

5 5 .1

5 9 .7

5 3 .*

6 1 .3
6 3 .6
6 6 .7

5 8 .1

6l .0
6 3 .9

6 0 .2
6 1 .8

5 9 .2

6 0 .8

6 2 .1

6 8 .1

8 3 .5

6 3 .5
6 1 .7

6 * .2
6 7 .2

6 7 .3

6 3 .8

6 7 .5
6 9 .8

6 6 .2

5 7 .8

8 3 .5

1925.
19 2 8 .

.
.

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.

8 1.9

6 0 .*
6 3 .1
6 1 .*

1927.
19 2 8 .

.
.

.
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6 3 .5
6 3 .3

1929.

.

.

6 3 .8

8 3 .3

6 6 .8
6 3 .0
6 6 .9
6 1 .9
7 0 .6

6 3 .2
8 3 .5

6 0 .1

6 8 .9
6 8 .0

5 8 .5
6 it. 8

7 7 .8

•

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7 1 .9

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5 8 .9

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5 0 .9
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5 9 .*
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5 0 .2

.
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1939.

* 7 .9
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5 3 .8
5 * .8

.

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5 1.8

5 2 .2

5 9 .0

1937*
1938.

5 3 .*

5 6 .7

5 8 .1
6 0 .6

• •

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6 0 .2
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5 2 .2

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5 0 .5
5 5 .2

• •
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6 0 .8

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193*.

5 9 .*

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6 3 .2

5 2 .5

.

1935*
1938.

5 2 .0
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.

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.

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1930.

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5 1.6

1909•

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1931.
1932.

C en su s

6 8 .3

6 8 .1
6 9 .2
6 6 .7
6 lt. 8
7 2 .0

5 0 .7

6 3 .7

6 3 .5
6 3 .7
6 0 .3
5 8 .6
6 5 .3

6 8 .5
6 7 .7

6 7.I
6 3 .5
6 7 .*

6 8 .0
7 0 .2

6 2 .3
7 0 .8

6 8 .6
6 9 .7

6 9 .5
6 8 .2
6 3 .1

6 7 .2
6 5 .lt
7 2 .6

7 3 .7
6 * .7

7*. 5

6 8 .6

7 * .2

7 5 .0

7 8 .1

7 2 .2

6 5 .1

7 8 .7

7 2 .5

7 5 .0

7 7 .9

7 8 .5

8 1 .3

7 9 .?

7 2 .9
7 5 .O

7 5 .3

7 * .7

8 1.6

8 0 .5

8 1.0

8 2 .6

7 8 .0

8 1.2

8 3 .2

8 1.8
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8 0 .8
8 8 .6

8 9 .5

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8 0 .3

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19*1 • .

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8 7 .9

8 8 .9

9 1 .8
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8 8 .9

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8 5 .8

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18

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9 3 .8

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9 6 .6

8 9 .3
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1 9 1 *8 .

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1 0 3 .3

1 0 2 .2

.

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1 1 6 .2

1 1 0 .3

1951.
1952.

• •
. .

113 .2

1 1 ^ .5

1 0 8 .8
1 1 0 .6

1 0 1 .6
1 1 6 .1

1 0 2 .4

1950.

1 0 3 .1
n o .4

1 1 5 -2

n 4 .1

1 1 2 .8

1 2 4 .5

1 1 2 .0

U 8 .9

1 2 4 .0

1 1 5 -5

1 3 8 .6

1 1 5 .1
I I 6 .9

1 2 3 .9

1 3 8 .0

1 1 *8 . 3

1 2 7 .0

1 4 7 .9

1 19 .0
1 2 1 .8

1 2 7 .2

1945.

1953.

• •

1 1 5 .7
1 2 0 .4

1954.

• •

1 2 2 .6

1955.
1956.

• •
. .

1 2 8 .0

1 5 3 .5

1 2 1 .9

1 2 8 .3

1 2 1 .5

1 3 3 -1
1 3 3 .6

• •
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1 3 2 .8

1 2 l* -.9

1 3 7 .9

1 3 5 -1 *

1 8 8 .6

1 2 6 .3

1 3 9 -1

1 0 8 .5

1 5 2 .9
1 5 5 .8

1957.
1958.

1 5 6 .%
1 6 6 .7

9 8 .2

1 6 7 .O
1 8 9 .2

l /
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O u tp u t

B u s in e s s

d a ta

E c o n o m ic s ,

prepared b y
2 /

o f

O u tp u t p e r m a n -h o u r

B u s in e s s




John W.

by

s e r ie s

U .S .

based

D e p a rtm e n t

K e n d r ic k

p e r m a n -h o u r

E c o n o m ic s ,

prepared

U .S .

lin k e d

s e r ie s

based

D e p a rtm e n t

J o h n W . K e n d r ic k

of

o f

lin k e d

on

re a l produ ct

C om m erce,
in
on

19^7

to

in

19^7 t o

13 0 .1
13 0 .1

fro m

an d u n p u b lis h e d
B IS

th e

O ffic e

m a n -h o u rs

m a n -h o u r s .

re a l produ ct

C om m erce,

d a ta

1 2 7 .5

d a ta

fro m

an d u n p u b lis h e d

th e

O ffic e

m a n -h o u rs

C en su s m a n -h o u rs .




M




20

21

6.

T a b le

A vera ge

annual p ercen t

ch an ge

1 9 0 9 -5 8

in

A vera ge

S e cto r

rea l

produ ct

per

m a n -h o u r

1 /

annual p ercen t

B IS

change

C en su s

7 j ..................................................

2 .3

2 .4

A g r i c u l t u r e . ........................................................

2 .1

2 .1

N o n a g r i c u l t u r e ...................................................

2 .0

2 .1

T o ta l p r iv a te

1 /
O ffic e

O u tp u t p e r

o f

J o h n W.

B u s in e s s

K e n d r ic k

7j
com p on en t

The




lin k e d

average

becau se

m a n -h o u r

s e r ie s

E c o n o m ic s ,

o f

in

1947

ch a n ge
s h ifts

based

on

and u n p u b lis h e d
in

in

to
th e
th e

BLS

or

to ta l

rea l

produ ct

m a n -h o u r s

d a ta

d a ta

fr o m

prepared

th e
by

C en su s m a n -h o u rs .
is

r e la tiv e

h ig h e r

th a n

im p o r t a n c e

o f

th a t

fo r

e it h e r

th e

tw o

se cto rs.

22
f o U o w i n g W o r ld W ar I ,
h ou r w as h ig h e r
fo r

th e

th a n

11 y e a rs

sh ow ed

a

in

e a r ly

th e

1 9 2 0 -3 & ,

th e

fo llo w in g

d iffe r e n t

average
average,

W o r ld W ar I X .

r e la tio n s h ip .

p e r io d ,

a v era g e- in c r e a s e

"th e

lo n g -te r m

very

la r g e

fo r

th e

th e

v a r io u s

In
in

e a r lie r

an n u a l in c r e a s e

19 0 9 - 5 8 ,

la te r

p e r io d

w as

th e

o u tp u t
th a n

com p on en t

in c r e a s e

p e r io d .
r o u g h ly

in

lo w e r

T h e tw o m a jo r

a g r ic u ltu r e ,

th e

but

In

per

th e

se cto rs

w as v e r y

s m a ll

n o n a g r ic u ltu r e ,

th e

sam e

as

m an­

average

fo r

th e

th e
la te r

p e r io d .
A n a ly s is
p o in ts

o f

up th e

fa c t

p o s t-W o r ld W a r -H
ou tp u t

per

p e r io d

is

The

changes

d a ta
in

w h ile

fo r

ap pears

2 .9

th e

or

a

cu rve

13 /
B a s ic
p.

fo r

th a t

th e

i y

th a t
th e

is

d u r in g

th is

1 9 0 9 -1 9 *

annual

th e re

ch a n ge
fo r

th e

p ercen t

appear t o

p e r io d .
o f

lo n g -te r m

a s p r e v io u s ly

2 .k

or

F or

in

(b a s e d

be

one

e x a m p le ,

w as v e r y
0 .4

lit t le

p e r ce n t),

w as 2 .6

in c r e a s e

a n o th e r m ild
in c r e a s e

e n tir e

th e re

an n u a l in c r e a s e

average

th e

th e

th e se

p e rce n t.

d ir e c tio n

in

1 9 3 9 -5 8

p e r io d

o v e r a l l m ovem ent

changes

lh /

d a ta .

a p a r a b o la ,
in

are,

th e
w as

th e

o f

th a t

a

o f

v a r io u s

d iffe r e n t

im p lie s
ra te

o u tp u t p e r

is

h ow ever,

p e r m a n -h o u r.

in

in

d ir e c tio n ,

m ay y i e l d

w h ich

o u tp u t

in

T h ere

and th e s e

a c c e le r a tio n

c o n s is te n t
For

o f

per

th o se

m an­

fittin g
fo r m s

r e s u lts .

con sta n t

and

In

w ord s,

o th e r

c o n tin u in g

ch an ge

in

ou tp u t

th e

e x p e r ie n c e

d e s c r ib in g

past

D ew h u rst
N ew Y o r k ,

R ecord ,

p e o p le

w ar

fo r

(a n d
at

w ho h a v e

fin d in g

o f

th e

a ls o

63,

th is

per

o u tp u t

e a r lie r

p e r io d s

o f

in

o u tp u t

p .

1 9 5 «.

h2;

in

per

th e

’ new '

w e ig h te d
th a t,

s im ila r

in

N eeds

L ip to n

in

1959*

te ch n o ­

m a n -h o u r)

th o u g h

h ig h

w as

le n g t h ."

m a n -h o u r h a v e

A m e r i c a 's

and M ilto n

N a tio n a l

o f

per

ra te,

N a tio n a l

in d ic a te d

N B E R , N ew Y o r k ,

h eard

average

tre n d s

1955*

F a b rica n t

an

and A s s o c ia t e s

F ebru ary

th e

S o lo m o n

O c c a s io n a l P a p er

m a n -h o u r

a fte r

w ith

e x a m p le ,

C hange,

s u r p r is e

F r e d e r ic

a ls o

been

and R e s o u rce s,
th e

C o n fe r e n c e

I n d u s t r ia l C o n fe r e n c e

B oa rd ,

58.

p.
F or
E,

is

R esearch .

o u tp u t

2 0 t ’n C e n t u r y F u n d ,

15/

in

p o s t -W o r ld W ar I I

tre n d ,

2 .3

H ow ever,

years,

average

ta k e ,

g ro w th

p e r io d

C u rves

B oa rd B u s in e s s

a p p e n d ix

to
can

o f

m ay

ran ge

J.

N ew Y o r k ,

tren d

e x a m in in g

o b s e r v a t io n

"It

age

u sed b y

o f

th e

accou n t

on P r o d u c t iv it y

d u r in g

w ith in

o f

have been

and th e

cu rve

E c o n o m ic

F a cts

lo g ic a l
rose

to

co n sta n t

T h is

o f

38,

th e

in c r e a s e s

15 /

m a n -h o u r.

B u reau

in c r e a s e

r e s p e c tiv e ly ).

19 19 - 58,

th e

annual

average

average

in to

ra te

assu m es

m a n -h o u r f o r

lin e

e a r ly

cu rve

o f

th e

th e

p e r io d

as

year.

d e r iv e d

in

o f

s t r a ig h t

(a n

19 3 0 *s ,

ta k e s

O ne fo r m
ch an ge

lo n g -te r m
a s w e ll

average

th e

th e

m a th e m a tic a lly

a

th a n

e x p e r ie n c e

per

by

In

te c h n iq u e

w h ic h

cu rve

th a t

p e r io d

per

A n oth er

w h ich

o u tp u t

d ir e c tio n

p o s s ib ly

la te

p ercen t

h ou r,

o f

m a n -h o u r

ou tp u t p e r

T h ere
m id d le

th e

in d ic a t e

th e

th e

s u b p e r io d s

sh ow n h ig h e r

sen se,

d e s c r ib e d

sh ow s an
in

have

p r e v io u s

13 /

an d C e n su s m a n -h o u rs ,

o r m ore
g a in

th is

o v e r a l l m ovem ent
w h ich

m ov em en ts w i t h i n

have been

w h ic h

In

n o t u n iq u e .

in d ic a te d ,

th e se

p e r io d

m a n -h o u r.

s h o r t-te r m

th ere

19 0 9 - 5 8 > can b e

p e r io d ,
o n B IS

th a t

a m ore

pp.




d e ta ile d

A - 3 7 -M*-*

d e s c r ip tio n

o f

th is

cu rve

and o th e r

cu rves,

see

23

A p a r a b o la
ra te
by

o f

g ro w th

0 .0 6

per

2 .1 2

The
In

1

in

1 9 0 9 -5 8

fo r

th e

each y e a r.

2 .0

e t c .,

u n til

a n o th e r
a

it

th is

cu rve,

put

m a n -h o u r

in d e x e s

fr o m

th e

d e r iv e d

average

so

per
th a t

m a n -h o u rs
In
p e r io d

1958

and

3*7

a d d itio n

in flu e n c e

to

on th e

p a r a b o la

ty p e

o u tp u t

th e

is

3*3

o f

o u tp u t

u s in g

19 10

d a ta

to

16/

a

In

th e

of

per

has been

m a n -h o u r

th e

cen tu ry

m ost

been

recen t

r is in g

17 /
th e

at

w h ich

d ecade.
th is

18/

rea l
are

J .

on

per

on

o n ly

th a t




w ith

in d e f­

th e

o n B IS

o f tim e

c o n s id e r a b le
and

o f

o u tp u t

th e
in

in c r e a s e

is

3*5

p e rce n t,

1 8 8 9 -5 7

p e r io d

and R e s o u r c e s ,
fo r

1958

th e

ra te

e s tim a te s

In

fro m

th is

and

th is

18 5 0 -

p e r io d

I 89O t o

fro m

ra te s

18 5 0 .

year

per

a p p ly in g

o f

d a ta

ou t­

a c c e le r a tio n ,

ra te

th e

on

as

th e

cu rve

1950,
5*0

and

are

2 .8

th e

of

N a tio n a l B u reau

NBER ( p .

p a ce

o f

p ercen t

has

d a ta

to

p ercen t,

per

th e

o f

decade

per

The

th e

fir s t
of

fo r

p r ic e

and

e n tir e

la s t

k-2.

The D ew h u rst

19 5 0

p r ic e s ,

p e r io d

covered
fro m

years

d a ta

is

th e

red u ced .

fo r

th e

of

each

th e

u sed

e s t im a te s

c o v e r in g

m ay y i e l d

y e a r w ith in

year

in

fo r

in

p e r io d .

in

s e le c te d

d a ta

E c o n o m ic s

p.

every

D u r in g

m a n -h o u r h a s

w e ig h ts

c it .,

fo r

th e

s in c e .

d e c a d e ."

in c o m e

fo r

d u r in g

per

says

ou tp u t

r e a l produ ct

B u s in e s s

th e

in

29 p ercen t

d iffe r e n t

O ffic e

w e ig h ts

op.

d e r iv e d

HO p e r c e n t

o f

h ) . . .F a b r ie a n t

ad van ce

averaged

^ 3 -^ 5 •

u sed

p r ic e

fro m

d a ta
th e

22

pp.

s e r ie s

n a tio n a l

on

th a t

of
te rm

It

35

c it .,

average

tre n d s

5 o b s e r v a tio n s .

I .

ra te ,

op.

D ew h u rst,

la r g e r

1958

to

le n g t h

W o r ld W ar I I — n a t i o n a l p r o d u c t

d a ta

p r iv a te
based

It

19 5 ^ p r ic e

on

T ren ds b a se d

n oted

up.

m a n -h o u r

th e

th o se

s h o u ld b e

c o n s is te n t

W o r ld W ar

p rodu ct

F r e d e r ic

m ay b e

d e r iv e d

Annual R eport

g re a te r

d iffe r

fe r e n c e s

th e

th e

1 9 0 9 -5 7

cu rve

th e se

th e

17/

lo n g

d e r iv e d

to

7 )*

e s t im a te s

N eeds

w ith

o n BLS

m a n -h o u r .

in c r e a s e

s m a lle r

have

1958

th e

ty p e

fo r

w as

1 8 5 0 -1 9 5 2 .
fro m

The

cu rves

sp eed ed

based

d e fla te d

year.

lo n g

r e fle c te d

The

rep ort

based

a ls o
3 9 ^

p e r io d — a ft e r

o u tp u t

u s in g

p e r io d

c o v e r in g

im p o r ta n c e — th e

even

m ay a l s o

d e r iv e d

fitte d

p ercen t based

1 8 8 9 -1 9 5 7

th e

a p a r a b o la

ty p e

S o lo m o n F a b r i e a n t ,

F a b r ie a n t

decade

is

p r e c e d in g
an

th e

based
16/

fitte d

(ta b le

o u tp u t

w o u ld b e

18 /

th e

great

3*5

in

years

7 ).

not

som ew h at

is

s t u d y A m e r i c a 's

fitte d

co m p u te d ,

7 )*

in

cu rve

annual

in c r e a s e

o u tp u t p e r

d e s c r ip tio n ,

u sed

c o v e r in g

in
does

a

th e

p ercen t

(ta b le

g a in

has

p e r io d

cu rve

1 0 th

3*7

g a in

F o r e x a m p le ,
th e

th e

T h is

p r e s e n te d b e g in n in g

every

are

o f

ch an ge

d a ta

e s tim a te s ,

s im ila r

" A l s o —a f a c t
q u a rte r

fo r

fro m

fin d in g

R esearch

tre n d .

ra te

I f

o f

i f

w h ic h m ay b e

o f

lim it.

19 5 8 ,

to

ra te

cu rve

are

ra te

th a t

econ om y in c r e a s e d

su bsequ en t

1958,

cu rve
ra te

s ta tis tic a l

a

year.

(ta b le

T h is

E c o n o m ic

o f

h is

fo r

1950

r e s p e c tiv e ly

o f

D ew h u rst

p e rce n t.

th e

p a r tic u la r

to

p e r m a n -h o u r

P r o fe s s o r

2 .2

fo r m

in

fo r

o n C e n su s m a n -h o u rs

fro m

d e r iv e d
per

19 0 9

F a b r ie a n t

cu rves

percen t

stu d y ,

fro m

by

p e r m a n -h o u r

w h ereas

is

th e

d egree

an u p p er

based

and th e
m easu re

d e r iv e d

1950,

percen t

c o n s id e r e d

m a n -h o u r

reach es

ra te

becom es,

h ow ever,

but

m eans t h a t

th e

c h a n g in g

in ite ly

in d ic a t e s

t o t a l p r iv a te

o n C e n su s m a n -h o u rs

secon d

c o n s ta n tly

e v e n tu a lly

T h is

p e rce n t,

p ercen t based

im p lie s
o f

th e

p o in ts

h y p e r b o la ,

case

to

y e a r w as

3 .9

and

a ls o

th e

fo r

p e rce n t,

m a n -h o u rs ,

d a ta ,

in d e x e s

o u t p u t p e r m a n -h o u r

p e rce n ta g e

m a n -h o u r

2 .06 ,

fitte d
in

r e s u lts

p e r io d .
In

p e r io d

th e

are

p e r io d
w h ich

The

d if­

p a r tic u la r ,

it

1 9 1 0 -5 0

based

are

T a b le

7.

1958

d e r iv e d
based

ra te

o f

ch a n ge

on v a r io u s

in

o u t p u t p e r m a n -h o u r

lo n g -r u n
S e r ie s

BLS 2 /

Ite m

1 9 0 9 -5 8

C en su s

3 /

1 9 0 9 -5 5

tren d

m ea su res

and p e r io d
F a b r ican t

covered . by
F a b r i-

hf

can t

1 9 0 9 -5 7

\J

1 8 8 9 -5 7

1958

fo r

th e

p r iv a te

econom y-

l /

D e r iv e d

tre n d

h u rst

m easu res
D ew -

D ew 5 /

1 9 1 0 -5 0

h u rst

D ew 5 /

1 8 9 0 -1 9 5 0

h u rst

R a te

L in e a r
T ota l

.........................................................................

2 .3

2 . it

2 .6

2 .3

1.9

1 .7

1 .7

5 .0

2 .8

2 .2

Ag r ic u ltu r a l-n o n a g r ic u ltu r a l
p r o p o r t io n s

c o n s ta n t w ith —

1909

o u tp u t p r o p o r t io n s

............

2 .1

2 .1

1958

o u tp u t p r o p o r t io n s

............

2 .1

2 .1

1909

m a n -h o u r p r o p o r t i o n s

...

2 .1

2 .1

1 9 5 8 m a n -h o u r p r o p o r t i o n s

...

2 .0

2 .1

2 .3

2 .3

3 .7

3 .9

A d ju s te d

fo r

u tiliz a tio n

ch an ges
7 /

in

\A/ O O
)2/ 2 - 3

\fi/
jt /

9 U
0
dm

c a p a c it y -

... ........................................

C u rvi lin e a r -p a r a b o la
T o ta l

.........................................................................

3 .5

3 .3

Ag r ic u ltu r a l-n o n a g r ic u ltu r a l
p r o p o r tio n s

c o n s ta n t w ith —

1909

o u tp u t p r o p o r t io n s

............

3 .6

3 .7

1958

o u tp u t p r o p o r t io n s

............

3 .2

3 .3

1909

m a n -h o u r p r o p o r t i o n s

...

3 .1

3 .3

1 9 5 8 m a n -h o u r p r o p o r t i o n s

...

2 .9

3 .1

3 .3

3 .5

3 .5

3 .7

A d ju s te d

fo r

u tiliz a tio n

ch an ges

in

c a p a c it y

7 / ................................

C u r v ilin e a r -h y p e r b o la
T o t a l ............................................... .........................




\a / 0 fi
p f 2-8

'\fs/ 9

0

5 /

[ 1 8 5 0 -1 9 5 0

25
F ootn otes
l /

to

th e

o f

B u s in e s s

in d e x

2 /

O u tp u t

d a ta

per

U .S .

John W.

John W.
o f

I n c .,

E s tim a te s

o f

19 5 5 ,

ta b le
6 /

T h is
in

te rm s

o f

c a p a c ity

7/

o f

per

1959,

p r iv a te

in

based
of

lin k e d

on

o f

re a l produ ct

C om m erce,
19^7

th e

lo g a r ith m s

on
in

to

B IS

ta b le

O ffic e

d a ta

fro m

th e

O ffic e

m a n -h o u rs

C en su s m a n -h o u rs .
S o lo m o n F a b r i c a n t ,
N a tio n a l B u reau

B a s ic

o f

A.

n a tio n a l
N eeds

th e

m a n -h o u rs

an d u n p u b lis h e d

to

63,

fr o m

m a n -h o u r s .

r e a l p rodu ct
19^7

d a ta

an d u n p u b lis h e d

C om m erce,

O c c a s io n a l P a p er

in c o m e

per

m a n -h o u r

and R e s o u r c e s ,

in

T w e n tie th

1950

p r ic e s

C en tu ry

in

Fund,

1^.

h o ld s

o f

o u tp u t

per

w e ig h te d

m a n -h o u r.

S o lo m o n F a b r i c a n t ,

co n sta n t

th e

r e la tiv e

im p o r t a n c e

o f

a

num ber

o f

op.

c it .

in d u s tr ie s ,

m a n -h o u r s .

E m p lo y m e n t-la b o r -fo r c e




m ea su res

u n w e ig h t e d m a n -h o u r s ,

D e w h u r s i^ A m e r i c a ' s

In d exes

s e r ie s

of

lin k e d

s e r ie s

C hange.

R esearch ,

F r e d e r ic

tren d

based

D e p a rtm e n t

K e n d r ic k

o u tp u t

on P r o d u c t iv it y

5 /
J .

In d exes

s e r ie s

K e n d r ic k

U .S .

prepared by

E c o n o m ic

sq u a res

D e p a rtm e n t

m a n -h o u r

E c o n o m ic s ,

bj
F a cts

le a s t

m a n -h o u r

E c o n o m ic s ,

O u tp u t p e r

B u s in e s s

th e

n u m bers.

prepared by
3 /

o f

7

C om p u ted fr o m

o f

d a ta

ta b le

u tiliz a tio n .

r a tio

is

u sed

as

an

a p p r o x im a tio n

o f

th e

degree

2*

The
a tio n s

in d e x e s

in

any y ea r

w h eth er lin e a r

a ctu a l

m ea su re,

or

c u r v ilin e a r .

(o r

m ore

te c h n ic a lly

th e

m ay d i f f e r

su m o f

s u b s ta n tia lly

O ver th e
th e

lo n g -r u n

sq u a red

fr o m

th e

p e r io d ,

d e v ia tio n s )

o f

d e r iv e d

th e
th e

d e v i­
a c tu a l,

in d e x e s fr o m t h e d e r iv e d c u r v e s a r e s m a lle r th a n t h o s e fro m th e s t r a ig h t l i n e .
O f t h e tw o t y p e s o f c u r v e s w h ic h w e re com p u ted f o r t h e p e r i o d 1 9 0 9 -5 o (b a s e d
on C en su s
th a n

th e

or

s ta tis tic a l
m ean

B IS m a n -h o u r s ),

p a r a b o la .

In

th is

te r m in o lo g y

"b e tte r"

in

as

th e

h y p e r b o la

sen se,

p r o v id in g

an a b s o lu te

sen se,

The

cu rves

and

th e

in

o u tp u t

per

m a n -h o u r w h ic h

m e n ts

e le m e n ts .
b u tio n
o f

th e

An a n a ly s is

to

th e

s tr a ig h t
o f

th e se

f i t ,"

i.e .,

b etter

1 9 /

fo r

s m a lle r

m ay b e
a ll

d e v ia tio n s

r e fe r r e d

but

th is

p u rp oses

to

does
o f

are

o n ly

m a t h e m a t ic a l s u m m a r ie s

fro m

th e

is

a c tio n

needed

s u m m a r iz e d b y

to

th ese

o f

in
not

a n a ly s is .

r e s u lt

e le m e n ts

o v e r a l l m ov em en ts

som ew h a t

cu rves

’’ b e t t e r

a

lin e

sh ow s

v a r io u s

o f

m ove­

m any c o n t r i b u t o r y

u n d ersta n d

th e ir

c o n tr i­

m a th e m a tic a l

e x p r e s s io n s

a c c e le r a tio n

in

tren d .

M a jo r S e c t o r s
O ne
per

o f

th e

p r im a r y

m a n -h o u r f o r

e x tr a o r d in a r y

th e

g a in

reason s

p r iv a te

w h ic h

fo r

an y e v id e n c e

econ om y

to o k

p la c e

d u r in g
in

th e

th e

o f
la s t

ra te

o f

h a lf

cen tu ry

g row th

o f

ou tp u t

w as

th e

a g r ic u ltu r e .

O v e r t h e w h o le p e r i o d 1 9 0 9 - 5 8 , o u t p u t p e r m a n -h o u r i n t h i s s e c t o r i n c r e a s e d
a t an a v e ra g e a n n u a l r a t e o f 2 .1 p e r c e n t (t a b le 0 ) .
H ow ever, th e r e a p p ea r t o
have been
percen t

d is tin c t

to

per

th ir tie s

th e

year.

The

an d a g a in

The
m ade t o

sh arp
h e lp

at

f a r m e r 's

G overnm ent

th e

r e fle c ts

e le c tr ic ity ,

and th e

in

th e

tin u e d

r e la tiv e
to

The
sector
as

average

w as

2 .0

1 9 /
tim e

d a ta

a p p e n d ix E .)




up

o f W o r ld W ar I I ,

em erged

in

a v e r a g in g

about

th e

th ir tie s

p r o b a b ly

th e

a v a ila b ility

o f

e d u c a tio n
o f

s c ie n c e

th e

o f

th e

e a r lie r

about

in

th e

6 .2

1 .1
m id ­

p ercen t

in

th e

fa r m

and b io lo g y

to

o f

and

e ffo r ts

s tim u la tin g

m a n -h o u r

a fte r

te c h n o lo g y ,

fa r m in g .

s u b m a r g in a l la n d s

fa r m s .

th e

s ta b iliz in g

e ffe c t.

ou tp u t p e r

a p p lic a tio n

m a r g in a l o r

at

c r e d it,

had th e ir

a g r ic u ltu r a l,

c h e m is tr y
o f

a ll

r e fle c ts
a im e d

A c c o m p a n y in g
and

F arm p o p u l a t i o n

in c r e a s e s

a ls o

con ­

p e r io d .

p ercen t

as

fa r m e r s

la r g e -s c a le

th is

p o stw a r

in

ad van ces

o f

s p e a k in g ,

su ch

fo r

g row th

n o ta b le

redu ced u se

2 .1

In

m o d e st,

s u b s ta n tia lly

p rogram s

an n u a l in c r e a s e

S tr ic tly

s e r ie s

p ic k e d

d e p r e s s io n ,

d u r in g

or

c o m p a r e d W ith

in c r e a s e

q u it e

5) •

im p o r ta n c e

d e c lin e

a g r ic u ltu r e .
w as

th e

The phenom enal r a te

a d v a n ces w ere

fo r

in c r e a s e

d u rin g

and

W o r ld W ar I I
th e se

tren d

in c r e a s in g

m a rk et,

research

th e

average

o f

end

w h ic h

fa r m e r s

in

th e

ra te

h and

r is e

th e

ch an ges

1930*s ,

19 ^ 7 (c h a r t s

a fte r

th e

tw o

I 909

years,

in

fr o m

ou tp u t p e r
1 9 0 9 -5 8

averages

th e

th o se

o f

2 .4

u su al te s ts

u sed

in

th is

m a n -h o u r f o r

(c o m p u te d b y
and 2 .9

fo r

p ercen t

b etter

rep ort.

th e

f it

(F o r

th e

n a n a g r ic u ltu r a l

s tr a ig h t
based

do

not

fu rth e r

lin e

m eth od

o n BLS a n d

a p p ly
d e ta ils

to
see

27

C e n su s m a n -h o u r s ,
o f

tim e ,

w as

th ere

g re a te r

a ffe c te d
In

can b e

o f

to

c a p a c ity

th e
o f

w h ic h

occu rred

c o v e r in g

th e

u tiliz a tio n

O u tp u t p e r

its

am ong t h e s e

com p on en ts,

sh o rt,

th e

n o n a g r ic u ltu r a l
in

w id e

and

s h a r p ly

som e

In

to

th e

fir s t
to

e a r lie r ,

recovery

s lig h t

th a t

a d ju s t e d

th ese

w ere
th e

not

o f

c u r v ilin -

seem

a r is e s

W hen d a t a

r e m a in s

d ip s

in

e v id e n c e

to

a lm o s t

fo r

changes

no

p e r io d .

do

th is

fo r

p e r io d

in c r e a s e

19 0 9 - 1 9 # an d th e

p e r io d .

th ere

lo n g e r

d u r in g

d egree

d a ta , b u t

decade,

p e r io d ,

th e

average

n o n a g r ic u ltu r e
A

are

ir r e g u la r

th e

o u tp u t

in

th e

th e

g a in s

la s t

E ffe c ts

se cto rs

se cto r,

th e
d egree

o f

c u r v i-

th ere

lim ite d
g row th
in c r e a s e s .

th e

a g r ic u ltu r a l

th e

m ov em en ts f o r

w as

a

w h ere

fa ir ly

m o d e ra te

at

w ere

fir s t ,

th e

stea d y

c y c lic a l

th ere

and

and
a ls o

but

rose

decade.

o f

S h ifts

b etw een

s h ifts

in

p r iv a te

o f

average

im p o r t a n t

e a r lie r ,
can

in flu e n c e d b y
The

ra tes

th a n

to

se cto r,

w ere

a ls o

in

m a n -h o u r f o r

d iffe r e n tly

a g r ic u ltu r a l

th e

A s m e n tio n e d
to ta l

per

is

grou p s.

d iffe r e n c e s

19 19 # d e s p ite

a fte r

th e

sector

in d u s tr y

h a d m u ch h i g h e r

c o n t r ib u t e d

flu c tu a tio n s ,

e s p e c ia lly

a n d m a jo r

m a n -h o u r f o r

w h ic h

n o n a g r ic u ltu r a l
In

and

s u b s ta n tia l

m a n -h o u r

M easu res E x c lu d in g
in d u s tr ie s

n o n a g r ic u ltu r a l

in d u s tr ie s

in

have

th e

o u tp u t p e r

N o n a g r ic u ltu r e .

th e
th e

cu rve
th e

o f

m ov em en ts

flu c tu a tio n s .

la te r ,

th e

in d ic a t e s

se cto rs

econ om y.

ir r e g u la r

fo r

o f

over
th e

in d ic a te d

1 9 1 9 -5 8

th e

com p on en t

a v a ila b le

in c r e a s e

a

tren d
w h ich

speed

in d e x e s

su bsequ en t

d u r in g

in

d ir e c tio n .

over

p e r io d

m a n -h o u r f o r

o f

in fo r m a tio n

p r iv a te

in

fittin g
g a in s

as

and th e

th e

ch an ges

th e

c y c le s

te rm , b u t ,

trou g h

a g r ic u ltu r e ,

s m a ll

e x a m in in g

th ree

20/

m o v e m e n ts

In

lo n g
th e

sh arp

very

sector

lin e a r ity .

th e

over

In

have been

o b ta in e d b y

fr o m

r e c o v e r ie s

n o n fa rm

to

d ep th

c o n t in u in g

e n tir e ly
and

th e

con tra st

e x h ib it
e a r ity

th a n

by

r e s p e c tiv e ly .

seem

a ls o

in flu e n c e

econ om y.

th e
th e

E s tim a t e s

A g r ic u ltu r e
r e la tiv e

m ovem ent

and

im p o r ta n c e
o f

o f

per

d e v e lo p e d

have b een

o u tp u t

fo r

1 9 0 9 -5 8 p e r i o d w h ic h e x c lu d e t h e e f f e c t o f p a r t o f t h e s e s h i f t s , i . e . ,
s h i f t b etw een a g r ic u lt u r e an d n o n a g r ic u lt u r e .
O ver th e e n t ir e 5 0 -y e a r

p e r io d ,

th e

average

e ffe c t

o f

s h ifts

ch a n ge

o f

2 .k

h ou rs.
(ta b le

annual

in c r e a s e

In

p e rce n t,
The

som e

sh o rte r

o u tp u t

per

d e p r e s s io n ,

w h ile

m a n -h o u r ,

20/
o f

21/
o u tp u t
or

F or

a m ore

c a p a c ity
T h ese

c o m p o s ite

1958.




of

2 .1

e x c lu d in g

p ercen t

s h ifts ,

th e

c h a n g in g

e ffe c ts .

r e la tiv e
F or

d ecreased

d e ta ile d

o n ly

d is c u s s io n

u tiliz a tio n ,

see

pp.

ra tes

w ere

th e

w ere

u sed

an d w h eth er

o f

28

im p o r ta n c e
in

th e

p e rce n t.

a d ju s t m e n t s

fo r

th e
m an­

s im ila r ly

o f

a g r ic u lt u r e

e a r lie r

about

years

32 p ercen t

C o n s e q u e n tly ,

changes

in

th e

and 2 9 .

sam e w h e t h e r t h e
th e

on C en su s

a ffe c te d

e x a m p le ,

2 -l/2

com p a red t o

based

1 9 2 9 - 3 3 # n o n a g r i c u l t u r a l m a n -h o u rs d r o p p e d

a g r i c u l t u r a l m a n -h o u rs

degree

e ffe ct

w as

o n BLS m a n -h o u r s w e r e

th e

d r a m a tic

sectors,

th e

based

p e r io d s ,

had

tw o

in c lu d in g

e s tim a te s

an d n o n a g r ic u ltu r e
th e

th e se

in

7 7 .

21 /

b etw een

m a n -h o u r

c o m p o s ite s

c o m p o s ite

w ere

fix e d

as

or
o f

th e

19 0 9

o f

28

a g r ic u lt u r e
P a r tly

as

becam e

r e la tiv e ly

a r e s u lt

o f

p r iv a te

econ om y

I 929

th is

1933— g re a te r

to

e x c lu s io n

in

th e

e ffe c ts

th e

to ta l

s u b s ta n t ia lly
w ere

o c c u r r in g

in

in

ra te

in c r e a s e
c lu d in g

th e

in

ra te

over

to

lo n g -te r m

th e

d e r iv e d
th a n

on

th e

ra te

th a t

th is

cu rve

new

1958

im p o r ta n c e

s h ifts

in d e x e s
o f

cu rve

th e

averages

annual

arou nd

c o r r e s p o n d in g
H ere

a g a in ,

m ea su res.
a

g row th

ra te

in

th e

of

R e la tio n s h ip
d egree
per

to

lo w

w h ic h

S in c e
th e

th e

m a n -h o u r

w h ic h
z a tio n

an
is

over

m ade,

be

to

ch osen

as

m ovem ent
th e

th e

d a ta

(p a r a b o la )

fo r

so

as

1958

in ­

fitte d

h o ld

th e

co n sta n t,
th e

th e

h ow ever,
e ffe c t

d e r iv e d

o f

fr o m

a g r ic u ltu r a l-n o n a g r i-

and arou n d

3*2

p ercen t

w hen

7 )•

(ta b le

c o m p a r is o n s

ex­

o f

is

th e

th e

th a t

s m a lle r ,

m a n -h o u r

con sta n t

to

sectors

in c lu d in g

per

w hen t h e

h e ld

in d ic a te d

g e n e r a lly

o u tp u t

o n ly

a ls o

a ffe c ts

th e

tren d

fr o m

18 8 9 , w h ich u s e s w e ig h te d m a n -h o u r s ,

2 2 /

In

2 .9

th is

percen t

case,

are

cau sed

p r o d u c tiv e
w hen

th e

d u r in g

per

th e

year

in

c a p a c it y

econ om y

p e r io d s

is

o f

d e r iv e d

ir r e g u la r

p a rt by
is

ra te

and

v a r ia tio n s

b e in g

o p e r a t in g

at

h ig h

c y c lic a l

in

u tiliz e d .

p r o s p e r ity ,

sh ow s
o f

7 ).

(ta b le
The

1958

th e

O u tp u t
ra tes

and te n d s

to

o f
be

d e p r e s s io n .
o f

in

h ig h

su ch

o f

c a p a c ity

th e se

th e

th e

is

co n sta n t,

are

years

trou g h s

annual ra te

com p u ted

G a p a c ity U t i l i z a t i o n .

to

a llo w a n c e

to

percen t
h e ld

m a n -h o u r

e c o n o m y 's

ra tes

changes

cu rves

T ren d

o f

p e r io d s

th e

I t

in

o f

not

m a n -h o u r b u t

average

is

o u tp u t p e r
th e

th e

m a n -h o u r

u tiliz a tio n ,

d u r in g

year,
per

in

p e r io d
s e r ie s

a c c e le r a tio n .

m a n -h o u r t e n d s

c a p a c ity

tim e

o u tp u t p e r

flu c t u a tio n s

3*0
are

o u tp u t p r o p o r tio n s

The F a b r ic a n t

red u ced

fitte d
ch an ge

per

som e

w ith

m ay a f f e c t

per

n o n a g r ic u ltu r a l

fro m

c u l t u r a l m a n -h o u r p r o p o r t i o n s
th e

and

The

sam e w h e t h e r

fo u n d ,

a lr e a d y b e e n

of

a c c e le r a tio n .

average

se cto rs

p e r m a n -h o u r ,

a g r ic u ltu r a l

to ta l

p e r io d

o u tp u t

p a tte rn

th e

w ere

in

A lth o u g h

c y c lic a l
about

o u tp u t

has

one

th e

th e

19^5.

som ew h at

I f

o u tp u t

w as

th e

of

I t

red u ced

p e r io d .
o f

o f

lin e )

in

s e p a r a te ly .

1 9 3 0 's .

c y c le s

and

sh ow s an

o b t a in e d
The

1 9 1 7 ? 19 3 3

m a n -h o u rs .

p erce n t)

sector

gen eral

sa m e

o f

m a n -h o u r f o r

d ow n w a rd b u l g e

th e

p e r io d

The

s tr a ig h t

lo n g -te r m

s t ill

s h ifts .

a

th e

th e

e n tir e

(a c c e le r a tio n ).

o f

im p o r t a n c e

s h ifts ,

te rm s

(1 2

e ith e r

redu ced

e x c lu d e d .

r e la tiv e

e ffe c t

crea se

r e la tiv e

or

fo r

in

o u tp u t p e r

econ om y d u r in g

th e

sam e y e a r s ,

th e

ch a n ge

by

over

im p o r t a n t

s h ift,

s u b s ta n tia l d rop

s h ifts

a ffe c te d

(b a s e d
th e

th e

th e

o f

p r iv a te

m a n -h o u r

in c lu d e d

S h ifts
average

ra th er

th a n

o f

o u tp u t p e r

s h ifts

a

fo r

m a n -h o u r
w ere

sh ow ed

m u ch m o r e

m anpow er

fo r

lo n g
th e

average

u tiliz a tio n

ra tes

m ay a l s o

ru n .

W hen a

e ffe ct

o f

are

not

con sta n t

a ffe c t

th e

ra te

s t r a ig h t

changes

annual ra te

is

in

2 .3

tre n d
th e

lin e

d egree

p ercen t

fo r

fr o m

year

change

o f

in

is
o f

co m p u te d
c a p a c it y

b oth

th e

to
o u tp u t
in
u t ili­

B u reau

2 2 / F a b r ic a n t's w eigh ted man-hours s e r ie s i s d esign ed to remove th e
e f f e c t o f s h i f t s in th e im portance o f v a rio u s s e c t o r s . Solomon F a b rica n t,
op. c i t .




o f

29

L abor
th e
is

S ta tis tic s

sam e
not

su ch

as

th e

h e ld

as

and B u reau
average

con sta n t

o f

th e

C en su s b a s e d

annual ra te

7 ).

(ta b le

d e r iv e d

On t h e

th e

p a r a b o la ,

is

con sta n t,

th e

a c c e le r a tio n

ra te

a n im a l ch a n g e

fo r

19 5 8 b e co m e s

3*3

average
B IS

m a n -h o u rs

w o u ld

in d ic a t e

d u r in g
th e

and

th e

3*5

th a t

percen t

th e

d e p r e s s io n ,

a c c e le r a tio n

in

d e r iv e d

d ip s

fr o m

oth er

u tiliz a tio n

fo r
in

and th e

th e

hand,

in d e x e s

th e

su bsequ en t

o u t p u t p e r m a n -h o u r

w hen

one

th e

fo r

based

is

o f

th e

degree
In

th e

r o u g h ly

c a p a c ity
cu rves,

o f

th is

c a p a c ity

case,

s e r ie s

th e

based

on

on C en su s m a n -h o u rs .

c a p a c it y

r e c o v e r ie s

com p u ted

T h is

p r o d u c tiv e

redu ced.

p ercen t
o f

23 /

o f

h o ld in g

is

s e r ie s

le v e l

s e r ie s .

w hen u s e

u tiliz a tio n ,
c o n tr ib u te d

fo r

th e

to ta l

T h is

p a r tic u la r ly

in

p a rt

p r iv a te

to

econ om y.

Su m m ary
The

average

econ om y f o r
te rm
per

th e

p e r io d ,

an n u a l in c r e a s e
p o stw a r

1 9 0 9 -5 8 .

m a n -h o u r

d u r in g

w as n o t

u n iq u e

average

in c r e a s e

oth ers

in

by

th e

o f

tim e

o f

c a p a c ity

The

th e

o f

th e

th e

o f

seem s t o
o f

and v e r y
in

th e

o f

fo r

o f

in d ic a t e s

th e

th e

p e r io d s

ra te .

t o t a l p r iv a te

fo r

th e

m ov em en ts

th a t

s h o r t-te r m

th e

th a t

lo n g ­

o f

ou tp u t

p o stw a r p e r io d
in

w h ic h

Of cou rse,

th e

th e re

w ere

a ls o

lo w e r .
w h ic h

th e

p e r io d

r e la tiv e
th e

r e v ie w

lo n g -te r m

s ta tis tic a l

o f
a

lo n g -r u n

are

e x p e r ie n c e

in flu e n c e d

d e s c r ip tio n

th e

econ om y

to

w h ic h

is

o f

th e se

a

can b e

very

is

m ov em en ts w i t h i n

im p o r ta n c e

s ta tis tic a l
ra te

in d ic a te s
o u tp u t p e r

have

th e

e x a m in e d .

la r g e

e n tp lo y e d ,

com p on en t

sectors,

e x p e r ie n c in g

o f

d e s c r ip tio n ,

in c r e a s e

th a t

p e r io d .

som e

m a n -h o u r

r e s u lte d

fo r

th e

and

e x ten t
th e

le n g t h

sectors,

th e

d egree

fin a lly ,

in

p r im a r ily

in

sector

th e

d id

r e la tiv e

la te r

not

th e

th e

th e

th e

o f
par­

im p o r ta n c e

23/
r a tio

S in c e
o f

a p p r o x im a tio n

e s t im a te s

e m p lo y m e n t t o
is

a ls o

u sed

L o n g T erm P r o j e c t i o n s ,
(p u b lis h e d
te c h n iq u e

b y P r in c e to n
d iffe r s




a ls o

o f

m a jo r

c o n t r ib u t e d

th e
o f

o f p h y s ic a l
th e
by

la b o r
John W.

C o n fe r e n c e
U n iv e r s ity

s lig h tly .

on

th is

in

and

changes

c a p a c ity

fo r ce

is

K e n d r ic k
R esearch

P ress,

in

an

a c c e l­

th e
In

in

u tiliz a tio n

u sed
in
in

as

an

th e

o f

e a r lie r

con tra st,

a c c e le r a tio n .
in c r e a s e

The

p e r fo rm a n ce

m o d e r a te ly
In

d egree

tow a rd

a w h o le .

p e r io d .

se cto rs

to

secon d

w o r k in g

change

s u b s ta n t ia lly

th e

a d d itio n ,
th e

d egree

g ro w th .

th e

u tiliz a tio n

o f

v a r io u s
as

average

p e r io d

s p e c t a c u la r

rose

k in d

lo n g -te r m

have been

econ om y

fr o m

years

sh ow t h i s

th e

lo n g -te r m

F ittin g

fa c to r s

econom y— a g r ic u lt u r e --w h ic h

r a p id ly

n o n a g r ic u ltu r a l
c a p a c ity

o th er

th e

p o s t - W o r ld W ar I I

d a ta

ra te

o f

w as

th is

w h ich

m a n -h o u r

th e m s e lv e s .
fo r m

sector

w ere

in

per

a

cen tu ry

c o n s id e r e d ,

sh ow s

in c r e a s e d

s h ifts

in

lin e ),

to

e r a tio n

o f

b e in g

s im p le s t

th a t

cu rves

is

fo r

fo r m

h a lf
th a n

w ays

tre n d s

o u tp u t

sam e t i m e ,

th ere

average

u tiliz a tio n
d a ta

la s t

h ig h e r

v a r io u s

s h ifts

(s tr a ig h t

years

th e

o f

w h ich

tic u la r

b e lo w

w as

p a r tic u la r

e ffe c t

one

are

m ea su res

th e

and th a t

w h ic h

T h ere
The

A t th e

in

1 9 V f- 5 8 , w as h ig h e r th a n

p e r io d ,

are

o v e r a ll

not

a v a ila b le ,

a p p r o x im a tio n .

N a tio n a l P r o d u c t iv it y
In com e

P r in c e to n ,

an d W e a lth ,

195*0

a lth o u g h

ra te

T h is
and

its

M ay 1 9 5 1 >
h is

30
An im p o r ta n t
te rm

p o in t

c a lc u la tio n s

p resen ted

1 9 0 9 -5 8 .
and th e
c a lly

s ta tis tic a l

ex te n d e d

e c o n o m ic
or

A ch an ge

and

e s t im a te d ,




in to

in

to

th e

be
is

c o n s id e r e d
th a t

p e r io d

d e s c r ip tio n .
th e

fu tu re

in s t itu tio n a l
m ovem ent

o f

th e y

covered

in

a p p ly

c o n d itio n s
com p on en t

o n ly

in flu e n c e s

M oreover,

w ith o u t

c o n n e c tio n

th e se

a p p r o p r ia te
w h ich

sectors

to

th e

th e

th e

v a r io u s

p e r io d

degree

tren d s

th e se

a c c e le r a tio n

can n ot b e

g row th ,
v a r io u s

lo n g ­

m ea su res,

o f

c o n s id e r a tio n

m ay a f f e c t
under

w ith

o f

and

m a th e m a ti­
th e
th e

v a r io u s
p r o b a b le ,

c o n d itio n s .

31

F A C T O R S A F F E C T IN G OUTPUT P E R MAN-HOUR

T e c h n o lo g y
A m a jo r
th e

fa c to r

in flu e n c e

m a te r ia ls ,
s c ie n c e

o f

in

th e

o f

o f

2 0 th .
rose

The

decade

th e

te c h n ic a l
goods

h e ld

th e

1920*s ,

e x te n s io n

o f

th e

c h e m ic a l

in d u s tr y ,

over

n e a r ly

sta rte d
The

in

produ cer

goods,

w ere

S u ch

ch an ges
fo r

to

in d u s tr y
changes

sh ow s t h e

th a t
a ls o

in v e n tio n s

th e

have

have

p r io r

im p o r ta n t

am ount
o f

and

o f

goods

T e c h n o lo g ic a l

ad van ces

and

are

s u m m a r iz e d u n d e r

s ix

broad

s in c e

c a p a c ity
d lin g ;

o f

a u to m a tic

g re a te r

h a n d lin g ;

u se

g re a te r

e le c tr o n ic -d a ta

in

tren d s:

tr a n s fe r

m a c h in e s ,

d e s ig n e d

fo r

m ore

The
u sed

e le c tr o n ic
a u to m a tic

g ro w th

th e

c iv ilia n

m ass p r o d u c t io n
d e v e lo p m e n ts

m a n u fa c tu r in g

o f

te c h n o lo g ic a l

u n e c o n o m ic ,

d e v e lo p e d

19^7

in

and

se cto rs

la b o r

and

in d u s tr ie s .

and

som e m a jo r

fo r

th ro u g h

con su m er

s e r v ic e

p rocesses

o f

o f

a d a p te d

new p r o d u c t s

a ffe c tin g

d iffe r e n t
o n ly

fu e l,

o f

1930’ s,
W h ile

o f

th e

flo w

e q u ip m e n t .

d e v e lo p m e n ts
o f

th e

econ om y.

r e q u ir e m e n ts b u t

and m a t e r ia ls

a n d e q u ip m e n t

fa c to r s

te rm

in

o f

con veyors
in te g r a tio n

c o n tr o l;

" a u t o m a t io n ,"

com p u te rs,

o p e r a tio n

o f

fu rth e r

d e s c r ib e

u sed

and f o r

a

in tr o ­
m ay b e

th e
in

speed

o f

han­

p r o c e s s in g
e x te n s iv e
of

ad van ces

c o n tr o ls

p o s s ib le .

and

m a te r ia ls

c o n tr a c tio n

te c h n o lo g ic a l
h ith e r to

have been
in d u s tr ie s

an d m ore

and fe e d b a c k

th a n

th a t

a v a r ie ty

im p r o v e m e n t

u se

a u to m a tic
to

in

fu r th e r

g re a te r

in s tr u m e n ta tio n ;

o fte n

o f

produ ced.

processes

o f

and th e

in

m a n u fa c ­

an u n p re ce d e n te d b a c k lo g

and

not

in

e le c tr ific a tio n

19 19 *

of

p r o d u c tio n

e q u ip m e n t,

m a c h in e r y ;

m a n -h o u r

c o n s id e r e d

s in c e

th e

te c h n o lo g ic a l

and good s

W o r ld W ar I I

im p o r t a n t

a p p lic a t io n
is

in

im p lic a t io n s

p r o c e s s in g .

" a u t o m a t iz a t io n ,"




o f

to

s e r v ic e s

19 ^ 7

d u ced

m ade

c u m u la tiv e

m a n -h o u r

m ade i n

o f

a n d c o n tin u e d

m any f i e l d s .

w id e s p r e a d ,

a g r ic u ltu r e ,
been

in

im p r e s s iv e

pu rp oses,

has been

c a p ita l,

and

an

p r e v io u s ly

s u b s ta n tia l p r o g r e s s

in tr o d u c e d

q u a lity

ch an ge

per

th a t

th e

a n d e q u ip m e n t

w ere

F a ce d w ith

c iv ilia n

upon

new

a p p lic a tio n
ch a ra cter.

cen tu ry

d e p r e s s io n

p la n t

o u tp u t

tw ic e

th e

in d u s tr ie s ,

th e

c u m u la tiv e

h a s w itn e s s e d

in d u s tr y .

T e c h n o lo g ic a l

E x te n s iv e

8

u sed

d e v e lo p m e n ts

research .

T a b le

19^7

A m e rica n

about

in

19 th

e x te n d e d

th e

o f

new p r o d u c t s ,
o f

d y n a m ic

o u tp u t p e r

ad van ces

r e s u lt

ad van ces

19 ^ 7

in

s in c e

a

m a n -h o u r h a s b e e n

m ass p r o d u c t i o n ,

d u r in g

in

a

b u ilt

th e

w hen
of

w ere

te c h n ic a l

as

decades,

in d u s tr y

m ilita r y

T h us,

le v e l

p e r io d

in n o v a tio n s
dem and,

a

p r o d u c tio n

in

o f

r e s u lt

in d u s tr y

and a u to

E ven

im p r o v e m e n ts

im p r e s s iv e

fo u r

fro m

in

ba ck

o f w ar m a te r ia ls .

th e

o f

began

per

flo w

a

19^7 have b een

th a t

th e

in n o v a t io n s

as

s in c e

r a t i o n a l p la n t m a n a gem en t.

W o r ld W ar I I

The

e q u ip m e n t

saw

r is e

o u tp u t

A m e rica n

p r o d u c tio n

s h a r p ly ,

o f

g iv e n

ad van ces

m a c h in e

g ro w th

in n o v a t io n s .

an d new

e n g in e e r in g h a s

in d u s tr y ,

m ore

lo n g -te r m

te c h n o lo g ic a l

T e c h n o lo g ic a l

tu r in g

th e

new p r o c e s s e s ,

and

progress

in

th a t

th e

su ch
are

and

u se

o f

w ord
as

T a b le

8.

Som e i n d i c a t o r s

o f

te c h n o lo g ic a l

D ia l

3.

1950

1953

1952

1953

1954 1955

1956 1957

1958

1 .4

1 4 .7

2 0 .2

2 7 .8

3 5 .9

4 4 .3

5 5 .7

6 5 .0

7 2 .1

7 9 .2

8 5 .9

9 0 .0

9 3 .4

5 5 .7

6 5 .6

6 8 .1

7 3 .0

7 5 .5

7 7 .4

7 9 .1

8 1 .3

8 4 .0

8 7 .0

8 9 .8

9 2 .1

9 3 .8

2 8 .0

3 1 .1

3 5 .2

4 0 .0

4 2 .1

4 5 .0

4 6 .8

4 9 .3

5 2 .0

5 0 .8

5 0 .0

4 5 .4

6 0 .7

6 4 .3

6 7 .0

6 9 .4

7 3 .1

7 5 .5

7 9 .6

8 4 .0

8 4 .6

8 4 .0

8 4 .3

8 4 .9

2 .6

2 .8

3 .1

3 .4

3 .7

3 .9

4 .1

4 .2

4 .3

4 .5

4 .6

4 .7

o f

(d ia l

as p ercen t

S y stem

C a ta ly tic

te le ­

o f

a ll

p h o n e s ) . ...............

c r a c k in g

c r a c k in g

in

o il

(c a ta ly tic

as

p ercen t o f

crack ed

g a s o lin e

c a p a c ity
M e c h a n ic a l l o a d i n g

in

m in o u s -c o a l m in in g

b itu ­
(p e r ­

cen t o f

u n d ergrou n d

d u c t io n

m e c h a n ic a lly

pro­

lo a d e d
5.




an d 1 9 4 7 -5 8

lo c o ­

p ercen t

r e fin e r ie s

4.

1939

1 .4

as

te le p h o n e s

to ta l

in d u s tr ie s ,

1949

n u m b e r ) ............... .................

phones
B e ll

S ta tes

3 1 .0

m o t iv e s

2.

U n ite d

1 /5 .1

D ie s e l lo c o m o tiv e s
(d ie s e l e le c t r ic
to ta l

in

1947 1948

1939

Ite m

1.

changes

T ra ctors
o f

on

stea m

fa r m s
and

(e x c lu s iv e

garden )

(in

m illio n s

1 /

As o f

J a n u a ry 1 ,

1941*

S ou rces:
L in e

1.
3.

In te rsta te
an d 4*

C om m erce C o m m is s io n .

U .S .

B u reau

o f

M in e s .

2.

F ederal

5.

U .S .

C o m m u n ic a tio n s

C o m m is s io n .

D ep a rtm en t o f A g r ic u lt u r e *

33

In fo r m a tio n
op m en ts
is

as

s t ill

a ctu a l
L evel

fr a g m e n ta ry

or
o f

p o te n tia l

o u tp u t

th e

lo n g

C a p ita l
per

ru n

and

a n d m ore

in

in

stock
v a lu e

te rm s,
o f

of

o f

c a p ita l

but

p la n t

p la n t
o f

c a p it a l

in c r e a s e s

stock .

w as

p er person

d e v e l­

th e ir

in d ic a te d

w as n o t

m ent p e r

person

2.
e m p lo y e e

over

(ta b le

d a ta )
and

2k/
In s titu te ,

fr o m

lo n g

d a ta

see

ta b le




th e

to

about

about
and

run ,

That

is ,

life

37

a

w h ile

1 9 2 5 -2 9

on

c a p ita l

9 •

has

not

stock

are

has

1950

m a n -h o u r
d e c lin e

stock

rose

H ow ever,

a m a jo r

th e

c o m b in e d
(ta b le

n o te d

9 )•
becau se

and

th e

h ig h

becau se

th e

F or

e s tim a te s
The

e x a m p le ,

p o stw a r
e q u ip ­

19 5 &.

and
have

r is e n

in

average

fa s te r

82 p e rce n t,
9 percen t

th e

M a c h in e r y

c iv ilia n

to o

in

fa c to r

tw ic e

stock

th a t

p e r io d .

in c r e a s e d

su b sta n ­

a lm o s t

la r g e ly

p o s s ib ly

h ow ever.

th e

fro m

r is e n

1930’ s

p o stw a r

th e

abn orm al u t i l i ­

h ig h e r
th e

m ade

fo llo w s :

s h o u ld b e

b etw een

195& .

been

are

o f

at

d o lla r

are

(a s s ig n e d

th e

m a n -h o u rs
to

as

fu ll,

con sta n t

so

years,

per

in

o f

and

v a lu e s

its

C o m p a r is o n s

1 9 2 5 -2 9

th e

d ed u cted

195^ w as

It

of

p la n t

is

in

years

c a p ita l

average

sta ted

e q u ip m e n t u s e d

stock

r e s u lt

o f

by
th e

at

v s ilu e

p o stw a r p e r io d ,

p ercen t

to ta l
as

in c lu d e d

p r o d u c tio n

im m e d ia te

e a r lie r

In

e s tim a te d

person

years

o f

and

v a lu e

years

o n e -th ir d

th e

p o stw a r

w ar

th e

e m p lo y m e n t t r e n d s

The

w as

d u r in g

in d ic a te d

h ig h e r ,

s lig h tly

and t o t a l p r iv a t e

th e

in

w ork er.

p o in t.

The

s u m m a r iz e d

engaged

o n ly

"n o r m a l"

is

e lim in a t e

m ay b e

th e

rem oved.

E q u ip m e n t p e r

e a r ly

fo r

p la n t,

1 0 ).

to

d e p r e s s io n

in c r e a s e d

35 p ercen t

in c r e a s e d

stock

w ar y e a r s .

th e

is

per

th is

e n tir e

prew ar p e r io d

as

th e

c o n fin e d

th e

th e

th e

fo r

as

in

a c c o m p a n ie d b y

tren d s

on

in c r e a s e

b oth

c a p it a l p e r w ork er

e tc.

stock

in

v a lid

E q u ip m e n t,

person

th e
life ;

d u r in g

r e g a rd in g

in c r e a s e

d e fin e d

c a p its il

th e

person

th e

agreem en t

is

is ,

person

w as

fix e d

The

S ta tes,

a v a ila b le

o f

in v e n to r ie s ,

r e s u lts

occu rred
lo w

u se

h a v in g b e e n

so

1 9 2 5 -2 9 •

lim ite d

have been

m a n -h o u r

su ch

o f

O u tp u t.

U n ite d

has been

p r o b le m s ,

c lo s e

The

w ith

The

per

th e

u s e fu l

19 ^ 1

year

p e r io d

c a p it a l

o f

stock

changes

1 9 ^7 - 5 6

in c r e a s e s

a s s u m p t io n s

C en su s

p r ic e

in v e s t m e n t w a s

m ay n o t

o f

e v a lu a t io n

th e

fix e d

That

its

2k/

life .

a n d e q u ip m e n t
th e se

p r o d u c tio n

per

o f

o f

in

p e r io d ,

c a p ita l,

v a lu e s .

and th e

th e

of

an

e ffe c ts

c o n v e n t i o n a l e q u ip m e n t ,

M a n -H o u r s ,

econ om y

s ta tis tic a l

C a p i t a l e q u ip m e n t p e r

h ig h

m ore

fo r

W ar I I

of

c a p ita l

year

years

s in c e

as

th e

gross

e ffe c t

1 0 0 ),

1.
tia lly

a ctu a l

o f

econ om y.

E m p lo y m e n t,

r e a s o n a b ly

w o r k in g

each

to

m ea su re

and

in

u s e fu l

p o stw a r
o f

z a tio n

M ost

its

th e

th e

v a lu e

needed

th e

p r iv a te

am ount

fo llo w s ,

s ire
fo r

th e

th e

are

e x c lu d in g

end

and th e

r e s u lts

is

fo r

p o s t-W o r ld

m any c o n c e p t u a l
e s tim a te s
w h ic h

th e

of

a p r e c is e

e q u ip m e n t,
th e

u se

th e

stu d y

R e la tio n

th e

d is c u s s io n

gross

o f

to

im p lic a t io n s

in

d e r iv in g

in v o lv e s

o f

e x ten t

com p a red

m a n -h o u r

s u b s t a n t ia l g ro w th
A lth o u g h
v a r io u s

th e

In v estm en t

F ix e d
in

about

a u to m a t io n ,

h ou rs

e m p lo y m e n t
(b a s e d

d iffe r e n c e

in

th e

th a n
per
on

b etw een

p o stw a r p e r io d .

and A llie d

P rod u cts

u
T a b le 9 *

In d ex es

o f

person s

engaged

c a p it a l p e r

in

p r iv a te

person ,

1941

in d u s tr y

and

stock

o f

fix e d

and 1 9 4 7 -5 6

(1 9 2 5 -2 9 * 1 0 0 )
S tock
P erson s

T ear

o f

fix e d

(c o n s ta n t
T o ta l

engaged

S tock

c a p ita l

P la n t

(2 )

(3 )

(4 )

1 9 4 1 ................

111

1 9 4 7 ................

124

115
126

114
116

1 9 4 8 ................

127

132

1 9 4 9 ................

138

1 9 5 0 ................

125
128

1 9 5 1 ................

129

143
150

1 9 5 2 ................

129

1 9 5 3 ................

131
128

1 9 5 4 ................

S ou rces

C o l.

D .C .,
w age

1957.
and

u n p a id

C o ls .
fro m
N o.

d a ta
23,

(6 )

(5 )

E q u ip m e n t

(2 )

(5 )

(7 )

.

(2 )

(* )

118

104

103

106

102

94

115

104

121

170

n o

94
97

124
136

123

183

112

96

143

197

116

97

153

211

121

131

124

99
100

164
172

169

134
136

225
238

132
132

105

186

247

103

187

264

135

103

196

174
182

139

2 . — E s tim a te s

w ork ers,

1 9 2 5 -2 9

a e tiv o

and 1941

P r o d u c tiv ity ,

fro m

ta b le

A -2 ,

p r o p rie to r s

o f

based

P r ic e s
lin e

on

and

7 .

ta b le

2

In com es.

P erson s

u n in c o r p o r a te d

o f

th e

W a s h in g to n ,

engaged

in c lu d e

b u s in e s s e s ,

and

w ork ers.
and A llie d

S t a t i s t i c a l M o te s

A ugust 1955




♦

125
128

3 - 5 . — M a c h in e r y
in

(4 )

119

E s tim a te s 1 9 4 7 -5 6

fa m ily

(2 )

143
157

C o m m itte e r e p o r t ,

s a la r y

♦

163

135

J o i n t E c o n o m ic

c a p ita l

156

132

1 9 5 5 ................
1 9 5 6 ................

fix e d
P la n t

T o ta l

E q u ip m e n t

(3 )
(1 )

o f

p er person

1953 p r ic e s )

as

r e v is e d .

to

P ro d u cts

C a p ita l

In s titu te .

G o o d s R e v ie w ,

In d exes

W a s h in g to n ,

com p u ted
D .C .,

39

T a b le

10.

In d exes

o f

n a n -h o u r s
per

p r iv a te
1941

in d u s tr y

and

stock

o f

fix e d

c a p ita l

end 1 9 4 7 -5 6

( 1 9 2 5 - 2 9 * 3 LQQ)_____________________
S t o c k 6 i f i x e d c a p i t a l p e r m a n - h o u r ____________
T o ta l
E q u ip m e n t
P la n t

T o ta l
p r iv a te

T ear

in

n a n -h o u r,

m a n -h o u rs
(2 )

( 1 ) _______

_

__

( 3 ) ________

U )

( 5 ) ___________

............... ..

1 9 a .................................
1 9 4 7 ..................................

99

116
120

115
110

119

105

1 9 4 * .................................

107

123

111

147

1 9 4 9 .................................

104

163

105

133
136

116

1 9 5 0 .................................

117

174

1 9 5 1 .................................

107

140

117

184

1 9 5 2 .................................

107

146

120

197

1 9 5 3 .................................

107

152

122

210

1 9 5 4 .................................

103

164

130

1 9 5 5 .................................
1 9 5 6 .................................

107

163
168

127

231
231
2U2

S ou rce:
hour

s e r ie s

K e n d r ic k *

109

C o l*
in

2 . — 1 9 2 5 -2 9

1947

1 9 4 7 -5 6 ,

C o ls .

to

ta b le

In d exes

11.

and 1941

A -2 ,

2

o f

to ta l

o f

T a b le

128

t h e u n p u b lis h e d

3 -5 .— C o l.

real

lin e

d iv id e d

d e r iv e d

p r iv a te

c o ls *

real

3 -5 ,

F ix e d c a p it a ;
T o ta l

p r iv a te

1941

(2 )

C en su s

c o m p ile d

based

m an­

b y John V .

9*

and fix e d

c a p it a l

per

d o lla r

en d 1 9 4 7 -5 6

__________
d o lla r o f

real

p r iv a te

_________
produ ct

E q u ip m e n t

P la n t

c a p ita l

produ ct
(1 )

per

fix e d

rea l

T ear

ta b le

produ ct

p rod u ct,

_____________________________________________________( 1 9 2 5 - 2 9 * 3 LQ 0)
T o ta l

by lin k in g

m a n -h o u r d a t a

1 6 .

in to

p r iv a te

136

1 4 1 _________

________ ( 3 )

1 5 1 _______

1 9 a .................................
1 9 4 7 .................................

134
161

86

85
72

88

78

1 9 4 8 .................................

167

79

71

1 9 4 9 .................................
1 9 5 0 .................................

166

83

73

181

69

1 9 5 1 .................................

192

79
78

94
102
101

65

103

1 9 5 2 .................................

198

107

1 9 5 3 .................................

208

79
78

65
63

108

1 9 5 4 .................................

205

82

65

116

1 9 5 5 .................................
1 9 5 6 .................................

223

78

61

111

79

61

115

S ou rce:

C o l.

C u rren t B u s in e s s ,
C o ls .

229
2 .--U .S .
1959,

3 -5 .— C o l.




In com e

ta b le s

2 d iv id e d

and

1 -1 3
in to

end

O u tp u t,
1 -1 6 ,

c o ls .

a

S u p p le m e n t t o

U .S .

3 -5 ,

89

th e

D ep a rtm en t o f

ta b le

9*

S u rvey o f

C om m erce*

ed

3.
F o r t h e l o n g - r u n p e r i o d , t h e r a t e o f i n c r e a s e i n o u t p u t (G N P ) e x c e e d ­
th e in c r e a s e in t o t a l c a p it a l.
In th e p o stw a r p e r io d , h ow ever, o u tp u t an d

to ta l

stock
In

been

d o lla r

o f

th a t

per

s ta b le

in

th e

has

in

in c r e a s e d

even
2.

s e r v ic e

e q u a lly

w e ll

3.

in

to

th e

o th e r

e q u ip m e n t

c a p ita l
la r g e

a m o u n ts
u sed.

th e

v a lu in g

m a n -h o u r

c a p it a l
o f

and

r a tio s ,
w ith

r e m a in e d
th is

to ta l

m eans
c a p ita l

h ou r.
c o n c e r n in g

m u st b e
stock

th e

r e fle c te d ,

p o stw a r p e r io d ,

ru n

k ep t p a ce

d a ta

q u a lity

lo n g

have

E q u ip m e n t p e r

in

th e

p o in te d
co n sta n t

e q u ip m e n t.

th e

s ig n ific a n c e
ou t.

in d e x

d o lla r s

I f

o f

does

th e se

e q u ip m e n t w o u ld

o b ta in e d

life ,

o f

th e

a lr e a d y

o f

in

o f

u se

th e

sta n d a rd
o f

in

u se

th e

e a r ly

w r itte n

becom es

e x ten t

o f

or

w as

and
w h ic h

su ch

as

does

p o stw a r y e a r s
fo r

in

th e

r e c e iv e d

c o n s id e r ­

a p p lie s

is

o f

fo llo w e d

th e

o f

and

v a lu e

th e

u n d ersta ted
p u rp oses,
o f

in

c o n tin u e d

becau se

w ar

a p e r io d

s c r a p p in g

th e

th ro u g h

h ow ever,

r e fle c t

a c c o u n tin g

im p o r ta n t

p re m a tu re

have

scrap p ed

d u r in g

cover

p roced u res

not

e q u ip m e n t

not

la b o r .

a c c o u n tin g

com m o n

o ff

does

e q u ip m e n t

lim ita tio n ,

c a p ita l

d e p r e c ia te d ,

e q u ip m e n t,

b u t th e

T h is

p r o d u c tio n ,

v a lu e

stock

p la n t

te c h n iq u e s ,

p o stw a r p e r io d .
fa c to r s

c a p it a l

fro m

w ere

r a p id

o f

becau se
s t ill

te c h n o lo g ic a l

e q u ip m e n t i n

re ce n t years

know n.

O b s e r v a tio n s .
c o n c lu s io n
in flu e n c e
S ta tes.

th a t
in

th e se
1.

th e

am ong

r e q u ir in g
e q u ip m e n t

d a ta

o u tp u t,

in




th e

o f

in

r e la tiv e

r e la t io n

to

in c r e a s e d

o u tp u t p e r

som e

is

have

are

th e

r e la tio n

and la b o r

been

p a rt

to

in

th e

o f

W h ile

th e
fa c t

th a t
th a n

th e

A n o th e r

in d u s tr ie s

w ith

th e

th e

a m a jo r
U n ite d

d e m o n stra te d

c o m p le t e
m ay b e

m ovem ent o f

h ig h e r
o f

ju s t ify
been

in

th e

o b s e r v a t io n s

r e la tiv e ly

e q u ip m e n t.

to

have

m a n -h o u r

in p u t.

c h a r a c te r is tic s
to

appear
stock

c o n c e r n in g

gen eral

d iv e r g e n c e

in

im p o r t a n c e
p la n t.

c a p ita l

q u e s t io n s

som e

th e

a ttr ib u te d

p r o b a b ly ,
p la n t

in

g iv e n ,

ap paren t

a b o v e w o u ld

in c r e a s e s

c a p ita l,

p o stw a r p e r io d

le s s
in

s u m m a r iz e d

r a is e

can not be

T h is m ay b e

im p o r ta n t,

in c r e a s e

th e

Im m e d ia te ly
th e

tre n d s

s ig n ific a n t

a c h ie v e m e n t

q u e s tio n s

e q u ip m e n t .
in

The

th e

H ow ever,

r e la t io n s h ip

co sts

in to

r e la t io n s h ip s

and th e

th e

o b s e r v a t io n s

m ea su rem en t o f

O b s o le s c e n c e

in n o v a t io n ,

M ore

in

1 1 ).

(ta b le

e q u ip m e n t.

lo n g -r u n

hour has

o f

a d e q u a te ly

O v e r -in te n s iv e

a c tu a lly

b e in g

to

th e

becau se

u s e fu l

o b s o le s c e n c e .

not

fo r

im p r o v e d

t h a t m ay b e

F in a lly ,

e s tim a tin g

is

som e

lim ita tio n s

m ore

th e

ra te

th ese

and

e q u ip m e n t p e r

m anagem ent a n d o r g a n iz a t io n

a tte n tio n

o f

be

F u rth erm ore,

im p r o v e d

u se

c o u ld

th a n

m a k in g

th a t

d e c lin e d

per

sam e

p la n t

T r a n s la te d

le s s

th e

c le a r
in

b oth
has

o u tp u t

u sed

r e fle c t

is

th e

h ig h e r .

in c r e a s e d
a b le

B e fo r e

The p r o c e d u r e

a d e q u a te ly

in

years.

c e r ta in

i t

o u tp u t

p o stw a r p e r io d ,

im p r o v e m e n ts
be

o f

m oved a t

ch an ges

in c r e a s e d

recen t

tren d s,

1.
n ot

com p on en ts,

d o lla r

h ou r b u t has

th e se

have

c o m p e n s a tin g

L im ita tio n s .
o f

c a p ita l

th e

by

ou tp u t

p la n t

fa ir ly

fix e d

s tu p in g

a c h ie v e d

w h ile

per

o f

an sw ers
m ade.

p la n t

and

c o n s tr u c tio n
e q u ip m e n t

c h a n g in g
fa c to r

co sts.

te c h n o lo g y

m ay b e

th e

h ig h e r -th a n -a v e r a g e

3T

2.
hy

The

ch an ges

p la n t

and

th e re b y

its

th e

th e

per

d e c lin e

c a p it a l

h ow ever, b y

an

b y w h ic h

one

m any f a c t o r s

In
is

th e

o f
th e

in to

sta n d b y

u sed

per

E le c t r ic
It
w ork er

of

th o se
o f

has

th e
as

in

p la n t
T h is

gone

up

m ay h a v e b e e n

th e

in

day

in

o ffs e t,

in

o u tp u t

per

s im p le

fa c to r

o u tp u t

average

th e

d e c lin e

o f

no

in d ic a t e d

are

o f

in

w e e k ly

above

is

p e r u n it

h ou rs

m u st b e

o p e r a tio n s

a ls o

a ffe c te d

fro m

its

o f

c a p ita l

w ork ed , b eca u se

ta k en

in to

c o n s id ­

and

th e

im p o r ta n c e

by

th e

a c tu a l u se

a v a ila b ilit y .

M c G r a w -H ill P u b l i s h i n g
d u r in g

m ean t h a t

som ew h at

in d ic a te d

in s ta n c e ,

th e

m ea su res

are

o f

a

ch a n ge

th e

in

in

p r o p o r tio n
ad van ces

a n d e q u ip m e n t

s u ffe r

a v a ila b le

a

T h ere

m u ltip le -s h ift

w o u ld

m a n -h o u r

p o r tio n

th a t

ou tp u t,

o f

le s s

th e

th a n

th e

stock

th e

C o.

in d ic a t e

p o stw a r
o f

r a tio

th a t

p e r io d

c a p ita l
o f

w h ic h

E s tim a te s
has

gone

a c tu a lly

c a p it a l

stock

M a n -H o u r

a lr e a d y b e e n

o f

o f

o f w ork .

h ou rs

r a tio s

per

ty p e s

d ecrea se

d is tin g u is h e d

or

io u s

am ount

r e s u lte d

in c r e a s e d

s te m m in g f r o m

d e c lin e

to

an a d d itio n a l

a ffe c te d

hour

w ork er.

E n ergy P er
has

T h is

in

a ls o

c a p ita l.

th e

h ow m u ch o f

E c o n o m ic s

c a p a c ity .

per

to

are

a d d itio n a l

in d u s tr ie s .

in c r e a s e

w ork er

a v a ila b le

o f

in

r a tio s

each

o f w o rk m ay h a v e

due

o u tp u t

e x te n t

c a p it a l

D ep a rtm e n t

of

h ou rs

th e

c o n n e c tio n ,

fix e d

p a rt

in

by

th e

u n it

r e d u c tio n

a d d itio n

as

process

th is

m ade

by

in

su ch

c o n tin u o u s

th e

fo r

per

s p e a k in g ,

r e s u lts

u tiliz e d .

m ay e s t im a t e

a cco u n te d

u sed

in

not

c a p i t a l p e r m a n -h o u r

G e n e r a lly

c a p it a l

in c r e a s e

fo llo w in g

e r a tio n ,

o f

is

m a n -h o u r
can b e

are

o u tp u t

u n it

and

h ou rs.

e q u ip m e n t

s e c u la r

o u tp u t

w h ich

w o r k in g

r a is in g

The
th e

c a p ita l-o u tp u t

in

p la n t

stock

o f

th a t

fro m

based

th e

e s tim a te s

a num ber

on

an d e q u ip m e n t,

o f

e s t im a te s
and

in

th e

o f

fix e d

lim ita tio n s .
o f

"n o r m a l"

secon d,

c a p ita l

In

th e

u s e fu l

life

r a tio s

th e

r e fe r

o f

c a p i t a l , a n d m ay t h e r e f o r e

be

a ffe c te d

by

ch an ge

stock

c a p ita l

per

fir s t

One m e a su re

o f

p r o d u c tiv e

a c tu a lly

u tiliz e d .

in

var­

to
th e

pro­

c a p a c ity

u t i l i z e d , w h ic h b y p a s s e s som e o f t h e s e p r o b l e m s , a l t h o u g h a d d in g som e o t h e r s ,
i s t h e am ount o f k ilo w a t t h o u r s o f e l e c t r i c e n e r g y con su m ed p e r p r o d u c t i o n
w o r k e r m a n -h o u r .
a ls o

m ore

a c c o m p a n ie d b y
E s tim a te s
per

T h is

p o w e r fu l

and

p r o d u c tio n

th e

n e a r ly

en ergy

have

prepared

fo r

been

m a n -h o u r, b o t h

p r im a r y m e t a ls
m a n -h o u r

and

are

r e fle c ts

m a c h in e r y t o

e le c tr ic

w ork er




m ore

e ffic ie n t

in c r e a s e d

p r o d u c tio n w ork er

e x c lu d in g

m easu re

m a n u fa c tu r in g
fo r
in

a ctu a l u t iliz a t io n ,

e x te n t

th a t

th e se

and

fa c to r s

are

c o n s u m p tio in .

(a )

c h e m ic a l

sh ew n

th e

a ll

s h o w in g

in d u s tr ie s

in d u s tr ie s .

ta b le

12 .

The

th e

KWH c o n s u m e d

c o m b in e d ,
r a tio s

o f

and

(b )

KWH p e r

T a b le

12.

E le c tr ic

en ergy

(K W H )

con su m ed p e r p r o d u c t io n

s e le c te d

A ll

T ear

P r im a r y m e t a ls

m a n u fa c t u r i n g

1929 ....................
1939 ....................

B u reau

fig u r e s

e le c tr ic

19 2 9

E le c tr ic

12.9

h e a tin g
th e

In

th e se

C en su s,

la tte r
be

e x c lu d e s
th a n

c o m p le t e

6 .2

a ll

b a s is

p ercen t

in

to

s im p ly
heat

to
in

th e

la tte r

a lm o s t

d r iv e

in

th e

It
a ll

a

or

o f

in c r e a s e

as

fo r

arc

c o n tin u e d

an

in c r e a s e s

in d ic a t o r

is

s te e l,
per

am ount

lig h tin g ,

and

It

e le c tr ic ity
th e

and

s ig n ific a n t

r e q u ir e m e n t s
be

and

p r o d u c tio n

300 p e r c e n t h ig h e r

over

m o t io n .

a ls o

19U 7,

th a n

19 3 9 .

m e t a ls ,

in d u s tr ie s ,

1939,

1957.

KWH c o n s u m e d p e r

a p r o b le m
th a t

s h o u ld
th e

in

a lu m in u m ,

o f

en ergy

By 1957,

m a c h in e r y
o f

p r o d u c in g

c o n s u m p tio n

above

90 p e rce n t.
d a ta ,

e x te n t

tre a tm e n t

th a n

th ro u g h

s u b s ta n tia l

th a n

p resen ts

th e

M a n u fa ctu r e s ,

c o m b in e d w as

h ig h e r

c o n s u m p tio n

u ses,

th e se

o f

19k9

in d ic a te

in d u s tr ie s

h ow ever,

ra th e r

w e ll

C en su s

o f M a n u fa ctu r e s ,

m a n u fa c tu r in g p r o c e s s

g e n e r a lly
one

th e

e it h e r

u sed

u sed

fo r m s ,

o f

m ore

o f

en ergy

not

in c r e a s in g ly

6. a

co n su m e d p e r m a n -h o u r.

fo r

a c tiv ity ,

consum ed i s

5.1
5.6
5.9

12 a
.

a lm o s t 1 7 5

and

d u c tio n

on

en ergy

w o r k e r m a n -h o u r
in

3 .3
3 .8

8 .0
1 0 .2

and A nnual S u rvey

The
in

<2/>

a v a ila b le .

S ou rce:
195a,

and

e x c lu d e d

1 1 .6

1953 ....................
195U....................
1955 ....................
1956 ....................
1957 ....................
N ot

c h e m ic a ls

2.9
a. 7
5.8

1 9 U 7 ................................................

1/

w o r k e r m a n -h o u r,

1 9 2 9 -5 7

years,

o f
o f

but

s p o t w e ld in g ,
a ls o

and

b e in g

c h e m ic a l

u n it

o f

is

b e in g

and

u sed

oth e r

as

p art

in d u s tr ie s .

o u t p u t w o u ld

o f

d r iv in g

m a c h in e s .

in c r e a s e

b etw een

19 3 9

th e

pro­
KWH

sta ted

th a t

on

s in c e

19 3 9

occu rred

and

b a s is

E ven

19 5 7

i f

w as

o f m ore

d u r in g

th e

p o stw a r p e r io d .
T hus,
by

stock

w ork er,
w ith

te c h n o lo g y ,

o f
has

each

p la n t

and

as

h a d a m a jo r

e ffe ct

m a n -h o u r w o r k e d .




illu s tr a te d

by

s e le c te d

e q u ip m e n t p e r w o r k e r ,
on

th e

or

a b ility

by
o f

te c h n o lo g ic a l
e le c tr ic
th e

d e v e lo p m e n ts ,

en ergy

econ om y

to

con su m ed p e r

produ ce

m ore

G row th

o f

In
th a t

N o n p r o d u c tio n W ork ers

th e

a n a ly s is

m a n u fa c tu r in g

e m p lo y e d

in

in

o f p o stw a r

o u tp u t p e r

M a n u fa c tu r in g

tren d s

in

o u tp u t p e r

m a n -h o u r b a s e d
in c r e a s e d

m a n u fa c tu r in g h a d

on

th a n

le s s

th e

r r ia n -h o u r ,
m a n -h o u rs

o u tp u t p e r

it
o f

w as
a ll

in d ic a t e d
p erson s

p r o d u c tio n

w ork er

m a n -h o u r .
M a n u fa c tu r in g
about

2 .9

p ercen t

p r o d u c tio n
The
in

every

s ix

In

w ere

to

a d d itio n

r e la tio n

to

a ll

m a n -h o u r i n
r e la tiv e ly

at

as

tw o
o f

and

th e

"a ll

p r o d u c tio n

in

th e

s in c e

in

ch a n ge
(a )

by

p e r s o n n e l,

change

in

ca te g o ry ,

a n d m a n -h o u rs

has

a

g iv e n

in

th e y

o f

1953

had

w o r k e r m an­

19 5 7 ,

d iv e r g e n c e
w ork ers

th ey
b etw een
and a l l

19 5 3 .
re a l produ ct

in c r e a s in g
has

th e

m o d ifie d

on p r o d u c tio n
in d ir e c t

p e r io d

o f

per

w ork ers

m a n u fa c tu r in g

stru ctu re ,

m ade m o re

d u r in g

and b y

n o n p r o d u c t io n

in

it

o c c u p a tio n a l

a peak

N o n p r o d u c tio n

m a n u fa c tu r in g

th e

e m p lo y e e s .

by 19 5 7 ,

th e

one

p r o p o r tio n

reach ed

but

n on pro­

about

th e

on p r o d u c t io n

in c r e a s e

re sp e cts:
o f

13 ),

on
year.

fo u r

every

T h us,

based

191*7,

by 19 5 7 »

1 9 l* 7 .
26/

p ercen t p er

e m p lo y m e n t o f
In

by

based

per

p r o p o r tio n

o f

c o n s id e r a b ly
w o r k e r m an­

p a r tic u la r ly
th e

in

ou tp u t

w ith in

r e la tio n s h ip

tim e .

2 5 /
The B u reau o f L a b o r S t a t i s t i c s d e fin e s p r o d u c t io n w o rk e rs t o in c lu d e
n o n s u p e r v is o r y w o r k e r s ( i n c l u d i n g w o r k in g fo r e m e n ) e n g a g e d i n f a b r i c a t i n g ,

p r o c e s s in g ,

a s s e m b lin g ,

w a r e h o u s in g ,
to r ia l

and

ow n u s e

a s s o c ia te d

p erson s

c a fe te r ia ,

in

m e d ic a l,

a d v e r tis in g ,

ow n p r o d u c t s ;

a ls o

s e r v ic e s ,

(e . g .,

w ith

engaged

in s p e c tin g ,

s h ip p in g ;

a n d w a tch m e n

a p l a n t 's

very,

tre n d

ty p e

in

c o n tin u o u s ly ,

19U 7.

a ffe c te d

o th e r

3 .7

2 5 /
in

o u t p u t p e r m a n -h o u r b a s e d

n o n p r o d u c t io n w o r k e r

b etw een

th e

has

one

p a r tic u la r ly

a w h o le ,

overh ead

(b )

in

a lm o s t

in

in c r e a s e d ,

in c r e a s e

w ork er;

in c r e a s e d

The m ea su re

w o r k e r m a n -h o u rs

reach ed

th a n

e m p lo y e d

about

w ork ers.

a lm o s t

m a n -h o u r m e a s u r e s

p a ttern

a lo n e ,

th e

o f

1 9 l *7 ( t a b l e

in

in c r e a s e d

e m p lo y e e s
or

to

p r o d u c tio n

a ffe c tin g

le a s t

to

a n o n p r o d u c tio n

h ig h e r

p e r io d

fix e d

c y c lic a l

h ou rs

to

th e

due

th a n

p erson s
1 9 1 * 7 -5 7 .

in c r e a s e

p r o d u c tio n

sam e l e v e l

has

a ll

p e r io d

an

in c r e a s e d

hand,

ou tp u t p e r

fo r

ly

th e

o th e r

m a n -h o u rs

m a n -h o u r

th e

had

a b o u t 55 p e r c e n t

In

w as

is

to

m a n -h o u rs ,

about

th e

a lte r n a tiv e

th e

o f

tw o

8 . i*. p e r c e n t h i g h e r

on

e m p lo y e e

th e

th e

sh ow ed

r e la tio n

w ork ers

te rm s

w h ich w as
d e c lin e d

in

e m p lo y e e s

n o n p r o d u c t io n

h ou rs,

b etw een

w ork ers

m a n -h o u r o f

d u r in g

w o r k e r m a n -h o u rs

d iffe r e n c e

d u c tio n

ou tp u t p e r
per year

th e se

produ ct

p o w e r p la n t),
p r o d u c tio n

"e x e c u tiv e ,

and

and

a u x ilia r y

and

p a c k in g ,

r e p a ir ,

le g a l,

s a le s ,
and

in c lu d e
person n el

s a le s
o f

fo r

im m e d ia te ­

w ork ers

s e r v ic in g

s u p e r v is io n ,

ja n i­

p r o d u c tio n

s e r v ic e s

a c c o u n tin g ,

a c tiv itie s ;

in s ta lla tio n ,
fa c to r y

and

N o n p r o d u c tio n

fin a n c e ,

te c h n ic a l

fu n c tio n s ,

h a n d lin g ,

m a in te n a n c e ,

r e c o r d k e e p in g

o p e r a t io n s ."

and

in

d e v e lo p m e n t,

c o lle c tio n ,

o ffic e

s to r in g ,

engaged

p u r c h a s in g ,

p r o fe s s io n a l,
c r e d it,

r o u t in e

r e c e iv in g ,

w ork ers

d e li­

th e

f i r m 's

fo r ce -a c c o u n t

c o n s tr u c tio n .
26/
w ere

B ased

on

p a id

fo r

U O -h o u r w e e k

p r o p r ie to r s

a

are




th e

based

a s s u m p t io n
on

th a t

d u r in g

C en su s

n o n p r o d u c t io n

th e

la b o r

w ork ers

p o stw a r p e r io d

fo r ce

d a ta

in

1 9 1 * 7 -5 7 .

and a re

h ig h e r .

m a n u fa c tu r in g
M a n -h o u r s

o f

40
T a b le

13.

(M a n -h o u r

M a n u fa c tu r in g
e s tim a te s

based

rea l
on

p r o d u c t p e r n a n -h o u r ,

B u reau o f

1 9 4 7 -5 7

L abor S t a t is t ic s

d a ta )

(1 9 4 7 -4 9 = 1 0 0 )
M a n -h o u r s
T ear

R eal

A ll

P r o d u c tio n

N o n p r o d u o t io n

person s

produ ct

1 9 4 7 ....

1 /

R eal produ ct

w ork ers

w ork ers

7j

A ll

p e r n a n -h o u r
P r o d u c tio n

person s

9 7 .6

w ork ers

1 0 3 .4

1 0 0 .9
1 0 3 .0

1 0 4 .7
1 0 3 .3
9 2 .1

9 7 .4
1 0 1 .8

1 0 0 .1

9 9 .7

1 0 0 .3

1 0 2 .6

1 0 4 .2

9 6 .4

1 9 4 9 ....
1 9 5 0 ....

9 6 .0

1 0 2 .9
9 3 .6

1 1 1 .1

1 0 1 .5

1 0 1 .0

1 0 3 .5

1 0 9 .5

1 1 0 .0

1 9 5 1 ....

1 2 1 .3

1 0 9 .5

1 0 8 .4

1 1 5 .2

1 1 1 .2

1 1 2 .4

1 9 5 2 ....

1 2 5 .5
1 3 3 .1

1 1 1 .1

1 0 8 .3

1 2 4 .6

1 1 3 .0

1 9 5 3 ....

1 1 6 .7

1 1 3 .5

1 3 3 .0

1 1 8 .3

1 1 5 .9
1 2 1 .7

1 9 5 4 ....

1 2 5 .1

1 0 6 .6

1 0 1 .2

1 3 3 .0

1 9 5 5 ....
1 9 5 6 ....

1 4 1 .3
1 4 5 .0

1 1 2 .5

1 0 7 .7

1 3 6 .7

1 1 7 .4
1 2 5 .6

1 3 1 .2

1 4 4 .3

1 2 7 .1

1 3 4 .3

1 4 3 .0

1 1 4 .1
1 1 2 .0

1 0 8 .0

1 9 5 7 ....

1 0 4 .1

1 5 1 .2

1 2 7 .7

1 3 7 .4

1 9 4 3 ....

P ercen t

ch an ge

oV er p r e v io u s

1 2 3 .6

year

1 9 4 3 ....

2 .1

1 9 4 9 ....
1 9 5 0 ....

-6 .8

-0 .5
-9 .0

-1 .3
-1 0 .8

4 .5
-1 .0

2 .6

1 5 .7

8 .4

9 .7

2 .7

6 .7

3 .4
4 .5
5 .6

1 9 5 1 ....
1 9 5 2 ....

9 .6

7 .9

1 1 .3

2 .2

3 .0

8 .2

1 .6

1 9 5 3 ....

1 0 .0

1 .5
5 .0

7 .3
-0 .1

1 .6

4 .3

6 .7

4 .7

3 .1
5 .0
1 .6

2 .5

1 9 5 4 ....

-9 .4

-3 .7

-1 0 .3

0 .0

-0 .8

1 9 5 5 ....
1 9 5 6 ....

1 2 .9
2 .6

5 .5

6 .4

2 .3

7 .0

6 .1

1 .2

2 .4

-1 .4

0 .3
-3 .6

5 .9

1 9 5 7 ....

1 .4
—1 . 3

0 .5

2 .3

1 /

In c lu d e s

g /

A ssu m es




a
a

s m a ll num ber o f
4 0 -h o u r w eek

fo r

m a n u fa c tu r in g

p r o p r ie to r s ,

n o n p r o d u o tio n

w ork ers.

R e g a r d in g t h e
in c r e a s in g
m ent

ten d s

r e c e s s io n
r e s u lts
h ou rs
o f

to

dam pen

and t o

fr o m

percen t

o f

p r o d u c tio n
e m p lo y e e s
o f

p r o d u c tio n

so

th a t

th e

19 ^ 9

of

1950,

m a n -h o u rs

te n d s
d u r in g
rea l

r e in fo r c e

p e r io d s

and

to

d u r in g

d u r in g

th en

in c r e a s in g
be

th e

p e r io d

w ork ers

(s u c h
a

o th e r

27/

as

num ber

in c r e a s e s

in

a

fu lle r

N o n p r o d u c tio n W o rk e rs
1957,

PP-

lf-3 5 -^ 0 ).




w ith

>

o f

th e

le s s

excep t

a lo n e .

a n d m a n -h o u rs

th a n

of

o u tp u t

d iv e r g e n c e

th a t

in

th e

a c tu a lly

on

im p o r ta n c e

econ om y

in c r e a s e s
e ith e r

dow n

in

as

in

per
o c­

la tte r

in c r e a s e d

o u tp u t

T h is

th e

o f

of

sh ow ed

per

s m a ll

fa c to r

ra te

n o n p r o d u c tio n

a w h o le ,

r e la tiv e ly

re a l produ ct

n o n p r o d u c t io n

several

T h is

fa c to r s ,

and

has

e n g in e e r s ,

fu n c tio n s

p r o fe s s io n a l,

d is c u s s io n

and

in

s c ie n tis ts ,

overh ead

w ork ers

in c lu d in g

e q u ip m e n t

r e s u lte d

is

it

in c r e a s e s

is

in

p r o b a b ly

in c r e a s e
o n ly

th a t

m a n -h o u r

a

in

ou tp u t

s m a ll

in ­

a
and

o th e r

p o stw a r

la r g e

p e r io d

e x p e n d itu r e s

research

in c r e a s e

in

and

n on produ c­

te c h n ic a l w o rk e r s ).

in tr o d u c e d

s a le s

th e

expanded

d ir e c t

w ere
and

fo r

in
th e

or

expanded

p e r s o n n e l,

w h ich

and w o rk e rs

27/

a c tiv itie s .

in

w hen

non­
a ll

n o n p r o d u c tio n w o rk e rs

w ork ers

r e c e s s io n s .

s lo w in g

o f

p a tte rn

in c r e a s in g

sh ow s

w ork ers

occu rred ;

o f
o f

d e c lin in g .

fo r

e ffe ct

19 5 7

new p la n t

of

th e

m a n -h o u r

d e c lin e .

c le r ic a l

n o n p r o d u c tio n

F or

th e

and
to

a c tiv itie s .

a d d itio n ,
to

fo r

o f

per

in
11

9 p ercen t

o n ly

m a n -h o u rs

T h is

>

sh ow n

d e c lin e d

th e

th o se

19 5 7

in

w ere

d u r in g

p r o p o r tio n

a s s o c ia te d

d e v e lo p m e n t

fo r

sta rted

a ls o

dropped

p r o d u c tio n

are

m a n -h o u rs

in c r e a s e d

n o n p r o d u c t io n

econ om y

d e c lin e s

19 5 6

w ork ers.

and p r o b a b ly

th e

e x p la n a tio n

th e

The

in

w h ich

th a n

o f

c y c le

on p r o d u c tio n

h ir in g

w ork ers.

in

s itu a tio n

m a n -h o u r

w ork ers

d a m p e n in g

of

seem s

le d

in

th e

a ctu a l

o f

th e r e fo r e ,

or

crea se

In

and

m a n u fa c tu r in g ,

m a n -h o u r

tio n

a ll

p r o d u c tio n

o u tp u t

p a rt
per

of

im p lic a t io n ,

to

of

1 9 5 ^ -5 5

o f

based

n o n p r o d u c tio n

o u tp u t

of

T h is

a n d m an­

p e r io d s ,

m a n -h o u r

w ork ers

p ercen t

m ea su re

m u ch m o r e

per

o f

p e r io d s .

p r o d u c tio n

b u s in e s s

th e

e m p lo y ­

e m p lo y m e n t

w h ile

w ork er

a ll

1

reverse

w ork er

a n d m a n -h o u rs

o f

of

th a t

th e

in c r e a s e d

p r o d u c tio n

th e

th a n

th e

m a n -h o u r ,
to ta l

p e r io d s

recovery

o f

o u tp u t
o f

p r o d u c tio n

m a n -h o u rs

r e s u lt,

in

c y c le

w h ile

in

a

le s s

e m p lo y m e n t

O ne

As

year,

th e

and

cou rse

c y c le

th a t

o f

recovery

w ork er

D u r in g

b e h in d

per

d u r in g

d u r in g

b u s in e s s

s ta b le .

th e

o u tp u t

a percen t

m a n -h o u r

g a in s

th e

la g

o f

as

p r o d u c tio n

s m a ll d e c lin e

o n m a n -h o u r s

case,

w ork ers

w h ereas,

per

m a n -h o u r b a s e d

per

o f m a n -h o u rs

d u r in g

r e c e s s io n

w ork ers

o u tp u t

to

p e r io d

up

recovery

in

te n d s

r e la tiv e ly

w ent

th e

cu rred

a

g e n e r a l,
in

p a tte rn

w ork ers

o u tp u t

r e la tiv e ly

p a ttern s

w ork ers.

In

in

d ow n tu rn

w ork ers

19^9>

th e

th e

w ork ers

1 9 ^8 ;

fro m

th a t,

r e m a in s

d iv e r g e n t

becau se

in c r e a s e s

d u r in g

In

c y c lic a l

in

an d n o n p r o d u c tio n

13 .

th e

fa c t

n o n p r o d u c tio n

ta b le

on

n o n p r o d u c t io n

p r o d u c tiv ity

e m p lo y m e n t

The

o f

a c c e le r a te

th e

d e c lin e

w ork er

e ffe c t

im p o r ta n c e

o f

F a c to r ie s ,

th e

g ro w th

1 9 1 9 -5 6

(in

in

n o n p r o d u c tio n

M o n th ly

w ork ers,

L a b o r R e v ie w ,

see

A p r il

42
Som e i n d i c a t i o n
stru ctu re
based

on

years

C en su s l a b o r

m ost o f

a ttr ib u ta b le
w ork ers.
percen t

o f

th e
to

s a le s

1952

to

1957.

To

g a in
th e

p o r tin g
r e fle c ts

The

n o n p r o d u c t io n
ch an ges

in

R esearch

w ith

th a t th e
in

w as

o f

n o n p r o d u c tio n

in c r e a s e d
in c r e a s e

by

p r o fe s s io n a l

th a n

b etw een
th a t o f

1952

b etw een

g rou p

in c r e a s e d
in

and

a c tiv itie s

d e v e lo p m e n t

in c r e a s e d

1952

c le r ic a l,

and 1957,

p r o f e s s io n a l p e r s o n n e l w ith

and m o d ific a tio n

U$
1955
to

in
27

and

tu t

th e

p r o fe s s io n a l w ork ers.

c le r k s ,

th e

an d k in d r e d

w ork ers

g r o u p s — m a n a g e r ia l,

g a in s

lU ,
recen t

a p p r o x im a te ly

o c c u r r in g

n o n p r o d u c tio n

ta b le

w o rk e rs w as

te c h n ic a l,

a d m in is tr a to r s ,

e x p a n s io n ,
th e n

in

th a t in

th e

a ll

le s s

in

in d ic a t e

am ong

p e r io d ,

g ro w th

research

fo r

im p o rta n ce
fo r

m ore

c a r e fu l

d a ta

o f

th is

and

th e ir

s k ille d

su p­

w ork ers

o n new p r o d u c t s

o f new p r o d u c t iv e

and

c a p a c ity ,

e m p lo y m e n t m ay h a v e l i t t l e

e m p lo y e d .
on

ca teg ory

in te r p r e ta tio n

th e

and p r o d u c tio n

d ir e c t

I t

a ls o

o c c u p a tio n a l
w ork ers

in

o f e m p lo y m e n t t h e r e f o r e

o f

s h o r t-r u n

serves

to

stru ctu re

order

to

ch an ges

e m p h a s iz e

in
th e

d e s ir a b ility

and a c t iv it ie s

e v a lu a te

m ore

u n der­

o u tp u t p e r
o f

b oth

a d e q u a te ly

th e

a n d D e v e lo p m e n t

N ew p r o d u c t i o n

te c h n iq u e s

research

t h e A m e r ic a n

econ om y f o r

o f

a t te n tio n

recen t years.

in

research

p rocesses

end

several years

th e
to

fa c ilitie s

1958.




m any y e a r s ,
M ore

lo o k in g

are

A lth o u g h
i t

has

th e

r e s u lt

research

r e c e iv e d

o f

to w a rd th e
th a t

a

has been

lo n g -te r m
a

an in c r e a s in g

an d m ore in d iv id u a l p r o d u c e r s

d e v e lo p m e n t o f p r o d u c t s

are

fe a tu r e
am ount
esta b ­

im p r o v e m e n t o f p r e d i c t i v e
m ay n o t b e

in

p r o d u c tio n

fo r

com e.

M u rra y W e r n ick ,

s p e e c K b e fo r e

a n d new p r o d u c t s

a n d d e v e lo p m e n t.

o f

28/

th is

o c c u p a tio n a l

e s tim a te s

p r o fe s s io n a l,
th e

th e

p r o v id e d

o u t p u t p e r m a n -h o u r.

in v e s tm e n t i n

lis h in g

m ost o f

22 p e r c e n t

grou p s

a ll person s

o b ta in in g

o f

on

is

c u r r e n t p r o d u c tio n .

g r o w in g

th e n e e d

m a n -h o u r o f
o f

to

e m p lo y m e n t
h ir in g

d e v e lo p m e n ts

T h ese

o t h e r n o n p r o d u c tio n

a c tiv itie s ,

r e la t io n s h ip

in

te c h n ic ia n s ,

p la n n in g

and s im ila r

scores

o f

e x p a n s io n

processes,

28/

s h o w e d e m p lo y m e n t

th ese

ex ten t

s ta ffs

d a ta .

D u r in g

fr o m

The

o f

m a n u fa c tu r in g

p r o fe s s io n a l w ork ers

1957,

p erson n el a ls o

c o m b in e d

th ese

in

in c r e a s e d

im p o r t a n c e
in

o f

e x p a n s io n

th e

and 19 57— 27 p e r c e n t.
r e la tiv e

e ffe c t
w ork ers

fo r ce

The num ber o f
fro m

p ercen t

th e

o f n o n p r o d u c tio n

C le v e la n d

O cc u p a tio n a l S h ift s

C h a p te r,

A m e r ic a n

in

M a n u fa c t u r in g

E m p lo y m e n t ,

S t a t is t ic a l A s s o c ia t io n ,

M arch 1

43

T a b le

lU .

C hange

in

w ork ers

num ber and o c c u p a t io n a l
in

m a n u fa c tu r in g

P e rce n ta g e

ch a n ge

1 9 5 2 -5 7

w ork ers

P r o fe s s io n a l
M a n a g e r ia l

in

.....................

1 9 5 2 -5 7

d is tr ib u tio n

o c c u p a t io n
1955

1957

100

100

19

11

100

US

27

22

2U

27

21

20

19

U7
10

k$

UU
10

.................................

11

5
8

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25

1




n o n p r o d u c tio n

1952

1 9 5 5 -5 7

8

S ou rce:
B u reau o f t h e
M u rra y W e m ic k , o p . c i t .

o f

p e r io d s ,

P e rce n ta g e
by

...........................

C le r ic a l

s e le c te d

num ber

O cc u p a tio n

N o n p r o d u c tio n

d is tr ib u tio n

in d u s tr ie s ,

C en su s,

as

g iv e n

in

u n p u b lis h e d

11

paper by

u

S t u d ie s
L abor
th e

fo r

th e

S ta tis tic s

num ber o f

a c tiv itie s
e a r ly

s c ie n tis ts

and on

30 /

e x p e n d itu re s

and o f

th is

grou p ,

o f

in

d e v e lo p m e n t

o th e r

th a n

s a le s ,
o f

a id

th e

research

p r o d u c tio n ,

s c ie n tis ts

s c ie n tis ts

and

fo r

on

th e

e m p lo y e d

in

and abou t

and

e n g in e e r s

an d e n g in e e r s

in

te s tin g ,
in d u s tr y

en gaged in

e tc.

is

and

B u reau o f
years

e s tim a te d
in

th a t

su ch

m a n u fa c tu r in g .

w ere

1957,

engaged

e m p lo y e d i n

a s m a n a g e r ia l,

Ely e a r l y

th e

te c h n ic a l

t o t a l n um ber

33 p e r c e n t.

a n d d e v e lo p m e n t

in

A m e r ic a n

m a n u fa c tu r in g w e re
tw o -th ir d s

o f

d e v e lo p m e n t

e m p lo y e d

had in c r e a s e d b y

research

th e

recen t

e m p lo y e d i n

in

d e v e lo p m e n t a c t i v i t i e s ,

I t

w ere

liO O ,0 0 0 w e r e

a n d e n g in e e r s

by

in

research

a c tiv itie s .

a c tiv itie s ,

a n a ly s is

co n d u cte d
in c r e a s e

and e n g in e e r s

about

s c ie n tis ts

and

F o u n d a tio n

su ch

s c ie n tis ts

A bout o n e -th ir d
research

S c ie n c e

in fo r m a tio n

an d e n g in e e r s

55 0 ,0 0 0

1 9 5U a b o u t

in d u s tr y

N a tio n a l

2 9 / p r o v id e

The

h ad in c r e a s e d

m o r e — a b o u t 1 *1 * p e r c e n t .

even

In

a d d itio n

d e v e lo p m e n t,
m in is tr a to r s ,
th a t

th e

2

to

la r g e

th e

c le r k s ,

F u rth er
itie s

is

o f

o f

an d e n g in e e r s

s u p p o r tin g

and s k i lle d

s u p p o r tin g

e m p lo y e d

p e r s o n n e l,

w ork ers

e v id e n c e

fo u n d

in

o f

th e

th e

w h ic h w e re

s u b s ta n t ia lly

s in c e

as

order

a

to

r e s u lt
m a in ta in

N a tio n a l S c ie n c e
d e v e lo p m e n t

$9

b illio n

research
m e n t);

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as

research

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r e q u ir e d .

expand

19 5 6 ,

$6 .5

r e m a in d e r

It

is

a c tiv itie s

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fo r

fig u r e

about 7 5

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b illio n

ad­

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29/
S c ie n c e
recen t

19 5 6

F in a l R e p o rt on

F o u n d a tio n
p e r io d s ,

M ay 1 9 5 8 ,

on

and i t s

E x clu d e s




$9

by

research

b illio n .

rep resen ted
research

and
Of

th e

in d u s tr y

and

and

in s t itu tio n s .

in
th e

d e v e lo p ­

d e v e lo p m e n t

The

com p a ra­

1 9 5 3 -5 1 *

on

C o m p a n y 's

E q u ip m e n t i n d i c a t e s
in

e x p e n d itu re s

a

Annual S u rvey

fu rth e r

fo r

in c r e a s e

research

o f

o f

an d d e v e l­

G o v e r n m e n t-fin a n c e d p r o j e c t s ) .

R e v ie w

d a ta

N a tio n a l S c ie n c e
10.

to

ow n r e s e a r c h

and n o n p r o fit

S c ie n c e

S u rvey,

S c ie n tific

e m p lo y m e n t o f

31/
N o.

e s tim a te d

and 1956,

p e rce n t)

G o v e r n m e n t 's

F o u n d a tio n ,
a

30/
m e n t,

and

p u b lic a tio n ,

s u m m a r iz e d

1953

and

and p ro ce s s e s

is

G o v e r n m e n t -fin a n c e d

th e

and 19 5 7

(in c lu d in g

s u m m a r iz e d d a t a

con tra cts

It

T h e M c G r a w -H ill P u b li s h in g

N ew P l a n t s

N a tio n a l S c ie n c e

In d u stry ,

19 5 8 ,

in d u s tr y

70

in c r e a s e d

19 5 3 w as $ 3 .7 b i l l i o n , in d ic a t in g an in c r e a s e o f
19 5 3 and 19 5 6 , in e x p e n d itu re s f o r r e s e a r c h an d

20 p e r c e n t b etw een

about

opm ent b y

about

have

p rod u cts

$ 5 . 1* b i l l i o n

a c tiv ­

R esearch

d e fe n s e

o f

p o s itio n s .

a lm o s t

d e v e lo p m e n t

a c tiv itie s .

19 5 0 ,

to

in

and

is

in

b etw een
fo r

(o r

su ch

im p e tu s

b etw een

fr o m

(in c lu d in g

a c tiv itie s .

P la n s

th a t

u n iv e r s itie s

in d u s tr y

p ercen t;

d e v e lo p m e n t

31/

and e n g in e e r s

research

s m a ll p r i o r

c o m p e titiv e

rep resen ted

b le

in
fo r

im p r o v e m e n ts

in c r e a s e d

a n d d e v e lo p m e n t

th e

e x p a n s io n

u n d er th e

fo r

F o u n d a tio n ,

s c ie n tis ts

e x p e n d itu re s

p a r tly

need

e x p e n d itu re s
in

in

r e la tiv e ly

th en ,

o f

r a p id

g row th

e x p e n d itu r e s ,
a ls o

person n el to

w ere

su ch

1 .

to

r a tio

s c ie n tis ts

s ta ffs

o f

o f

A m e r ic a n
10,

fo r

a n d D e v e lo p m e n t,
costs

and n o n p r o fit

R e v ie w

N o.

an d e n g in e e r s

a n d d e v e lo p m e n t

govern m en t

F o u n d a tio n ,

in

A n o th e r N a tio n a l

M anpow er B u l l e t i n

s c ie n tis ts

D a ta o n R e s e a r c h

research

e m p lo y m e n t i n

an d E n g in e e r in g

NSF 5 6 - 1 6 .

D a ta

on

th rou g h

D ecem ber
m ore
N o.

10,

1956.

in s titu tio n s .
R esearch

a n d D e v e lo p ­

49

W h ile
b e e n
u c t

a

t h e s e

m a jo r

p e r

m a n -h o u r ,

s u b s e q u e n t
a c t i v i t y
h o u r s

e x p e n d it u r e s

f a c t o r

t o

a r e

t a k e s

i n

a

p l a c e

c a p i t a l ,

r e l a t i o n s h i p

o f

o u t p u t

a n d

d e v e lo p m e n t

s t a b l e

a s

n o t

o f

t h e

o f

o v e r

m a n -h o u r s

in p u t

i n

n u m b e r

i n

t h e

in c r e a s e

in

t h e

i n

r e a l

n u m b e r

y e a r

t h e

o f

i n

i n

a

t h i s

w h ic h
i s ,

im p o r t a n c e ,

l i k e

a s

i n

t h e

o n

i n d i r e c t

m an ­
t h e

r e s u l t ,

e x p e n d e d

m o re

p r o d ­
y e a r s

T h e

a c t i v i t y
A s

m a n -h o u r s
r u n ,

a

m a n p o w e r.

y e a r s .

s h o r t

u n d o u b t e d ly

e x p e n d e d

o f

fr o m

o f

h a v e
g r o w th

f o r

m a n -h o u r s

( in c l u d i n g

b e c o m e s ,

d e v e lo p m e n t

r e a l i z e d

r e s u l t i n g
a

a n d

in v e s t m e n t

l a b o r

o u t p u t

s p r e a d

b e
T h e

c a p i t a l

m e a s u r e

a n d

a n d

m a y

d e v e lo p m e n t

t e c h n o lo g y

e x p e n d it u r e s .

a c t i v i t i e s )

r e s e a r c h

a n d

r e s u l t s

b u t

o n

r e s e a r c h
o f

k in d

t h e

d e p r e c i a t io n

o n

a d v a n c e m e n t

o r i g i n a l

r e p r e s e n t

i n c lu d e d

e x p e n d it u r e

t h e

t a n g i b l e

t h e

t h u s

i n

r e s e a r c h
a n d

t h e

l e s s

l a s t

fe w

y e a r s .

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a n d

A n o t h e r
p e r
i n

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a

b y

m a jo r

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t o

t h e

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t o

a
i n

l i v i n g .




o f

t o

g r o w th

g o v e r n m e n t
p u b l i c

t h e

a n d

i n

e x p e n d it u r e s

g o v e r n m e n t,

i n

w h ic h

a c t i v i t y

im p r o v e d

s u p p ly ,

a l s o

e le m e n t

o u t p u t

in v e s t m e n t s

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w a t e r

h a v e

s t r o n g ,
t h e

e t c .

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c o n t r ib u t e d

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id e ly

t o

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i n

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t h e

l a b o r

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i t

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h u m an

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S t a t e s .

s k i l l e d ,

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T h e

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w o r k e r ,

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h ile

i n ­

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s t r e s s

a t u r it y

i l l

m a n y

a d v a n c e .
m

W

l i t t l e

m a n a g e m e n t

p r o d u c t i v i t y

th e m

m

s k

I n

h a v e

in g e n io u s

a n d

i t .

I I .

o f

c o u ld

a n d

p r o c e s s ,

f o r e i g n

m a n y

b le n d in g

U n it e d

A m e r ic a n

o f

t h e

o f

m e a s u r e s ,

a d v a n c e

c o m p e t e n t

e x e c u t e

o r ld

i n d u s t r y —

a t t it u d e s

i n d u s t r i a l

t h e

W

b a r g a in in g ,

s k i l l f u l

p r o d u c t i v i t y

s t r e n g t h

s i n c e

t e c h n o l o g i c a l

a

p r o d u c t io n

f o r c e

t e c h n o lo g y ,

A m e r ic a n

s a f e t y

in n o v a t io n s

o f

o f

a d v a n c e m e n t,
o b i li t y ,

in n o v a t io n s
r a t e

o f

w a t e r w a y s ,

t e c h n o l o g i c a l

o b s e r v a t io n s

S t a t e s

c o l l e c t i v e

c o n t r ib u t e d
p r o c e s s

t y p e

a c t i v i t i e s

f o r c e ,

t h e

l o c a l

in v e s t m e n t

f in a n c e d
a n d

w it h o u t

t h e

l a b o r

t h e

im p o r t a n c e

o f

a n d

in is t e r

n o t e

d i s t in g u is h

p e r s o n a l

o r

e d u c a t io n a l
l a b o r

t h e

p r i v a t e

a i r p o r t s

m a n -h o u r

a l e r t

t o

fr e e d o m

o f

a f f e c t i n g
a n d

m a n -h o u r .

p e r

i n t e r e s t i n g

w h ic h

o f

u n d e r t a k e n

in v e s t m e n t

o u t p u t

i n t e l l i g e n t ,

e d g e

E x a m p le s

p r i v a t e

p e r

f a c t o r
S t a t e ,

F a c t o r s

O b v io u s ly ,
f lu e n c e

F e d e r a l,

h ig h w a y s ,

a n d

o u t p u t

H um an

p e r v a s i v e

o f

e f f e c t i v e n e s s

a c t i v i t i e s

p u b l i c

i n

a n d

r o l e

f a c i l i t i e s .
t h e

e x t e n s iv e

d i f f u s e d

g r o w th

t h e

a n d

i n c r e a s e d

m o r e

E d u c a t io n

l e d

t

a

i n

f r e e
t h e

a d o p t io n
a d a p t a t io n

t o

p o r t a n t

f o u n d a t io n

a

e c o n o m y

o f

t e c h n o l o ­

o f

lo n g - t e r m

t h e
,

f a c t o r s

i n

f o r

h ig h

i t s

h a s

p r o d u c t iv e

h ig h

t h e

g r o w th

s t a n d a r d

OUTPU T

U s in g
o p e d
a n d

i n

t h e

t h e

I n

h o u r s ,

i t s

o f

T h e
r e a l

l a t i o n
t h e

w a s

a l s o

o f

b e

a n d

i n c r e a s e s

in

p r o d u c t

r e a l

I t

r e a l

s h o u ld

p r o d u c t

p e r

p o s t w a r

p e r i o d

t h e

l a t t e r

I t

m a y

t h a t

fr o m

18 6 9 -7 6

p e r c e n t
p lo y e d
y e a r ,
w o r k
p e r

f o r

p e r

b u t

t h i s

a b o u t

c a p i t a

w h ic h

w a s

a m o u n te d

32/
S in c e

t o

19 M

S e e

18 70 ,

o f

j-

-

t h e




p e r i o d

p e r

d e v e l ­

e m p lo y m e n t,

m a n -h o u r

p e r

i n f l u e n c e d

m a n -h o u r s ,

t h e

o n

B I£ >

c a p i t a

o r

i n

h a s

c a p i t a .

b y

a n d

b e

t h a t
d u e

t h e
t h e

p r o ­
g o o d s

r e s p e c ­

in

o f

t h e

w o r k in g
1 .9

m a n -h o u r

f o r

t h e

p r o d u c t

a b o u t

p e r

t o

p r i v a t e

p r e p o r t io n

b y

in c r e a s e

m a n -h o u r s ,

C e n s u s

t r u e

t h e

e n t i r e l y

r e a l

d e c l i n e

o u t p u t

w o u ld

i n

t h e

in c r e a s e d
o f

w a s

in c r e a s e

lo n g - r u n

c a p i t a

c l e a r l y

p e r i o d

d e c l i n e s

t h e

1

p e r i o d
H

b o t h

p o p u ­

h o u r s ,

p e r c e n t .
t o w a r d s

t h e

t o t a l

w it h

I t

m ay

c o n t in u e d
a n d

p r i ­

f o r

. ,

t h e

t h e

d e c l i n e

p o s t w a r

g a in s

i n

t h e

p e a k

fr o m

in c r e a s e

t h e

e a r l y

l e v e l

i n

r e a l

p a r t

o f

t h e

r e a c h e d

d u r in g

p o s t w a r

p e r i o d

.

t o

c o m p a r e

t h e

e s t im

f i g u r e s

g iv e n

n a t i o n a l

p r o d u c t

p e r

sa m e

p e r i o d ,

F o r c e s )

t h e

in c r e a s e d

c o u n t e r b a la n c e d

p e r c e n t
b a s e d

p e r

y e a r .

e n t i r e l y

p e r c e n t

A b r a m o v it z ,
P a p e r

a t e s
i . e

o n

t h e

t h a n

o f

B a s e d

n e t

2

e s t im

q u a l i f i e d ,

A rm ed

a b o u t

M o s e s

p e r

r u n .

t h e r e f o r e
t o

T h e

c o n t r i b u t i o n

i n t e r e s t

m o re
o f

i s

q u it e

p o s t w a r

b a s e d
b y

o f

p e r

W a r

53,

O c c a s io n a l

R e s e a r c h .

a

D u r in g

w a s
0 .3

e x t e n t

t h a t

o r ld

lo n g

y e a r .

o u t p u t
p r o d u c t

r e a l

a n n u a l

i n d i c a t e
t h e

p e r c e n t

b e

e d

W

p o s t w a r

p o p u la t i o n ,

i n

c a p i t a

a v e r a g e

t h e
o n

C A P IT A

c a p i t a .

m u st

b e

t h e

( e x c lu d in g

o f

t h e

f o l l o w

a l s o

w it h

3 * 5

n o t e d

o f

p e r

f o r

d a t a

P E R

w h e th e r

g r o w t h

m a n -h o u r .

p r o d u c t

p e r

c a p i t a

p a r t

p e r

p r o d u c t

b e

1 5

d u r in g

c o n t in u a t io n

t h a t

v a t e

t a b l e

som e

r e a l

i n f e r r e d

p r o d u c t

PRODU CT

m a n -h o u r .

i n

o r
t o

o t h e r

d e t e r m in e
t h e

e m p lo y e d ,

P R IV A T E

m a n -h o u r

w it h

t o
t o

R E A L

p e r

a lo n g

n a t i o n a l

p e r

TO

o u t p u t

p o s s i b l e

p r o d u c t
3 * 1

t h a t

o n

c a p i t a

o f f s e t

e m p lo y e d

r e s u l t

i s

g iv e n
p e r

r e a l

R E L A T IO N

c o n t r ib u t i o n

r e a l

f i g u r e s

i n

i t

p r o d u c e d

m a n -h o u r

t i v e l y ,

a t io n

p o p u la t io n

p r o d u c t

in c r e a s e

IN

s e c t i o n s ,

m a jo r

t h e

s e r v i c e s

p e r

in fo r m

g e n e r a l ,

p o r t i o n
a n d

M A N -H O U R

p r e v io u s

a v e r a g e

c o n t in u e d

i n

P E R

5 2 ,

p e r

o n

c a p i t a

a b o u t
t h e

in c r e a s e

b y

in c r e a s e d
o f

0 .2

t h e

o f

d e c l i n e

lo n g - r u n

t h e
s t u d y

1

i n

1 .9

a b o u t

p o p u la t i o n
p e r c e n t

a v e r a g e

in c r e a s e
i n

A b r a m o v it z ,

i n

o u t p u t

h o u r s

r e a l
p e r

em ­

p e r
o f

p r o d u c t

m a n -h o u r ,

y e a r .

R e s o u r c e s
N ew

b y

t h e

f o r
t h e

p r o p o r t io n
b y

T h e

a t e
i n

Y o r k ,

a n d

O u tp u t

1 9 5 & ,

T r e n d s

N a t io n a l

i n

t h e

B u re a u

o f

U n it e d

S t a t e s

E c o n o m ic

47

Tabic 15. Average annual percent change in real product, real product per
capita, em
ployed population, man-hours, and real product per
man-hour, 1947-58
Total e o m
c no y

Private e
conom
y

Real product................................................
Population................................................
Real product per capita....... ................. .

3.7
1.7
1.9

3.6
1.7
1.9

Real product per capita is the product oft
Proportion of population employed!
1) Employment (Census)......................... .
2) Jobs (BLS) 1/ .....................................

- *7
—

-1.0
- .7

Average annual man-hourst
1) Census man-hours.............. .......... .
2) BIS man-hours.....................................

...

- .6
- .5

Real product per man-hours
1) Based on Census man-hours.................
2) Based on BIS m a n-hours............... .

—

Item

—

3.5
3.1

1/ Because of multiple Job holding, the total num of jobs held m y
ber
a
exceed the num of persons employed.
ber







A P P E N D IX E S

A p p e n d ix

A .

M e th o d s

E a r l i e r

in

d e s c r ib e d

i n

m a n -h o u r s

d a t a

d e g r e e

w h ic h

t o

a v a i l a b i l i t y
i t

i s

T h e

r e a l

a t e s

R e a l

u n d e r s t a n d
p e r

w h ic h

r e a l

P r i v a t e

T h e
d o l l a r s )
i v i s i o n ,

m e th o d s
f o r

t h e

t o

s

s u m m a r iz e s

o n

a n d

t h e
t h e

a n d

t h e

p e r

A

I n

c o n c e p t

u p o n

t h e i r

a c t u a l l y

l i m

u s e d

e c o n o m y

e le m e n t s

w a s
(G N P )

p r a c t i c e ,

d e p e n d s

a n d

p r i v a t e

m a jo r

p r o d u c t

- 2 ) .

r a t i o s

E s t im a t e s

m a n -h o u r

r e a l

s o u r c e s

t o t a l

a n d

p r o d u c t

g r o s s

O

a n d

i n

a n d
t h e

t h e

i t a t i o n s ,

in

e s t i ­

m a jo r

d e r i v in g

s e c t o r s .

m a n -h o u r s .

B u s in e s s

i s

t h e

I t

n e t

v a lu e

o f

d o m

s e r v i c e s

c o u n t e d

" P i n a l "
e d ia t e "

g o o d s

p l a c e .

T h is

i s

it e m s

t h e

t h e y

t o

E x a m p le s

o n

f a r m

l /
c u r r e n t

195b

A

a n d

s ,

t h e

a n d

F ,

o f

a r e

a r e

i s

e q u iv a le n t
f o o d

t h e

r e n t a l

o f

In c o m e

c o m m e r c e .

m

o f

i n

p r o d u c e d

b y

a r e

o f

b y

c o n s u m e r s ,
in v e n ­

in t e r m

in c lu d e d

in c o r p o r a t e d
t o

In c o m e
G r o s s

b u s in e s s

v a lu e

l e a d

e d ia t e
i n

a n d

t h e

a r e

d u p li c a t in g

t o

som e

s e r v i c e s

t h e

in fo r m

A -l

s o u r c e s

g r o s s

S u r v e y
a t io n

T h e

t h e

o f
o n

" i n t e r ­

t o

u s u a l l y

f a b r i c a ­

c o v e r a g e

i n

t h e

b u t

o b t a in e d

p r o d u c e d

o f

m a r k e t

I n c lu d e

p u r c h a s e d

f o o d

a n d

i n

a r e
b y
c o n ­

h e m e s .

u s e d

n a t i o n a l

fr o m

f u r t h e r

i n s t a n c e s

a c t u a l l y

e m p lo y e e s ,

a n d

o f

f o r

p u r c h a s e s

o w n e r -o c c u p ie d

m e th o d s

f u r t h e r

a n d

t o

o f

a t e s

i n

g e n e r a l

e x c lu d e d .

a c t u a l

n o t

i n

p u r c h a s e d
a r e

t o

a r e

g o o d s

v a lu e

e s t im

n o t

o d ifie d

w h ic h

B i b l i o g r a p h y .




T h e

c o n s t a n t

1 /

s e r v i c e s

c h a n g e

w o u ld

i n

N a t io n a l

s e r v i c e s

p r o d u c t io n

a s s e t s

g e n e r a l

S u p p le m e n t
F o r

a n d

a r e

GN P

t h e

C o m m e rce .

a n d

d i f f e r e n t i a t e d

u s u a l l y

f u r n is h e d

t h e

t h e

t h e y

t h i s

o f

g o o d s

g o o d s

o f

w h ic h

s in c e

p r o d u c t io n

d o l l a r

c o u r s e

e x i s t i n g

a r e

o f

g o v e r n m e n t .

i n

i n

d e s c r i p t i o n
c o n s t a n t

N a t io n a l

D e p a r tm e n t
A p p e n d ix

b e

o f

l i m

f i n a l

b y

s e r v i c e s .

i t e d

o f

c o n s id e r e d

a n d

d e f i n i t i o n

l a t t e r

o u t p u t

t h e

( p r i v a t e

p u b lis h e d

( i n c l u d i n g

s e r v i c e s

t h a t

a l s o

p u r c h a s e .
su m ed

g o o d s

a n d

i n

I n

p r o d u c t

D e p a r tm e n t

o f

a n d

s e r v i c e s

r e s a l e T r a n s f e r s

p r o d u c t s

v a lu e

s e p a r a t e l y

e d ia t e

p r o d u c t s

o r

a n d

r e a l
s e r i e s

p u r c h a s e s

in v e s t m e n t

c o n s u m e d

n o t

in t e r m

t h e

in v e s t m e n t ,

g o o d s

t h e r e f o r e

f i n a l

e s t ic

f o r e i g n

t h e

E c o n o m ic s ,

m a r k e t

c o m p r is e s

f i n a l

o f

p r i v a t e

fr o m

o f

a n d

t i o n

t o t a l

p r o d u c t

g o o d s

f i n a l

o f

d i r e c t l y

f f i c e

p r i v a t e

v a lu e

a t e

t a k e n

e c o n o m y .

t o r i e s ) ,

t h e

f o l l o w

- l

i n t e r p r e t

t h e

GNP

b a s e d
A

a d h e r e

M a n -H o u r

r e a l

a r e

( t a b l e s

t o

m a n -h o u r

o f

p e r

E co n o m y

e s t im

i s

n a t i o n a l

m

t o

c o n c e p t

r a t i o s

o r d e r

O u tp u t

in d e x e s

s o u r c e s

c o m p u te d
I n

t h e

T h e

f o r

P r o d u c t

T o t a l

t h e

r e p o r t ,

t e r m s .

d a t a .

p r o d u c t

o f

S o u r c e s

v a r io u s

t h e

o f

d e s c r i p t i o n

e s t im

D

fr o m

im p o r t a n t

m a tin g

t h i s

g e n e r a l

a n d

t o

d e v e lo p

p r o d u c t

C u r r e n t
m e th o d s

i s

b o t h
g iv e n

B u s in e s s ,
a n d

t h e
i n

U . S .

s o u r c e s ,

s e e

A -2

Gross national product is also equal to the incom (national income)
e
received by the various factors of production (labor and property) which arise s from the current production of goods and services, plus the am
ount of
capital consumption allowances, indirect business taxes, and certain other
miscellaneous items. The major categories of gross national product in
current dollars and the related (costs) payments incurred fo r the year 19 5 7
are shown in table A-3.
Gross national product in current dollars cannot be used directly fo r
the measurement of productivity since i t would reflect change in value due to
price change in addition to the change in physical volume. The national In ­
c m Division, Office of Business Economics, U.S. Department of C m
oe
om erce,
prepares and publishes estimates of constant dollar gross national product
which are related to and com
plem th e ir current dollar estimates.
ent
In theory, gross national product in constant dollars can he obtained
either by developing estimates of constant dollar gross product originating
in each sector (output minus intermediate goods and services) and sum ing
m
these to to ta l gross national product or by converting the current dollar
value of fin a l goods and services into constant dollars. In practice, due to
lim itations of the data, only the la tte r m
ethod is used at the present time
to develop the o ffic ia l estimates in the United States.
The current and constant dollar estimates of G P and major components
D
fo r 195^ and 19 5 7 , along with the im plicit price deflators are shown in
table A-4. I t should be noted that th is is a sum ary table and that both the
m
current and constant dollar estimates are in itia lly developed in considerable
unpublished detail and then aggregated to the level shown in table A-4.
Before going on to a detailed discussion of so e of the problems in ­
m
volved in developing the constant dollar estimates, so e explanation must he
m
m d of the fact that the measure used in th is report is limited to the p ri­
ae
vate sector of the econom excluding general government. The reason fo r the
y,
exclusion of general government is that there is no satisfactory method of
measuring the goods and services provided by the government, either in current
or constant dollars. Lacking an adequate measure fo r the output of government,
the national incom accounts adept the convention that "output" of general
e
government is equivalent to the compensation of government employees. Th is
implies that in "real" terms, the productivity of general government employees
is assum to be constant. Although th is is not the only area In the national
ed
incom accounts where, fo r lack of adequate concept and data, output is equated
e
with em
ployee compensation, 2/ i t is by fa r the largest single sector where
th is occurs. In addition, the proportion of em
ploym accounted fo r by gov­
ent
ernment (including the m ilitary) has increased significantly daring the postwar
2/ The domestic and so e other personal services are other areas where
m
output is equated with compensation.




A -3

p e r i o d ,
l i m

i t

p a r t i c u l a r l y

t h e

m e a s u r e

o f

s i n c e

1 9 5 0 .

n a t i o n a l

I t

h a s ,

p r o d u c t i v i t y

t h e r e f o r e ,
t o

t h e

s e e m e d

p r i v a t e

p r e f e r a b l e

s e c t o r

o f

t o

t h e

e c o n o m y .

Included in the "private" sector, however, are those government activi­
tie s whose major function involves the sale of a product or service. These
a c tivitie s, called government enterprises, include, fo r example, the Post
Office, Tennessee Valley Authority, publicly ow
ned local u tilitie s , and
sim ilar enterprises.
So e of the major problems in the measurement of current and constant
m
dollar private gross national product, particularly as they affect the m
eas­
urement of real product per man-hour, are discussed below.
Current Dollar Estimates. The principal method used to develop e sti­
mates of the value of fin a l goods and services produced by the econom is the
y
"commodity flow" method. Th is procedure involves starting with com
modity out­
put data at producers* prices, segregating fo r each com
modity the portion of
to ta l output destined fo r fin a l use and not requiring further processing; and
then converting finished output at producers* prices to fin a l costs to u lt i­
m consumer by tracing the commodities through the various stages of the
ate
distributive system, i.e ., adjusting fo r exports and imports, Inventory change,
transportation charges, and distributive markups.
The Census of Manufactures, with it s vast com
modity detail, is the basic
source fo r the com odity flow approach. The census is available, however, fo r
m
benchm years only and estimates fo r the years in between are based on data,
ark
such as re ta il trade surveys, which are m h less satisfactory from the view­
uc
point of estimating output of various categories of fin a l goods and services.
For so e categories of personal consumption expenditures fo r c m o ­
m
o md
itie s , the com odity flow method is not considered feasible. These are e sti­
m
m
ated by multiplying quantities by average re ta il prices. The closeness of a
value derived in th is w to the actual value w ill depend upon the adequacy of
ay
the price data. I f the com
modity consists of several grades or styles, there
m y be a discrepancy unless a sufficient representation of the com odity is
a
m
included in the calculations.
There are, in addition, those items which are part of the national out­
put but do not enter into market transactions, such as food produced and con­
sum on farms. For these items values are Imputed.
ed
The Census of Business which collects data on the receipts of business
establishments by types, i.e ., laundries, beauty shops, automotive repair
shops, etc., provides m of the basic data fo r personal consumption expendi­
uch
tures fo r services. In addition, other government agencies and private trade
associations collect and publish data in tne areas not covered by censuses,
such as to ta l revenues of firm s engaged in transportation and u tility
businesses.




A - 4

T h e

a l l o c a t i o n

b e t w e e n

c o m m o d it ie s

a n d

s e r v i c e s

l i a b l e

f o r

m a k in g

d a t a

l o c a t i o n

i s

p u b lis h e d
i n

o t h e r

a p p a r e n t

d a t a

s h o w

c a s e s ,

f o r
t h e

l e v e l

o f

i s

m o r e

p e r s o n a l

n a t u r e

o f

b u s in e s s

b u s in e s s

a n d

a i r

i f f i c u

l t .

o r

c o n s u m p t io n

p o s s i b l e

e x p e n d it u r e s ,

t h e

u s e

b a s i s

f o r

l e v e l

GU P

a l ­

t h e

t h e

b a s i s

a l l o c a t i o n

o f

b o t h
r e ­

H o w e v e r ,

g a s o l i n e ,
i n

o f

t h e

o r

s e p a r a t e l y .
a n d

o f

l a c k

s e r v i c e ,

e r r o r s

t h e

e d i a t e )

o f

t h e

c o m m o d it y

t r a n s p o r t a t i o n ,

S in c e

c o n s u n q p tio n

( in t e r m

b e c a u s e

F r e q u e n t ly ,
t h e

a n d

r a i l
d

a n d

t r o u b le s o m e

a l l o c a t i o n s .

t h e

c o n s u m e r
a s

c o n s u m e r

s o m e t im e s

s u c h

fr o m

s u c h

a l l o c a t i o n

i s

i s

a f f e c t

a l s o

a f f e c t e d .

T h e

C e n s u s

g o v e r n m e n t
c o v e r e d
c h a s e s

b y
o f

f o r e i g n

m e th o d s

f o r

i n

t h e
a s

c o m p o n e n ts

GNP

p e r

t h e

o f

m a n -h o u r

t h o s e

i t

C e n s u s

r e c e n t

fe w e r

a s

d a t a

c o m p o n e n ts
p r o b le m s

o f

o f

s a l e s .

H o w e v e r ,

t h a n

c o m

b y

t h e

r e t a i l
T h is

m o v e

w it h

t o t a l

o t h e r

t h a n

t h e

p r i n c i p a l
s e l l

b u s in e s s

a n n u a l

s a l e s

o n e

o n

a

fr o m

s e g m e n ts

a t e

o t h e r
n o t

g o v e r n m e n t

c o n s t r u c t i o n ,

o f
m

f o r

s a m p le
I n

o f

t h i s

h a v e

t h e

c o n s u m p t io n




t h e

fr o m

C e n s u s

v a lu e s

p u r ­

a n d

n e t

e s t im

d a t a

a r e

t h e

a b o v e

o n

t h e

a r e

i m

a r e
t h e

T h e

p li c a ­
n o t

d a t a

r e v i s e d

f o r

i f

d i s c u s s i o n

a p p l i e s

n o n -C e n s u s

d a t a ,

d a t a

t y p e

c h a n g e s
fr o m

o f

s t o r e ,

i n

t h e

c o l l e c t e d

b y

t h a t

s a l e s

t y p e

o f

w h ic h

a x e

e x a m p le ,

o f

r e t a i l

s t o r e
o f

s t o r e s

r a t h e r
a

co m ­

com m od ­

w h o s e

s o

c l a s s i f i e d ,

o f

t h e

f u r n i t u r e .

p r o d u c e r

d u r a b le

S u r v e y

o f

M

t h e r e f o r e

b o t h

t h e

c u r r e n t

f o r
o f

m u ch

t h e s e

a n u fa c t u r e s .

i s

a n d

g o o d s

s h ip m e n t s

c o n s id e r e d

o f

c o n s u m p ­

o f

i n c lu d e

t h e r e f o r e

c o n s u m e r s

u s e d

p e r s o n a l

p u r c h a s e s

a r e

b e i n g

a r e

m o v e m e n t

F o r

a n d

a r e

o f

d a t a

w h a t e v e r

a s s u m p t io n

a n u fa c t u r e r s '

i t a t i o n s

b a s e d

a t e d

a n d

p a t t e r n

d a t a

a p p r a is in g

c o n s i d e r a t io n .

A n n u a l

o f

b e n c h m a r k s ,

c e n s u s e s .

a d d i t i o n a l

a v a i l a b l e
I n

y e a r - t o - y e a r

e n t s

l i m

h a v e

t h e

s i n c e

d a t a

t h e

p r o v id e

b e t w e e n

t h e s e

s o

a r e

a r e a ,

a d v a n ta g e

t h e

t h a t

e s t a b lis h m
t h e

c e n s u s e s

y e a r s

d a t a .

n o t e d

a r e

a

q u a n t it i e s

a t e d

t h e

a p p li a n c e s ,

o f

p u r c h a s e s

e s t im

D e s p it e
t h e y

o f

u n d e r

c o n s i s t s

a p p r e c ia b le

t h e

s a l e s

a r e

c o l l e c t e d

t i o n .

e s t im

p r i v a t e

f o r

b e c a u s e

w h ic h

i n v o l v e s

B u s in e s s
p e r i o d

t o

o b t a in e d

a t in g

b a s i s .

c o m m o d it ie s

m o d it ie s .

w h ic h

p u b lis h e d

GU P

p r e v i o u s l y ,

m a y

u s e d
n e w

a t e s

e x t r a p o l a t io n

i n d i c a t e d

f o r

a n

h e

a r e

A s

e x p e n d it u r e s

i t i e s

o f

a t io n

e s t im

p e r i o d s .

o n

o d it y

f o r

a r e

b e n c h m a r k

s h o u ld

a v a i l a b l e

m

in fo r m

b e n c h m a r k

r a t i o s

t h e

n o n -C e n s u s

f o r

e s t im

t h e

g e n e r a l l y

t i o n

d a t a
v a lu e

GU P

d e r i v in g

p e r i o d ,

w h e n e v e r

a r e

o f

s a t i s f a c t o r y

m o s t

F o r
t h e r e

S u p p le m e n t a l

e x t r a p o l a t in g

i n t e r c e n s a l

t h e

b y

a s s o c i a t i o n s ,

s e r v i c e s ,

p r o b le m

u s e d

n e c e s s a r y
t o

t h o s e

t h e

g e n e r a l l y
t h e

a n d

s u p p le m e n te d

t r a d e

in v e s t m e n t .

i s

t i o n s

a r e

a n d

c e n s u s e s .
g o o d s

F o r
t h e r e

d a t a

a g e n c ie s

s u b je c t

g e n e r a l l y

r e t a i l

v a lu e

b u s in e s s e s

s a l e s

d a t a ,

T h is
t o

s u r v e y

sem e

i s

s a m p lin g

a s
b a s e d
v a r i a ­

r e l i a b l e .

a n d

a n n u a l

r e f l e c t i n g

( f i n a l

p o s t w a r

c o m m o d it ie s

d e m a n d ).

t h e

s u r v e y

d a t a ,

c u r r e n t

A -5

F o r
v a lu e

so m e

d a t a

n o r

c u r r e n t

v a lu e

u r e d

t h e

a s

b y

o f

f o r

p a y r o l l s

a d e q u a t e ly
f a c t o r y

i n

p a r t i c u l a r l y

d a t a

p e r s o n a l

c h a n g e

r e p o r t e d

w it h

i n d u s t r i e s ,
q u a n t it y

a r e

c o n s u m p t io n

p a y r o l l s

u n e m p lo y m e n t

I g n o r e s

r e f l e c t

m e th o d

o f

t h e

t h e

o f

i n

i n

a n d

i s

f o r

e n t s

t h e s e

t h e

a ssu m e

t h a t

p r o f i t

m a r g in s

o n l y

w h en

n o

t h e

i s

o u t p u t

i s

m o v e s

a n d

t h e

o t h e r

m e a s ­

s e r v i c e s

T o

T h is

c u r r e n t

i n

s e r v i c e s

p r o v i d i n g

m a n -h o u r .

u s a d

n e i t h e r

c h a n g e

a n d

c o s t s

p e r

g r o u p ,

y e a r - t o - y e a r

p u r p o s e s .

o t h e r

o u t p u t

o u t p u t

s e r v i c e *

T h e

e s t a b lis h m

in s u r a n c e

m e a s u r in g

t h e

e x p e n d it u r e s

t h e

c h a n g e s

c h a n g e s

i n

a v a i l a b l e .

m a y -n o t

l e a s t

d a t a

s a t i s ­

a r e

a v a i l a b l e .

C o n s ta n t
t h e

e f f e c t

t e n d e d
a t

t o

o f
h e

e q u a l

c o n s t a n t

c u r r e n t
m e th o d
o f

o f

d a t a

r e f l e c t e d
n o t

g i v e

i n

b y

t h e
c o v e r

i n

t h e

sa m e

r e s u l t

d e t a i l

q u a l i t y

t o

o f

g r a d e s

o r

i s

b e

o f

p r i c e
t o

t h e

sa m e

p r a c t i c e ,

s h i f t s

c o u n t

t h e

t o

m a y

i s

-

i n ­

v a lu e d

d i v i d i n g

A n

a l t e r n a t i v e

tw o

b e

t h e

q u a n t it i e s
c o n s t a n t

p r o v i d i n g

p r i c e s .

t h a t

t h a t

m e th o d s

f o r

in d e x e s

m a y
i n

h ig h e r

m a y

t h e

a r e

a v a i l a b l e

d em a n d

p r i c e

w it h

b y

t h e

t h e

n o t

g r e a t e r

a p p r o p r ia t e

s e r v i c e

c o m m o d ity

h o w e v e r ,

GHP

v a lu e

t h e

b y

r e s u l t s

o f

d a t a

o r

c h a n g e .

th e m

u l t i p l y

d o l l a r

p lis h e d

a c t u a l l y

q u a l i t i e s

t h e

a c c o m

m

q u a n t it y

p o s s i b l e

c o m m o d it y

c u r r e n t

c o m m o d it y

e a c h
m a y

g i v e

I n
t h e

i s

o f

a n d

a n d

p r i c e s .
b e c a u s e

r e f l e c t

t h e

GHP

G D P

c o n s t a n t

in d e x

p e r i o d
s h o u ld

d o l l a r

d e s i r e d

v a l u a t i o n

d o l l a r

e a c h

m e th o d s

a l l

T h e

a p p r o p r ia t e

c o n s t a n t

tw o

C o n s t a n t

q u a n t it i e s

T h is

a n

d i f f e r e n t i a l

t h e

s u f f i c i e n t
lo w e r )

c u r r e n t

c o n s u m e d

T h e o r e t i c a l l y ,
q u a n t it y

GHP

a t e s .

r e m o v e d .

p r i c e s .

o b t a i n i n g

c o m m o d it ie s

E s t im

c h a n g e
t o

(1 9 5 * 0

v a lu e
o f

D o ll a r

p r i c e

n o t

( o r
b e

a v a i l a b l e .

I n
p o n e n t s

a c t u a l

o f

c a u s e d

b y

o u t p u t

p r a c t i c e ,

c u r r e n t

p e r

l i m

v a lu e

i t a t i o n s

m a n -h o u r

p r o c e d u r e s

u s e d

b y

r e a l

G H P .

o f

d a t a

r a t i o s .
t h e

O

GHP

i s

d e r i v e d

H o w e v e r ,
w h ic h

T h e s e

f f i c e

o f

t h e r e

s h o u ld

w

i l l

b e

l a r g e l y
a r e

b e

k e p t

n o t e d

B u s in e s s

b y

d e f l a t i n g

d e v i a t i o n s
i n

i n

m in d

t h e

E c o n o m ic s

fr o m

i n

f o l l o w

i n

t h e

t h e

co m ­

c o n c e p t

i n t e r p r e t i n g
i n g

d e r i v in g

su m m a ry

t h e

o f

c o n s t a n t

t h e

d o l l a r

G H P .

T h e
p e r s o n a l
m a te s

d e f l a t i o n

c o n s u m p t io n

m a d e

n a t i o n a l

i s

W

h o le s a le

c u l t u r e
in fo r m

t a b l e

P r i c e

a t io n

o f

a n d




t h e

u s e d

B u r e a u

I n d e x .

T h e s e

P r i c e s

P a id

fr o m

195**-

In c o m e

o f

i n

l a r g e l y

t h e

a n d

g o v e r n m e n t

C e a r n e r c e ,

sh o w n

i n

t h e

£ /

it e m s

o f

b y

t h e

t h e

D e p a r tm e n t

U .S .

c a l c u l a t e d
a n d

1 9 5 8 ,

J u l y
t a b l e

I n d e x

fr o m

b u s in e s s

C u r r e n t

N u m b e r s ,

N o v e m b e r

c o m m o d ity

P r i c e

a g e n c ie s

o f

i n d i v id u a l

e n d

I I - k .

a n d
o f

A g r i ­

p r i c e

s o u r c e s .

B u s in e s s ,
1 9 5 &

e s t i ­

p u b lis h e d

C o n s u m e r

in d e x e s

S u r v e y

In c o m e

F o r

s e p a r a t e

S t a t i s t i c s

F a r m e r s ,

d e t a i l *

o f

e x p e n d it u r e s .

s u p p le m e n te d

O u t p u t ,

c o n s i d e r a b l e
n u m b e r

80

a t e ly

c o n s u m p t io n

n a t i o n a l

a n d

o u t

i n s t a n c e ,

L a b o r

a r e
b y

o f

e n d

f o r

c o n s i s t

o t h e r

D e p a r tm e n t

U .S .

c a r r i e d

a p p r o x im

p e r s o n a l

t h e

S u p p le m e n t ,
3 0 ,

cm

in d e x e s

o b t a in e d

U .S .

t h a n

t a b l e

p r is in g

I n d e x

3 /
In c o m e

p r i c e

c o m

i s

e x p e n d it u r e s ,

g r e a t e r

in c o m e

T h e
in d e x e s

p r o c e d u r e

N a t io n a l
J u l y

1 9 5 7 ,

L im
in d e x e s
a l s o ,

it a t io n s

a r e

a s

l a t e r

a c t e r i s t i c s
t o

o t h e r

a n d

a n d

m o v e m e n t

c o l l e c t

e v e n

l e s s

t h e

s i d e r e d

o f

p r o b le m

T h e

f o r

p r i c e
o f

a d d i t i o n ,

t h e

p r i c e
t i o n

in d e x

o f

p r i c e

i n d e x e s ,
i s

n o t

o f

t h e

e a s e

o f

W h en

t h e

i t y

c o n s u m e r

fr o m

m a y

r a i s e

W h en

I t

b y

o t h e r

f l a t i o n

a n d

c h a r ­

s o l u t i o n s
t h e

l e v e l

a n d

i s
a r e

i s

o f

k n o w n

t h e

t o

e r r o r

b e

o f

J u d g e d

a

w e a k n e s s

in t r o d u c e d

b y

t h a t

o f

im

i s

o f

a

p u t a t io n
c o n ­

c o m m o d it y .

b e
o f

s i m
t h e

t h e

a l l

i t

b e i n g

im p u te d

t o

c o v e r

f e a s i b l e

s t y l e

p r i c e d

t h a t

f r e q u e n t l y

s

a n d

d e g r e e

a c t u a l l y

g r a d e s

n o t
n o t

f o l l o w

s i z e ,

l a r g e

i s

d o

t o

I n

m a n y

i l a r .

W

h ile

a v a i l a b l e

u n d e r ly in g

a s s u m p ­

a n d

a r e

p r i c e
i n

m u st

a r e

g e n e r a l l y
a s p e c t s

e s

o f

n o t

i n

p o s s ib le
g o o d s

a n

t o

f o r

o c c u r ,

t h e

i n
a s

p r i c e

c o m m o d ity
a p p e a r a n c e

c o m p a r is o n s

w it h

n o

c h a n g e

a t

t h e

t h e

p r i c e

C o n v e r s e ly ,
h a s

s u c h

a r t i c l e

im p r o v e d
i n

e x p r e s s

p r i c e d ,

i d e n t i c a l

q u a l i t y

r e f l e c t e d

in d e x e s

fr o m

o f

m

t h e

w o u ld

t h e

e f f e c t

w it h

i n

sa m e

i n d e x e s ,

o f

o v e r s t a t i n g

t h e
p r i c e .

t h e

e x c l u s i o n

o f

v a l u e .

d i f f e r e n t i a l s ,

d e ­
q u a l­

t h e

m e a s u r a b le ,
a

c o n t in u e

t o

I n

b y

c ir c u m ­

o f

GN P

p r i c e s

o f

t h e

t h e s e

t h a n

m a n u fa c t u r e r s

s u c h

p a id

w h ic h

r a t h e r

a n d

som e

l a g

l i s t

p a id

m a y

I n d e x ,

d e f l a t e d

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e i t h e r

g e n e r a l l y

t h e y

t h e

o v e r s t a t e m e n t

W h en

o f t e n

l e v e l s .

a n d

p a id

P r i c e

o v e r s t a t e d .

p r i c e

m a y

b e

in d e x

c o n d i t io n s

a n d

i s

c o r r e c t i o n

i s

g e n e r a l l y

r e c o g n i t i o n

i n

o f

t h e

h a v e

a n

e f f e c t

o n

t h e

p r e - ~
s h o r t -

G N P .

b e

a r e

i s

a r e

p r e m iu m s

p r i c e

b e

p r i c e s

h o le s a le

T h e s e

u n d e r s t a t e d
m ay

a c t u a l

W

s h o r t a g e s ,

c o n s e q u e n t

t h e r e

t h a t
t h e

p r i c e s .

d i s c o u n t s

d i f f e r e n t i a l s

a l s o

f o r

p u b lis h e d

b e

d e f l a t e d

s i n c e

f a c t

B L S

a t e r ia l

a b o v e

p r i c e s

t h e

b y

q u o t e d

p l e n t i f u l ,

t h e

im
o f

c o n s id e r e d

g e t t in g

p r i c e

a r i s e s

r e a l

g r o u p s .
p r o c e d u r e




i s

c o l l e c t e d

m o d e r a t e -in c o m e

A g r i c u l t u r e * s

i t

G N P .

in d e x

H o w e v e r ,

c h a n g e s

b y

m o d e ls

I t

g r a d e ,
a

t h a t

c o m m o d it y

e f f e c t

t h e

o f

t im

t h e

p a i d

t h e

i s

e c o n o m y .

e v e r y

c o n t a i n

a r e

p r i c e s

w id e s p r e a d

r u n

t h e

u n d e r s t a t e d .

p r i c e

q u o t e d

o f

i n
f o r

im p r o v e m e n ts

r e p o r t s

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v a le n c e

p r i c e

GNP

T h e

t h e

b o t h

in d e x e s

q u a l i t y

fr o m

u n d e r s t a t e m e n t

a p p li e d .

a s

o b v i o u s l y

GNP

I n

a c t u a l
t h e

t h a n

e l l

I t

i n

fr o m

s u p p l i e 's

lo w e r

w

a f f e c t

p r i c e

G N P .

c o m m o d it y

c o m m o d ity

i n

p r i c e s

p r i c e s .

s t a n c e s ,

a
I f

w e a k n e s s

t h e

d e v e lo p e d

a c t u a l

a s

d o l l a r

s e c t o r .

t h e

t h e r e f o r e

q u a l i t a t i v e

i s

c o m p o n e n ts

A n o th e r

i s

S t a t i s t i c s

p u b lis h e d

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o f

d e t e r i o r a t i o n

d i f f e r

i n d e x e s ,

m o v e m e n ts

b e c a u s e

c h a n g e .

c o m p o n e n ts

d e f l a t e d

L a b o r

c o n s t a n t

p r o c e d u r e ,

p r i c e

d i r e c t i o n

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im p r o v e m e n ts

f l a t e d

o f

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m a n u fa c t u r in g

p r i c e d

w h o s e

o p e r a t i o n ,

a c t u a l l y

p r i c e ,

t h e

p r i c e s

im p u t a t io n

F u r t h e r m o r e ,

o r

B u r e a u

k n o w n .

s p e c i f i c a t i o n s

m a y

t h e

p r i c e

c o m m o d it y

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t h e

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s p e c i f i e d

c o m m o d it ie s

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in c lu d e d

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i s

s e r v i c e s

p r i c e s

I n d e x e s .

o u t p u t

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i n

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in d e x

n e t

i t a t i o n s

d i f f e r e n t
t h e

P r i c e

e le m e n t s

a r i s i n g

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a n d

c o m m o d it y .
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l i m

m a jo r

c o n x o o d lt le s
t o

t h e

d e s c r i b e d ,

p r o b le m s

T h e

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s i g n i f i c a n t

S om e
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p r i c e s

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m ay

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i s

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U .S .

p r i c e s

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d e ­

D e p a r tm e n t

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A-7
u n r e p r e s e n t e d .
p u r c h a s e d

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O th e r
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i s

t h e s e

d e f l a t e d

A s p e c t s

c o l l e c t e d

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C P I ,

a p p a r e l,
e s t im

a t e d

I n d e x e s
t h e

b u t

p a r e l

p e n d it u r e
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a

c h a n g e

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O r

a s

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in d e x

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e v a lu a t e

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th e m

t h a n

p r o d u c t

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im p u t a t io n s

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c o s t

i s
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m

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t o

o n

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t h e i r

f o r

f o r

a r e
C P I

a n d

a p ­
E x ­

som e

b a s e

d e s i r e d

t h e

c u r ­

p r o d u c t

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a s s o c ia t e d

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im p o r t s

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b e t t e r

F o r

t h e

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m a y

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n o t

p r o d u c t
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c o s t
n o t

p r e p a r e d

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c o m m o d it ie s

u s e

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a lt h o u g h

t h e y

e x p o r t s ,

d e f l a t o r s
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m

e q u ip m e n t

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b u s in e s s

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m a n n e r

l i m

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s h o e

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s u c h

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i n

fr o m

t h e

b a s e d

A n

a n d

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o f

t h e

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c o m m o d it ie s

f i x e d

a n d

T h e o r e t i c a l l y ,

a t e d

t h a n

T h e

a p p a r e l

o f

i s

e s t im

i n t o

a t e d .

f o o t w e a r

a n d

t y p e

r a t h e r

t h e

e s t im
o f

p r i c e

a lw a y s

c o m b in e

w h ic h

in d e x e s

n o t

g r o u p .

C o m m is s io n .

T h e r e f o r e ,
t o

a t io n

u s u a l l y

o r

o f

t o

e a c h

G o v e rn m e n t

a n d

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n o t

d e v i a t e

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p r o d u c t

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f a c t o r

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s p i t e

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t h e

m ix

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d e f l a t o r s
t o

w h ic h

t h a n

i f

h a v e
t h e y

C P I

o r

t h e
a r e
W P I

a p p li e d .

a t e r ia ls

t h e

a r e

d i r e c t l y

a v a i l a b l e .

m a jo r

p e r

t h i s
w e r e

T h e

p r i c e s

I n

b e in g

t h e

v a lu e

p r i c e s .

t h e y

g r o u p in g s .

I n

t h a t

in d e x .

o p e r a t i o n s ,
C om m erce

a r e

f o o t w e a r

f o r

T h e s e

p r i c e s

c o n c e r n in g

fr o m

c o m m o d it ie s

a v a i l a b l e

d o e s

k in d s

p r o d u c t

p r i c e d

o t h e r

GU P

c o m p o n e n t

w e ig h t

t h e o r e t i c a l l y

p r o p e r l y .

i n d i v id u a l

o f

fr o m

ow n

a t io n

d e r iv e d

t h e

d i r e c t l y

I n t e r s t a t e
t h e

a r e

m o v e m e n ts ,

c a t a l o g

o b t a in e d

in fo r m

o f

o f

w e ig h t s ,
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t h e

n e c e s s a r y

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d e f l a t o r s .

t h e i r

b e c a u s e

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in d e x e s

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t h e

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t o

n o t

f o r

b y

t h e

p r i c e

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in c lu d e d

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in fo r m

d e t a i l
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u s e d

t h e

v e r y

im p o r t a n c e

S in c e

s e v e r a l

t h e r e f o r e

t h e

c o m b in in g

o d it ie s

f o r

e x p e n d it u r e s

t h e s e

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m

t h e y

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t h e

c o m p o n e n ts

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w e ig h t s

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s o u r c e s ,

a r e

g r o u p s .

som e

o t h e r

c o n s u m p t io n

m o v e m e n t
t h e

P r o c e d u r e .

p u r p o s e s ,

in d e x e s

fr o m

F o r
fr o m

e f l a t io n

o f

a f f e c t e d .

t h e

i n

s i g n i f i c a n t l y
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D

b e

p r i c e

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a r e

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p e r s o n a l

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i n s t a n c e ,

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p r o c e d u r e

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S in c e

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C ou n t o f Members o f O r g a n i z a t i o n s .
I n some c a s e s , an in d e x o f q u a n t i ­
t i e s h a s b e e n a p p l i e d t o t h e b a s e y e a r v a lu e t o o b t a i n c o n s t a n t d o l l a r e x p e n d ­
itu r e s .
T h is m eth od i s m ost f r e q u e n t l y a p p l i e d i n t h o s e a r e a s w h ere t h e c o n ­
c e p t o f t h e o u t p u t o f t h e s e r v i c e i s s u ch a s t o make a c c u r a t e m easurem ent
i m p o s s i b l e . How d o e s on e m ea su re an i n c r e a s e i n t h e r e a l v a lu e o f s e r v i c e s
p e r fo r m e d b y n o n p r o f i t o r g a n i z a t i o n s o r s c h o o l s ?
T o c o u n t t h e members o f an
o r g a n i z a t i o n i s t o a c c o u n t f o r o n l y one a s p e c t o f t h e v olu m e o f a c t i v i t y — i t
d o e s n o t i n d i c a t e w h e th e r s e r v i c e s p e r member o r p u p i l h ave ex p a n d ed o r d e ­
c lin e d .
T h e r e a r e m ore p u p i l s i n s c h o o l s , b u t i f t h e r e a r e m ore p u p i l s p e r
t e a c h e r an d o t h e r s c h o o l s e r v i c e s h ave b e e n c u r t a i l e d , t h e r e a l o u tp u t may n o t
k e e p p a c e w it h t h e i n c r e a s e i n t h e s c h o o l p o p u l a t i o n .
U n fo r t u n a t e ly , th e d i f ­
f i c u l t i e s i n v o l v e d i n m e a s u r in g t h e s e q u a l i t a t i v e a s p e c t s make a c o u n t t h e o n l y
p r a c t ic a l s o lu tio n .
Use o f E m ploym en t.
F o r a fe w c o m p o n e n ts , t h e movement o f t h e c o n s t a n t
d o l l a r v a lu e i s d e r i v e d b y d e f l a t i n g t h e c u r r e n t v a lu e b y an in d e x o f a v e r a g e
a n n u a l e a r n i n g s o r t h e b a s e y e a r v a lu e i s m oved d i r e c t l y b y an in d e x o f em­
p lo y m e n t o r m a n -h o u r s .
The c u r r e n t v a l u e s a r e g e n e r al l y t h o s e t h a t h a v e b e e n
e s t i m a t e d fr o m t h e movem ent o f p a y r o l l s and t h e same l i m i t a t i o n s o f c a l c u l a t i n g
o u t p u t w i t h o u t r e g a r d t o c h a n g e s i n o u tp u t p e r m a n -h ou r a p p l i e s .
T h is i s c l e a r
s i n c e w i t h an i n c r e a s e i n o u t p u t p e r m a n -h o u r, o u tp u t m oves f a s t e r th a n e m p lo y ­
m e n t, and w i t h a d e c l i n e , o u t p u t m oves m ore s l o w l y th a n em p loy m en t.
I n a d d i t i o n , some o f t h e c u r r e n t v a l u e s d e r i v e d fr o m p a y r o l l d a t a h av e
b een d e fla t e d b y p r ic e in d e x e s .
W h ile t h i s i s an im p rov em en t o v e r d e r i v i n g
r e a l p r o d u c t fr o m t h e m ovem ent o f em p lo y m e n t, t h e s e c a n n o t b e c o n s i d e r e d d e ­
f l a t e d v a l u e s s i n c e t h e a s s u m p tio n t h a t c u r r e n t o u tp u t m oves w i t h p a y r o l l s
i g n o r e s t h e o u t p u t p e r m a n -h ou r f a c t o r .
M a jo r S e c t o r s o f t h e E conom y
I t has a lr e a d y b e e n in d ic a t e d th a t th e g r o s s n a t io n a l p r o d u ct f o r th e
eco n o m y i s e q u a l t o th e sum o f GUP o r i g i n a t i n g i n t h e v a r i o u s s e c t o r s o f t h e
e co n o m y .
The GHP o r i g i n a t i n g i n a s e c t o r o r i n d u s t r y i s , i n t u r n , e q u a l t o
t h e v a lu e o f o u t p u t m inus t h e v a lu e o f in t e r m e d i a t e g o o d s and s e r v i c e s c o n ­
sum ed. The v a lu e a d d e d o r n e t o u t p u t o f t h e i n d u s t r y , when s t a t e d i n c o n s t a n t
d o l l a r s , i s th e " r e a l " p r o d u c t o f th e s e c t o r o r in d u s t r y .
S in c e th e n e t o u t ­
p u t ca n n o t b e d e f l a t e d d i r e c t l y , th e r e a l p r o d u c t i s e s tim a te d b y s e p a r a t e ly
d e f l a t i n g t h e v a lu e o f p r o d u c t i o n and m a t e r i a l s and s e r v i c e s consum ed and
d e r i v i n g a r e s i d u a l w h ic h i m p l i c i t l y m e a su re s t h e n e t o u t p u t o r v a lu e a d d ed
in co n sta n t d o l l a r s .
I n t h e U n it e d S t a t e s , e s t i m a t e s o f r e a l p r o d u c t c o n ­
s i s t e n t w i t h t h i s c o n c e p t and m e t h o d o lo g y h a v e b e e n p r e p a r e d f o r tw o m a jo r
s e c t o r s ; a g r i c u l t u r e and m a n u fa c t u r in g .
The e s t i m a t e s f o r a g r i c u l t u r e h ave
b e e n d e v e l o p e d b y t h e O f f i c e o f B u s in e s s E c o n o m ic s , U . S . D ep a rtm en t o f Com m erce;
e s t i m a t e s f o r m a n u fa c t u r in g , b y t h e B u rea u o f L a b o r S t a t i s t i c s , U . S . D ep artm en t
o f L abor.
T h e s e e s t i m a t e s h a v e made i t p o s s i b l e t o d e r i v e a d d i t i o n a l s u b t o t a l s
f o r t h e t o t a l n on fa rm econ om y and f o r t o t a l n o n m a n u fa c tu r in g i n d u s t r i e s .




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s i n c e

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b a s e d

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s e c o n d a r y

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b a s e d

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e a c h

p r e p a r e d —

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c o n s u m e d

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fr o m

v a lu e

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c o m m o d it ie s

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p r i c e

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w it h

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2

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v a lu e

s u p p ly in g

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1 9 ^ 7

f o r

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d e f l a t o r s

t e s t ,

w e r e

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in d e x e s

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a n d

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o t h e r

t h o s e

p r i c e

g o o d s

C e n s u s

s h ip m e n t s
t h e

19 ^ 9 - 5 7 >

a n d

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o n

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p a r a g r a p h ,

m a n u fa c t u r in g

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i n d i v i d u a l

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1 9 ^ 9 -5 7

d a t a

M

t h e

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c o n s u m in g

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t h e

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f o r

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a l l

19 ^ 7

o f

s p e c i a l l y

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1 9 ^ 7

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i n d u s t r y .

c o r r e c t
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d o l l a r

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c l a s s i f i e d
t h e r e f o r e

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b y

e s t im

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A -1 1

To derive estimates more consistent w ith the net output concept and to
Improve th e ir accuracy, several important adjustments of the data were made.
F ir s t , estimates of the value of shipments (in constant d o lla rs ) were adjusted
to include the constant d o lla r value of the net change in finishe d goods and
goods-in-process in ve nto rie s. Census data on beginning- and end-of-year book
values of fin ish e d goods inventories fo r 1 9 ^ 7 and 1950 to 1 9 5 7 were deflated
by industry p ric e indexes as of the end of the year. Since separate annual
data on goods-in-process Inventories are not available p rio r to 1 9 5 3 ; special
estimates of these inventories were developed by applying ra tio s based on
O ffice of Business Economics series on in ve nto rie s, by stage o f fa b ric a tio n ,
to Census published to ta ls of inventories of goods in process and m aterials.
In a d d itio n , the cost of m aterials was adjusted at the to ta l manufacturing
le v e l fo r changes in fre ig h t ra te s.
Although i t is not possible to calculate p re cise ly the margin of e rro r
of the net output index, a review of some factors a ffecting the r e lia b ilit y
of the estimates provides some basis fo r a q u a lita tive appraisal of the re s u lts .
The basic annual Census data on d o lla r value of shipments, Inve nto rie s,
cost of m aterials, and man-hours, collected by means of a sample survey, are
subject to sampling e rro r. For some in d u strie s, the sampling e rro r is la rg e ,
but fo r manufacturing as a whole, i t is re la tiv e ly in s ig n ific a n t. In a dditio n,
Census estimates are subject to e rro rs of reporting to an unknown degree.
Other sources of e rro r in net output estimates are the lim ita tio n s of
the p rice Indexes used in d e fla tin g current d o lla r values. Since the p rice
index used in constructing the net output series in base year prices was
calculated w ith 1 9 ^ 7 rather than given year quantity weights, the re s u lt
approximates the th e o re tic a lly correct se rie s. BLS wholesale p rice indexes
are based on quoted ra the r than actual prices and therefore may not be repre­
sentative of the changes in monetary values embodied in the Census values. In
constructing the index fo r d e fla tin g industry shipments, some e rro r may he
introduced because the p rice movements of a selected number of products may
not be p re cise ly representative of the movement of a l l products of the indus­
t r y . In a dditio n, the assumption that the prices of secondary products move
as the prices of prim ary products may introduce in to the industry estimates
an e rro r, which nevertheless is not considered to be s ig n ifica n t fo r manufac­
tu rin g as a whole.
In developing the m aterial cost index, an index of average prices fo r a
supplying industry was assumed to be representative of the p a rtic u la r product
or group of products purchased from that industry by a consuming in d u stry.
A lso , because of the lack of data, no account is taken of changes in trade
margins.
F in a lly , since net output is calculated as the difference between gross
output and m aterials consumed, fo r in d ivid u a l in dustries the e rro r in th is




A -1 2
difference may be la rg e r than the e rro r in the two to ta ls from which i t is
derived. There is no reason to suppose, however, that any general bias is
introduced by th is procedure.
Index fo r 19 *8 . The detailed value data required fo r ca lcu la tin g GUP
<
fo r manufacturing fo r 19 ^ 8 are not available since there was no annual survey
in 19 *8 . A gross measure was substituted fo r the desired net output index
i
fo r th is year. Th is was based on the d e fla tio n of manufacturers’ sales, ad­
justed fo r change in inventories of finishe d products and goods in process.
The data on manufacturing sales and inventories were from the published e s ti­
mates of the O ffice of Business Economics, U .S . Department of Commerce. The
adjusted sales at the to ta l manufacturing le v e l were deflated separately fo r
to ta l durables and nondurables and then combined w ith value added weights.
The p rice deflators were special BLS price indexes fo r durable and nondurable
manufactured products.
Th is gross measure d iffe rs from net output in that i t is a duplicated
output fig u re . I t resembles the net output measure in that in du stry s h ifts
are re fle cte d but the change in the Importance of indu strie s is defined in
terms of gross output, including purchases from other in d u s trie s . However,
the use of "value added" weights to combine the separate indexes fo r durables
and nondurables brings the to ta l manufacturing estimate somewhat closer to
the net output measure.
Estimated 195 * GNP fo r Manufacturing. An estimate of GNP fo r the manu­
*
fa ctu rin g sector fo r 195 ^ can be derived beginning w ith Census value added or
national income o rig in a tin g in manufacturing. Each method requires d iffe re n t
adjustments to conform to the concept, but the data necessary fo r making pre­
cise estimates are not available from these sources. However, one can a rrive
at a rough approximation of manufacturing GNP by using data obtained from
other sources.
As was previously mentioned, Census value added d iffe rs from true net
output 8 / in that the former includes some intermediate services and excludes
some in d ire c t business taxes. A rough adjustment was made by estim ating
Federal excise taxes o rig in a tin g in manufacturing, from Bureau of In te rn a l
Revenue data and estim ating the intermediate services from data developed by
BLS in the course of it s study of in te rin d u s try re la tio n s .
N ational income o rig in a tin g in manufacturing d iffe rs from net output by
the value of a l l in d ire c t business taxes and the value of depreciation. An
adjustment was made by d e rivin g estimates of these values from BIR reports
and BIB in te rin d u s try data.
8J

For d e fin itio n of sector net output, see p . A - 8 .




A-13
I t was not p o ssib le to complete the conceptual re c o n c ilia tio n o f the
Census based and N ational Income based fig u re s , because o f lack o f data. A
d iffe re n c e in the re s u lts was to be expected from the fa c t th a t the basic
data are compiled from d iffe re n t sources w ith basic d iffe re n c e s in concept.
However, the d iffe re n c e was not very large and i t was decided to accept as the
f in a l estim ate a fig u re o f $107 b illio n , the N a tio na l Income based fig u re .
Only the absolute GNP per man-hour i s a ffected by t h is e stim a te . The index
o f GNP per man-hour in manufacturing remains the same re ga rd less o f t h is 195^
value o f manufacturing net o utp ut.
Nonmanufacturing. The value o f re a l product fo r the nonmanufacturing
se cto r i s a re sid u a l derived by su b tra c tin g manufacturing net output from
p riv a te n o n a g ric u ltu ra l GNP. Th e re fo re , any e rro rs in the d e riv a tio n o f the
farm and manufacturing re a l product estim ates w il l be re fle c te d in the non­
manufacturing se c to r.
Labor In p u t
General. As p re v io u sly ind ic a te d , the re i s no one " o ffic ia l" se rie s
which measures aggregate la b or in p u t. Two s e rie s have th e re fo re been devel­
oped fo r t h is re p o rt, one based p rim a rily on Census Bureau data, the o the r
based p rim a rily on employment and hours data published by the Bureau o f Labor
S t a t is t ic s . In concept, the form er se rie s covers hours worked; the la tte r
covers hours paid. W hile n e ith e r se rie s i s completely adequate, each one may
be u s e fu l in measuring output per man-hour.
The la b o r force estim ates o f the Census Bureau provide data on to ta l
persons engaged in production, covering a ll wage and sa la ry employees, s e lfemployed, and unpaid fa m ily w orke rs. The same source provides data on average
weekly hours worked by those at work. These estim ates do not provide much
d e ta il, however, on the in d u s tria l composition o f the la b or fo rc e ; the only
hours d is trib u tio n s published fo r component se c to rs are a g ric u ltu re and
n o n a g ric u ltu re .
The lack o f se c to r and in d u stry d e ta il in the Census lab or force data i s
not a lim ita tio n from the view point o f e stim a tin g n a tio n a l output per man-hour,
but i t does represent an im portant lim ita tio n i f the estim ate a t the n a tio n a l
le v e l is considered as p rovid ing the framework fo r estim ates and a n a ly sis o f
output per man-hour fo r major se c to rs and in d u s trie s . I t p ro vid e s, fo r
example, l i t t l e in fo rm a tio n on which to base an a n a ly sis o f the e ffe c t o f
changes in the d is trib u tio n o f employment on aggregate output per man-hour.
In c o n tra st to the lim ite d d e ta il o f the Census lab or force data, the
Bureau o f Labor S t a t is t ic s estim ates provide considerable d e ta il on the in d u s­
t r i a l composition o f wage and sa la ry employees. They a re , however, more lim ite d
in coverage than the lab or force e stim a te s. They do not cover a g ric u ltu ra l
employment, self-em ployed, and unpaid fa m ily w orkers. Domestics are a lso
om itted from the BLS s e rie s . Estim a te s o f average weekly hours are provided
fo r most o f the in d iv id u a l in d u s trie s and se c to rs covered by the B LS , but there
are s ig n ific a n t gaps, p a rtic u la rly in finance and se rvic e s and nonproduction




workers in m anufacturing. In the estim ates developed in t h is re p o rt, the BLS
data have been supplemented from other sources in order to f i l l in gaps in
hours and provide the a d d itio n a l coverage to make them more comparable to the la b or
force e stim a te s. T h is has been done in order to a rriv e at an estim ate fo r the
to ta l p riv a te economy (excluding general government) which would a t the same
tim e provide in d u s tria l d e ta il fo r fu rth e r a n a ly sis. The Bureau o f Labor
S t a t is t ic s weekly hour estim ates are based on the concept o f hours paid, as
d istin g u ish e d from the hours worked concept o f the Census data.
In a d d itio n to the d iffe re n c e s in concept, another reason fo r developing
two estim ates i s to provide a p a rtia l check on whether the tre n d indicated by
one measure is roughly in lin e w ith the tre n d o f the o the r measure. T h is i s
a t b e st only a p a rtia l check since p a rt o f the data needed to supplement the
BLS estim ates are derived from unpublished lab or force e stim a te s. In a d d itio n ,
the re are c e rta in d iffe re n c e s in coverage and d e fin itio n s which would a ffe c t
the comparison. I t was f e l t , however, th a t in sp ite o f these d iffe re n c e s, the
problems o f obtaining accurate estim ates o f employment and hours o f work from
any one se t o f data was such th a t i t would be desira ble to obtain a lte rn a tiv e
estim ates as a p a rtia l check on the estim ated tre n d in to ta l man-hours.
Bureau o f the Census Labor Force Data
D e sc rip tio n o f Survey. The Census data on employment and hours o f the
c iv ilia n n o n in s titu tio n a l population were obtained from the Monthly Report on
the Labor Forc e, one o f the C urrent Pop ula tion Survey re p o rts . The data are
based on the re s u lts o f personal in te rv ie w s during a p a rtic u la r week w ith a
sample o f the households throughout the country selected by s c ie n tific sampling
methods. P r io r to J u ly 1955> the survey week was th a t which included the 8 th
o f the month. T h is was changed to the week ending nearest the 15th o f the
month. Employment estim ates here are based on a count o f persons employed.
A person holding more than one job i s counted once in t h is survey.
In a d d itio n to the employment and hours e stim a te s, data are obtained on
the la b or fo rc e , unemployment, and othe r economic c h a ra c te ris tic s . The fo llo w ­
ing c r ite ria are used fo r c la s s ify in g persons on the b a sis o f th e ir a c tiv ity .
C iv ilia n Labor Force. The la b or force comprises a ll c iv ilia n s l 1 years
*
o f age and over who are employed o r unemployed.
Employed Pe rso n s. Employed persons comprise a ll those who, during the
survey week, did any work a t a ll as paid employees o r in th e ir own b usine ss
o r p ro fe ssio n , o r on th e ir own farm , o r who worked 1 5 hours o r more as unpaid
workers on a fa m ily farm or b u sin e ss, and those who were not working o r looking




A-15
fo r work b ut who had jobs o r b usinesses from which they were te m p o ra rily absent
because o f illn e s s , vacation, bad weather, in d u s tria l d isp u te , o r because they
were ta king tim e o f f fo r va rio u s other reasons.g/
Unemployed. The unemployed comprises a ll persons who did no work a t a ll
in the survey week and who were looking fo r work, o r i f not looking were tem­
p o ra rily i l l o r believed no work available in th e ir lin e o f work o r in the
community.
Hours Worked. The s t a t is t ic s on hours worked p e rta in to the actual num­
ber o f hours worked during the survey week. F o r persons working in more than
one jo b , these fig u re s re la te to the number o f hours worked in a ll jobs during
the week. Persons w ith jo b s, but not at work d uring the survey week, are ex­
cluded from the computation o f average hours worked.
In d u s try . The data on in d u stry re la te to the job held during the survey
week. Persons employed at two or more jobs were reported in the job at which
they worked the g re a te st number o f hours during the week.
Adjustments to Data. Several adjustm ents were made to the basic Census
data as published in the Monthly Report o f the Labor Force. The a g ric u ltu re
data as published do not c o n stitu te a continuous se rie s from 1 9 ^ 7 to 1958, be­
cause o f changes made in the e stim a ting procedures in 1 9 5 3 > and the change from a
19^0 to a 1950 population benchmark. These changes re su lte d in a considerable
increase in the estim ate o f a g ric u ltu ra l employment. To make the se rie s fo r
19^7-52 comparable w ith the a g ric u ltu re data fo r the more recent y e a rs, an
adjustment was made by applying the calculated increase in the employment
estim ates caused by the re v is io n s , to the 1950-52 data, and p ro ra tin g t h is
increase backwards to I 9 V 7 .
In the development o f data fo r the p riv a te economy, i t was a lso necessary
to deduct estim ates o f general government employment. Since estim ates o f
general government employees are not given in the Monthly Report o f the Labor
Force, data on Fe d e ra l, S ta te , and lo c a l employment o the r than government
e n te rp ris e s, taken from U .S . Income and O utput, Table V I-1^, 10/ were subtracted
from the Census n o n a g ric u ltu ra l employment data.
The hours worked data were computed by m u ltip ly in g annual average e s t i­
mates o f persons a t work (as d istin g u ish e d from persons employed) by average
hours worked. In order to compute man-hours in a g ric u ltu re , i t was necessary

9 / E ffe c tiv e January 1957, persons on la y o ff w ith in s tru c tio n s to re tu rn
to work w ith in 30 days o f la y o ff and persons w a itin g to s ta r t new wage and s a l­
ary jobs w ith in the fo llo w in g 30 days are c la s s ifie d as unemployed. Such per­
sons had been p re v io u sly c la s s ifie d as employed (w ith a job b ut not at w ork).
Estim a te s given in t h is re p o rt are c o n siste n t w ith the new d e fin itio n .
10/ See Appendix F , Bib lio g ra p h y .




A-16
to a d ju st the published estim ates o f persons a t work fo r the years 1947-52 fo r
com parability w ith the published data fo r la te r yea rs. The estim ates o f persons
a t work in a g ric u ltu re were derived by ta king the ra tio o f persons a t work to
to ta l employed in the published s e rie s and applying t h is ra tio to the adjusted
a g ric u ltu ra l employment se rie s fo r 1947-52.
In computing the to ta l man-hours in n o n a g ric u ltu ra l in d u s trie s , a number
o f adjustm ents were re q u ire d . The annual average o f weekly hours worked, as
published in the Monthly Report o f the Labor Force, was adjusted to m inimize
the e ffe c ts o f the shortened workweeks in months in which le g a l and re lig io u s
holidays occurred during the survey week. Since the data fo r the survey week
are being used to represent the average fo r the month, the in c lu sio n o f data
fo r holiday weeks creates a considerable e rro r in the average hours data. There­
fo re , the average fo r each year was computed on the b a sis o f nonholiday weeks.
T o ta l hours in n o n a g ric u ltu ra l in d u s trie s were computed by m u ltip ly in g
estim ates o f persons at work in n o n a g ric u ltu ra l in d u s trie s by the adjusted
average hours data. The p riv a te n o n a g ric u ltu ra l hours were derived by sub­
tra c tin g the hours in general government from t h is to ta l. In order to d e rive
the "a t work" estim ate fo r general government, i t was f i r s t necessary to a d ju st
the employment data fo r school employees, who are c a rried as employed d uring
the summer months in the N ational Income S e rie s , by assuming a 10-week vacation
and m u ltip ly in g th e ir employment by 42/52. The sum o f the adjusted school em
­
ployment estim ate and the Fe d e ra l, S ta te , and lo c a l o the r than school was then
m u ltip lie d by 95 percent, assuming a 5-percent "n o t a t work" ra te — s lig h tly
higher than nongovernmental employees— fo r an estim ate o f persons a t work in
general government. In order to derive the government ho u rs, the "a t work"
estim ate was m u ltip lie d by the average hours in p ub lic a d m in istra tio n from the
Monthly Report o f the Labor Force unpublished data and the to ta l hours thus
derived fcere subtracted from the to ta l n o n a g ric u ltu ra l hours estim ate.
In order to obtain an estim ate o f average weekly hours worked which could
be re la te d to the estim ate o f the number employed, as d istin g u ish e d from the
number a t work, an adjusted average weekly hours estim ate fo r each se c to r o f
the economy was derived by d iv id in g the to ta l meua-hours fo r each se c to r by an
employment estim ate . Published Census data on average hours apply to persons
a t work only and do not include employed persons w ith a job but no t a t work,
whether on paid o r unpaid leave. The employment fig u re includes persons who
did no work a t a ll during a survey period , but who were c la s s ifie d by the
Census Bureau as employed. The e ffe c t o f t h is adjustment is to low er the
average weekly hours to include the "ze ro " hours o f the group o f persons w ith
a job but not a t work. I t does n o t, however a ffe c t the to ta l h o u rs.
Some Q u a lific a tio n s o f Labor Force Data. Some la b o r fo rc e concepts should
be kept in mind in evaluating the Census based measures o f employment and h o u rs.
The la b o r fo rc e estim ates include only workers 14 years o f age and over and
th e re fo re exclude about 1 m illio n workers under the age o f 14 employed a t farm
jobs a t c e rta in seasons o f the yea r, and about a h a lf m illio n a t nonfarm jo b s.




A-17
In a d d itio n , the Census method o f counting a worker only once a t h is major
a c tiv ity , whether farm o r nonfarm, and a ssigning the to ta l number o f hours
worked to the major a c tiv ity , may lead to an e rro r in the estim ate o f a g ri­
c u ltu ra l versus n o n a g ric u ltu ra l h o u rs.
Also to be considered in evaluating the data i s the fa c t th a t the Census
data are obtained through personal in te rv ie w s w ith a sample o f households,
selected in accordance w ith a p ro b a b ility design, and are th e re fo re subject
to sampling e rro rs , as w e ll as e rro rs in response and enumerative e rro rs .
The "response" o r "enumerative" e rro r may re s u lt in the m issing o f the p a rttime o r marginal worker o r the concentration o f hours at the usua l AO-hour
workweek ra th e r than at actual hours worked. The data are a lso lim ite d by
the adequacy o f the in fo rm a tio n possessed by the respondent and the w illin g n e ss
to re p o rt accurately.
Bureau o f Labor S t a t is t ic s Employment and Hours Data
General D e sc rip tio n . Estim a te s o f employment and hours fo r the B IB
based measure were obtained by use o f the BLS n o n a g ric u ltu ra l employment and
hours estim ates supplemented by data from other sources. Published B IS e s ti­
mates o f n o n a g ric u ltu ra l employees by in d u stry , and hours o f workers were taken
from the BLS Employment and Ea rnings re p o rts. The B IS s t a t is t ic s are based on
p a y ro ll records from a sample o f establishm ents among which large e sta b lish ­
ments predominate. Changes from one month to the next in the employment re ­
ported by the sample respondents are applied to benchmark to ta ls based p rim a rily
on unemployment compensation re tu rn s made by employers. The B IS employment
se rie s do not cover domestic w orkers, self-em ployed, or unpaid fa m ily w orkers;
the weekly hours se rie s do not cover c e rta in a d d itio n a l ca tegories. F o r pur­
poses o f t h is re p o rt, the excluded areas were estimated from o th e r sources.
Weekly Hours and To ta l H ours. The BLS c o lle c ts employment data fo r a ll
se c to rs o f the p riv a te nonfarm economy. Average hours data, on the o the r hand,
are available fo r production workers in manufacturing and nonsupervisory workers
in c e rta in nonmanufacturing in d u s trie s . In computing the to ta l hours fo r indus­
t r ie s except fo r manufacturing, the hours o f su p e rviso ry employees were assumed
to be the same as fo r nonsupervisory w orkers. Employees' hours were computed
by m u ltip ly in g estim ates o f employees by average hours o f nonsupervisory workers
fo r each in d u stry . F o r manufacturing, since estim ates o f both production workers
and production worker weekly hours are re a d ily a va ilab le from published re p o rts,
the hours estim ates were computed by m u ltip ly in g estim ates o f production workers
by average hours and adding to th is fig u re the hours o f nonproduction workers
derived by making an assumption th a t such persons work a AO-hour week. The
average hours data, in th is B IS type measure, re fe r not only to hours worked
but, according to the B IS concept, a d d itio n a l hours paid fo r but not worked,
such as paid sic k leave, ho lid a ys, and vacations.




S u p p le m e n ta r y D a t a .
S i n c e t h e BLS d a t a a r e l i m i t e d t o n o n fa rm e m p lo y e e *
( e x c l u d i n g d o m e s t i c s ) , e s t i m a t e s f o r fa rm em p loy m en t, n o n fa rm s e l f - e m p l o y e d ,
u n p a id f a m i l y w o r k e r s , an d d o m e s t i c s w ere o b t a i n e d fr o m o t h e r s o u r c e s .
In
a d d i t i o n , p a r t s o f t h e n o n fa rm a v e r a g e w e e k ly h o u r e s t i m a t e s n o t c o v e r e d b y
BLS w e re a l s o su p p le m e n te d b y d a t a fr o m o t h e r s o u r c e s . F o r e x a m p le , a v e r a g e
h o u r s i n t h e s e r v i c e i n d u s t r i e s an d i n f i n a n c e en d r e a l e s t a t e w e re o b t a i n e d
fr o m t h e C en su s M o n th ly R e p o r t o f t h e L a b o r F o r c e u n p u b lis h e d s e r i e s .
The C en su s M o n th ly R e p o r t o f t h e L a b o r F o r c e s e r i e s was a l s o t h e s o u r o e
f o r e s t i m a t e s o f a g r i c u l t u r a l em ploym ent and h o u r s .
I n c o m p u tin g h o u r s w o r k e d ,
a v e r a g e h o u r s d a t a w e re a p p l i e d t o e s t i m a t e s o f p e r s o n s M m p lo y e d n i n s t e a d o f
e
" a t w o r k ," f o r c o m p a r a b i l i t y w it h t h e BLS c o n c e p t o f h o u r s w ork ed o r p a i d .
By
u s i n g t h e e m p lo y e d f i g u r e , an i m p l i c i t a s s u m p tio n was made t h a t p e r s o n s who h e l d
fa rm j o b s , b u t w ere a b s e n t fr o m w o r k , w e re p a i d .
The same p r o c e d u r e was u s e d
t o a p p r o x im a t e h o u r s p a i d i n o t h e r i n s t a n c e s w h ere C en su s d a t a o n w e e k ly h o u r s
w e re u s e d t o s u p p le m e n t BLS d a t a , e . g . , s e r v i c e s , f i n a n c e , r e a l e s t a t e , e t c .
A lt h o u g h t h e BLS s t a t i s t i c s c o v e r g o v e rn m e n t em p loy m en t, s e p a r a t e d a t a
a r e n o t shown f o r g o v e rn m e n t e n t e r p r i s e s w h ich s e l l t h e i r "p r o d u c t* 1 ( P o s t
O f f i c e , TVA) and a r e t h e r e f o r e c o n s i d e r e d i n t h e N a t io n a l In com e fra m ew ork t o
b e p a r t o f t h e p r i v a t e e co n o m y . F o r t h i s s e r i e s , t h e e s t i m a t e s o f e m p lo y e e s
o f g o v e rn m e n t e n t e r p r i s e s a s shown i n t h e N a t i o n a l In com e S u p p lem en t and t h e
a v e r a g e h o u r s o f p u b l i c a d m i n i s t r a t i o n w o r k e rs fr o m t h e M o n th ly R e p o r t o f t h e
L a b o r F o r c e w e re u s e d a s p a r t o f t h e e s t i m a t e o f t o t a l p r i v a t e m a n -h o u r s .
E s t im a t e s o f a c t i v e p r o p r i e t o r s i n u n i n c o p r o r a t e d e n t e r p r i s e s w ere ta k e n
fr o m t h e N a t io n a l In com e S u p p le m e n t and w ere d e r i v e d b y s u b t r a c t i n g t h e f u l l ­
t im e e q u i v a l e n t e m p lo y e e s fr o m t h e t o t a l number o f p e r s o n s en g a g ed i n p r o d u c ­
t i o n , b y in d u s tr y .
E s t im a t e s o f t h e num ber o f d o m e s t ic s w e re a l s o o b t a i n e d
fr o m t h e same s o u r c e .
The a v e r a g e h o u r s f o r t h e s e g r o u p s w e re o b t a i n e d fr o m
u n p u b lis h e d C en su s d a t a o n h o u r s w o rk e d .
U n paid f a m i l y w o r k e r s i n c l u d e d i n t h i s m ea su re a r e p e r s o n s w o r k in g w it h ­
o u t p a y i n f a m i l y b u s i n e s s f o r 1 5 h o u r s o r m ore d u r in g t h e w e e k . T he e s t i m a t e s
o f num ber o f p e r s o n s and t h e a v e r a g e h o u r s w ork ed w e re ta k e n fr o m t h e C ensus
M o n th ly R e p o r t o f t h e L a b o r F o r c e .
In e v a l u a t i n g t h e d a t a , i t i s im p o r t a n t t o k e e p i n m ind t h a t a s s u m p tio n s
and im p u t a t io n s h a v e b e e n m ade, and d a t a h a v e b e e n u s e d fr o m d i f f e r e n t s o u r c e s ,
b a s e d on d i f f e r e n t c o n c e p t s .
In a l l , f o r th e y e a r 1 9 5 5 , o n e -fo u r th o f th e t o t a l
em ploym ent f i g u r e i n t h e BIS b a s e d m ea su re was t a k e n fr o m s o u r c e s o t h e r th a n BLS,
and t h e h o u r s o f o n e - h a l f o f t h e e m p lo y e e s w e re e i t h e r o b t a i n e d fr o m o t h e r s o u r c e s
o r im p u te d fr o m o t h e r BIS d a t a .
O f t h e n on fa rm e m p lo y e e t o t a l ( i . e . , e x c l u d i n g
fa r m , s e l f - e m p l o y e d , and u n p a id f a m i l y w o r k e r s ) , o n l y 7 p e r c e n t o f em ploym ent
was d e r i v e d fr o m o t h e r s o u r c e s , and t h e h o u r s o f o n e - t h i r d o f t h e e m p lo y e e s w e re
e i t h e r im p u te d fr o m o t h e r BLS d a t a o r came fr o m o t h e r s o u r c e s .




Table A - l .

Employment, man-hours, r e a l p rodu ct, r e a l product per man-hour, and hours paid per d o l l a r o f r e a l p r o d u c t, 19^7—
5®
(Man-hour estim ates based p rim a rily on Bureau o f Labor S t a t i s t i c s data)
Item

1948

1949

1950

1951

1952

1953

1954

1955

1956

1957

1958

55,769
8,2 2 7
47,542
15,504
32,038

54,581

57,639
7,3 82
50,257
16,305
33,952

58,241

59,055
6,5 55

52,500

17,440

35,060

16,188

53,111
16,748

6 1 ,3 7 7
6,5 72
54,805

61,232
6,222

51,115
16,539
34,576

57,582
6,4 95
51,087

59,829

7,126

46,263
14,363
31,900

55,632
7,8 31
47 ,801
15,161
32,640

34,899

36,363

37,715

38,043

59,048
5 ,8 4 4
53 ,204
15,650
3 7 ,5 5 4

41.5
40.4
42.1

4 2 .6
50.3
4 1 .3
40 .2
4 l .8

4 2 .1
4 9 .4
4 o .8
3 9 .5
4 1 .4

4 2 .1
4 8 .7
4 1 .0
4 0 .5
4 1 .2

4 2 .0
4 9 .2
4 1 .0
40 .6
41 .1

4 1 .9
48 .7
4 1 .0
4 0 .7
4 1 .1

4 1 .7
4 9 .3
4 0 .7
4 0 .5
40 .9

4 1 .3
4 8 .4
4 0 .4

4 1 .5
4 7 .7
4 0 .7
4 0 .6
4 0 .7

41 .2
4 6 .7
4 0 .5
4 0 .4
40 .6

40 .6
4 5 .6
4 0 .1
39.9
40 .2

4 0 .3
4 5 .2
3 9 .7
39 .5
3 9 .8

122.9

123.6

121.7
19.8
101.9

126.0
18.9
107.1

127.0
18.0
108.9

128.0
16.8
111.2

16.3

129.1
16.7

129.4

21 .5

119.4
2 1 .4

131.5

22.3

123.7
1 3 .7

34 .5

72.6

35 .0
73 .9

3 6 .7
7 4 .5

107.4
3 3 .6
7 3 .8

1 1 2 .4
3 5 .4
77 .0

115.5
35-9
7 9 .6

14.8
11 4.7
35.2
7 9 .4

32 0.4

336.2
!? .5
31 6 .7

330.8

3 6 0 .4
2 1 .4
339.0

368.2
20.9

37 5.1

347.3
124.0
223.3

36 5 .5
2 1 .7
34 3.8

122.3

(!/)
(V )

1947

Employment (th ou sa n d s):

1.
2.

T ota l p r iv a t e .......................................... 55,070
A g r ic u lt u r e ........................ •............... 8,490
N on a g ricu ltu ra l in d u s t r ie s ......... 46,580
M anufacturing................................. 15,481
Nonmanufacturing ........................ 31,099

3.
4.
5.

6.
7.
8.
3.
10.

Average w eekly h ou rs:
T ota l p r i v a t e . . .....................................
A g r ic u lt u r e ..........................................
N on ag riou ltu ra l in d u s t r ie s .........
M anufacturing................................
Nonmanufacturing ........................

13.
lU.
15.

Annual man-hours ( b i l l i o n s ) :
T ota l p r iv a t e ............................ ............
A g r ic u lt u r e ............................................
N on ag riou ltu ra l In d u s tr ie s ......... ..
M anufacturing...................................
Nonmanufacturing ........................

16.
17.
18.
19.
20.

Gross n a tio n a l product ( b i l l i o n s o f
195U d o l l a r s ) :
T ota l p r iv a te .........................................
A g r ic u lt u r e ....................................... ..
N on a g ricu ltu ra l Indus t rle s .........
M anufacturing.................................
N on m anu faoturin g............. ..

11 .
12.

23.
24.

Real product per man-hour:
T o ta l p r iv a t e .........................................
A g r ic u lt u r e .........................................
N on a g riou ltu ra l in d u s t r ie s . . . . .
M anufacturing........................ ••••

25.

N on m anu factu ring........................

21.
22.

42.9

50.6

8,318

100.6

102.1

98.1

32.6

3 2 .4
6 9 .7

29.5

31 .9
69 .9

268.7

29 3.3
19.3
27 4.0
9 5 .0
179.0

311.1

2.25
.86

2.41
.9 7

2 .5 5
2.79
2 .4 5

2.69

2 .4 7
.96
2 .7 4

2 .9 7

3.02
2.60

68.1

259.6

16.9

242.7

86.3
156.4

2.11
.76

270.3
19.3

251.0
88.1
162.9

68.6

18.3
25 0.4

82.1
168.3

2.41

2.19
.90
2.4 6

2.65
2.30

2.72
2 .3 4

.47
1.32

.4 6

.4 4

.42

1.11

1 .1 7
.39
.36
.4 1

1.03
.37
.34

2.56

18.1

293.0
104.1

188.9

18.8
301.6
107.3
194.3

118.1
198.6

2.52
1 .0 4
2 .7 7
3 .0 7

2.63
1.16
2.85
3.22

39 .9
4 0 .7

12 3.7

2 0 .3
31 0.5

107.0
20 3.5

2.67
1 .2 4

2.89

2.63

2 .6 7

3.19
2.7 6

.40

.3 8

.96

.86

.3 7

.36
.3 3
.38

.3 5
.3 1
.3 8

6,718

120.8
218.2

5 5 ,o io

17,090 16,967

16.0

20.6
354.5
232.2

2.79
1.28
3.02

2.80

2.90

1.3 1

3 .4 1

3 .4 5

1.40
3.09
3 .4 7

.3 6
.7 8
.33
.29
.35

.3 6
.7 6
.3 3
•29
.3 6

.3 5
.72
.32
.29
.3 4

2.83

3.01

2.80

2.92

110.0
3 2 .1
7 7 .8

2.95
1.58
3.13
C l /)
(i/>

Hours paid per d o ll a r o f r e a l
p rod u ct:

26.
A g r i c u lt u r e ........................................
Nonagricu lt u r a l In dustrie s •••••
M anufacturing. •............................
N onm anufacturing............. ..

27.
28.
29.
30.

1/



Not a v a ila b le

.41
.38
.44

«4l
.3 7
.4 3

.39

.41
l.o 4
.3 7
.3 3
.38

.81

.3 5
.3 1
.3 6

.34
.63
.32
(V )
(1/)

A -2 0

N o te s t o t a b l e A - l
L in e 1 .

L in e 2 p l u s l i n e 3 .

L in e 2 .

The 1 9 5 3 -5 8 d a t a fr o m t h e C en su s B u re a u , C u r r e n t P o p u l a t i o n R e p o r t s ,
Labor F o r c e .
Due t o a ch a n g e i n t h e e s t i m a t i n g p r o c e d u r e , t h e 1 9 4 7 52 d a t a fr o m t h e s o u r c e m e n tio n e d a b o v e h a v e b e e n a d j u s t e d f o r comr*
p a r a b i l i t y w it h t h e m ore r e c e n t s e r i e s .

L in e 3 .

Sum o f l i n e 4 and l i n e

L in e 4 .

D e r iv e d b y s u p p le m e n tin g t h e e s t im a t e s o f e m p lo y e e s i n m a n u fa c tu r in g
fr o m t h e BLS Em ploym ent and E a rn in g s r e p o r t w it h e s t i m a t e s o f a c t i v e
p r o p r i e t o r s i n u n i n c o r p o r a t e d m a n u fa c tu r in g b u s i n e s s e s fr o m t h e U .S .
D ep a rtm en t o f Com m erce, O f f i c e o f B u s in e s s E c o n o m ics , U .S . In com e and
O u tp u t, A S u p p le m e n t t o t h e S u r v e y o f C u r r e n t B u s i n e s s , 1 9 5 8 .

L in e 5 .

D e r iv e d b y s u p p le m e n tin g t h e BIS e s t i m a t e s o f e m p lo y e e s i n nonmanu­
f a c t u r i n g i n d u s t r i e s , e x c l u d i n g g o v e rn m e n t, w it h e s t i m a t e s o f u n p a id
f a m i l y w o r k e rs fr o m t h e C en su s B u r e a u 's C u r r e n t P o p u l a t i o n R e p o r t s ,
L a b o r F o r c e , and e s t i m a t e s o f d o m e s t i c s , a c t i v e p r o p r i e t o r s o f u n in ­
c o r p o r a t e d n o n m a n u fa c tu r in g b u s i n e s s e s , and e m p lo y e e s o f g ov ern m en t
" e n t e r p r i s e s " fr o m t h e U .S . D ep artm en t o f Com m erce, O f f i c e o f B u s i­
n e s s E c o n o m ic s , U .S . In com e and O u tp u t, A S u p p lem en t t o t h e S u r v e y
o f C u rren t B u s in e s s , 1 9 5 8 .
The 1 958 f i g u r e i s a BLS e s t i m a t e .

L in e 6 .

D e r iv e d a s a w e ig h t e d a v e r a g e o f a v e r a g e w e e k ly h o u r s i n a g r i c u l t u r e
and n o n a g r i c u l t u r a l i n d u s t r i e s .

L in e 7 .

From t h e U. S . D ep a rtm en t o f Commerce, B ureau o f t h e C e n s u s , C u r r e n t
P o p u la tio n R e p o r ts , L abor F o r c e .

L in e 8 .

D e r iv e d a s a w e ig h t e d a v e r a g e o f m a n u fa c tu r in g and n o n m a n u fa c tu r in g
a v e r a g e w e e k ly h o u r s .

L in e 9 .

O b t a in e d a s a w e ig h t e d a v e r a g e o f w e e k ly h o u r s o f e m p lo y e e s and o f
a c t i v e p r o p r i e t o r s i n m a n u fa c t u r in g .
S o u r c e o f a v e r a g e w e e k ly h o u r
in fo r m a t io n :
B ureau o f L a b or S t a t i s t i c s , s u p p le m e n te d b y B ureau o f
t h e C en su s u n p u b lis h e d l a b o r f o r c e d a t a .

L in e 1 0 .

O b t a in e d a s a w e ig h t e d a v e r a g e o f w e e k ly h o u r s o f n o n m a n u fa c tu r in g
e m p lo y e e s ( i n c l u d i n g d o m e s t ic s and e m p lo y e e s o f g ov ern m en t " e n t e r ­
p r i s e s " ) , p r o p r i e t o r s and u n p a id f a m i l y w o r k e r s .
S ou rce o f average
w e e k ly h o u r s i n f o r m a t i o n :
Bureau o f L a b o r S t a t i s t i c s su p p le m e n te d
b y B ureau o f t h e C en su s u n p u b lis h e d l a b o r f o r c e d a t a .




5.

A -2 1

N o te s t o t a b l e A - l — C o n tin u e d
L in e 1 1 .

Sum o f l i n e 1 2 and l i n e 1 3 .

L in e 1 2 .

L in e 2 t im e s l i n e 7 t im e s 52 w e e k s .

L in e 1 3 .

L in e 3 t im e s l i n e 8 t im e s 52 w e e k s .

L in e 14..

L in e 4 t im e s l i n e 9 t im e s 52 w e e k s .

L in e 1 5 .

L in e 5 t im e s l i n e 10 t im e s 52 w e e k s .

L in e 1 6 .

U .S . D ep a rtm en t o f Com m erce, U .S . In com e and O u tp u t, A S u p p lem en t t o
t h e S u rv ey o f C u rren t B u s in e s s , 1 9 5 8 .
1 9 5 8 f i g u r e e s t im a t e d b y t h e
O f f i c e o f B u s in e s s E c o n o m ic s .

L in e 1 7 .

U .S . D ep a rtm en t o f Com m erce, U .S . In com e and O u tp u t, A S u p p lem en t t o
t h e S u r v e y o f C u r r e n t B u s in e s s , 1 9 5 8 .
The 1 9 5 8 f i g u r e fr o m t h e S u r v e y
o f C u r r e n t B u s in e s s , F e b r u a r y 1959

L in e I S .

L in e 1 6 m inus l i n e 1 7 .

L in e 1 9 .

1 9 4 7 and 1 9 4 9 -5 6 BIS r e v i s i o n s and e x t e n s i o n s o f e s t i m a t e s p u b l i s h e d
i n B ig R e p o r t 1 0 0 .
1 9 4 8 and 1 9 5 7 e x t e n s i o n s e s t im a t e d b y BLS fr o m
d e f l a t e d U .S . D ep a rtm en t o f Com m erce, O f f i c e o f B u s in e s s E co n o m ics
v a lu e d a t a .

L in e 2 0 .

L in e 1 8 m inus l i n e 1 9 .

L in e 2 1 .

L in e 1 6 d i v i d e d b y l i n e 1 1 .

L in e 2 2 .

L in e 1 7 d i v i d e d b y l i n e 1 2 .

L in e 2 3 .

L in e 1 8 d i v i d e d b y l i n e 1 3 .

L in e 2 4 .

L in e 1 9 d i v i d e d b y l i n e 1 4 .

L in e 2 5 .

L in e 20 d i v i d e d b y l i n e 1 5 .

L in e 2 6 .

L in e 11 d i v i d e d b y l i n e 1 6 .

L in e 2 7 .

L in e 1 2 d i v i d e d b y l i n e 1 7 .

L in e 2 8 .

L in e 1 3 d i v i d e d b y l i n e 1 8 .

L in e 2 9 .

L in e 1 4 d i v i d e d

L in e 3 0 .

L in e 1 5 d i v i d e d b y l i n e




by l i n e 1 9 .
20.

Table A-2*

Labor f o r c e , employment, man-hours, r e a l product per man-hour and hours worked per d o l l a r o f r e a l p rod u ct, 19**7*58
(Man-hour estim ates based p rim a rily on Bureau o f the Census la b o r fo r c e da ta)

1.
2.
3.
4.
5.
6.
7.
8.
9.

1949

63,165
1,456
61,709
2,325
59,364
5,129
54,255
8,227
46,027

64,022

42 .3
48.9
41.0

41.9
48 .6
4 0 .7

4 1 .4
48 .2
4 0 .2

4 l.o
4 7 .3
40.0

4 1 .2
4 7 .9
4 0 .2

4 1 .1
4 7 .3
4 0 .1

4 0 .9
48 .0
4 0 .0

2,199
2,545
2,133

2,176
2,525
2,114

2 ,1 5 4
2,505

2,142
2,489

2,090

2,134
2,4 57

2,080

2,089

2,1 35
2,463

116.7

118.1
20.8

115.1

21.6
95.1

97.3

9 4 .2

116.5
19.2
9 7 .3

Gross n a tio n a l produet ( b i l l i o n s
o f Itfk d o l l a r s ) :
;
T ota l p r iv a te ........................................ 259.6
A g r ic u lt u r e ........................................
16.9
N on a g rlcu ltu ra l I n d u s t r i e s .. . . 242.7

270.3
19.3
251.0

268.7
18 .3
25 0 .4

T ota l la b o r fo r c e (th o u s a n d s )......... 61,992
Armed F o r c e s .......................................... 1,590
C iv ilia n la b o r f o r o e ........................ 60,402
Unemployed................. ....................... 2,356
E m p lo y e d ........................................... 58,046
Government c iv i lia n -g e n e r a l
4,963
T ota l p r iv a t e ............................... 53,083
A g r ic u lt u r e ............................... 8,490
N on a g rlcu ltu ra l In d u strie s 44,594

10.
11.
12.

Average weekly h ou rs:
T ota l p r iv a t e ........................................
A g r ic u lt u r e .......................................
N o n a g rlcu ltu ra l I n d u s t r ie s .. . .

13.
14.
15*

Annual hours per employee:
T ota l p r iv a t e ........................................
A g r ic u ltu r e ......................................
N on a g rlcu ltu ra l I n d u s t r ie s .. . .

16.
17.
18.

19.

20.
21.
22.
23.
24.

25.
26.
27.




1947

1948

Item

Man-hours ( b i l l i o n s ) :
T o ta l p r iv a t e ........................................
A g ricu ltu r e ..................................... ..
N on a g rlcu ltu ra l ln du st r le s . . . .

R eal product per man-hour:
T ota l p r iv a t e ........................................
A g r ic u lt u r e ...................... .................

2.22

N on a g rlcu ltu ra l I n d u s t r ie s .. . .

2.55

Hours worked p er d o l l a r o f r e a l
p r o d u ct:
T o ta l p r iv a te ........................................
A g r ic u lt u r e ........................................
N on a g rlcu ltu ra l In d u strie s ••••

•78

2.29
.93
2.58

.45

.4 4

1.28

1.08

.39

.39

1,616

1950

1951

65,083 66,316
1,650
63,433
3 ,3 5 1

3 ,0 9 8

1952

1953

66,894
3 ,5 9 4

67,362

1954

67,818 68,896

3,682

1956

1957

1958

70 ,387
Jt, 857
0 ,5 3 0

70 ,744
2,7 97
67,946

6,222

7 1 ,284
2,6 37
66,647
4,6 81
63,966
7,1 75
56,791
5,844

51,857

50,947

4 0 .0
4 5 .4
3 9 .3

3 9 .5
44 .2
38.9

39 .0
4 3 .7
3 8 .4

2,099
2,412

2,052

2,038

2, 08l
2,362

2,2 9 7

2,026
2,270

2,057

2,046

2,022

1,998

118.8

114.1

119.2

15.9

118.6
16.2

120.7

1 6 .4
102.5

1 5 .5

14.3
104.9

115.0
13.3

3 ,5 4 7

3,3 50
64,468
3,5 76

63,218 63,300 63,815
1,870
1,932
2,099
58,724 60,082 6l , l l 8
61,369 61,945 60,890
6,092 6, l 8 l
6,0 42
5,8 4 7
5,316
5,4 71
53,408 54,611 55,271 55,327 55,853 54,709
8,318 . W l 1 . 7 ,3 §2 , 7,126 . * ’ 555
45,090 46,780 47,889 48,201 49,298 4 $
62,406

1955

3,048
65,847
2,9 0 4
62,944
6,4 20
56,524

2,822

49,805

64,708
6,7 12
57,996
6,572
51,424

4 0 .1
4 7 .1
3 9 .2

4 0 .4
4 6 .4
39 .6

2,128

2,086
2,4 47

2,087

2 ,4 9 4
2,079

11 8 .4
1 8 .4

118.1
17 .6

100.0

100.6

293.3
19.3
274.0

311.1
18.1
293.0

3 2 0 .4

18.8
301.6

336.2
1 9 .5
31 6.7

2.3 4

2.52

.88
2.66

2.63

2.71

2.83

1.00

.9 9

1 .0 7

2.82

2 .9 3

3.00

1.19
3.0 9

.3 7
.9 3
.3 3

.3 5
.8 4
.3 2

20.8

.4 3
1 .1 4
.3 8

.40

.3 8

1.00

1.02

.36

.3 4

98.2

6,718

2,936
65,011
6,932
58,079

10 2.4

105.2

36 0 .4
2 1 .4
339.0

368.2
20.9

375.1

347.3

35 4.5

*•9®
1.28

3*4

3 .1 5
1 .4 4

3 .1 6

3 .3 1

3*5
1.3 5
3.3 0

3 .3 8

.3 5

.3 3
.7 6
.30

.3 3
.7 4
.3 0

.32
.69
.3 0

330.8

20.3
31 0.5

.78

.3 2

1.32

20.6

101.8

36 5.5
2 1 .7
343.8

3.18
1 .6 4
3 .3 8

.3 1

.61
.3 0

A -2 3

N o te s t o t a b l e A -2
L in e 1 .

S o u r c e i s C u r r e n t P o p u l a t i o n R e p o r t s , L a b o r F o r c e , B ureau o f t h e
C e n su s , U. S . D ep a rtm en t o f Com m erce.
Due t o a ch a n g e i n t h e e s t i ­
m a tin g p r o c e d u r e , t h e 1 9 4 7 -5 2 l a b o r f o r c e d a t a h a v e b e e n a d j u s t e d
f o r c o m p a r a b i l i t y w it h t h e m ore r e c e n t s e r i e s .
The 1 9 5 3 -5 8 d a t a
a r e fr o m t h e L a b o r F o r c e R e p o r t s a s p u b l i s h e d .

L in e 2 .

From t h e E co n o m ic R e p o r t o f t h e P r e s i d e n t , J a n u a ry 1 9 5 8 , t a b l e F -1 7
(p . 1 3 5 ).

L in e 3 .

Same a s l i n e 1 .

L in e 4 .

From t h e L a b o r F o r c e R e p o r t s .

L in e 5 .

Same a s l i n e 1 .

L in e 6 .

Com puted a s t h e sum o f g e n e r a l g o v e rn m e n t e m p lo y e e s , F e d e r a l , S t a t e
and l o c a l o t h e r th a n t h e m i l i t a r y , e x c l u d i n g e m p lo y e e s i n g ov ern m e n t
e n t e r p r i s e s fr o m t h e U .S . D ep artm en t o f Com m erce, O f f i c e o f B u s i­
n e s s E c o n o m ic s , U .S . In com e and O u tp u t, A S u p p lem en t t o t h e S u r v e y
o f C u rren t B u s in e s s , 1 9 5 8 .
The 1 9 5 8 f i g u r e i s a BIS e s t i m a t e b a s e d
o n OBE d a t a .

L in e 7 .

L in e 5 m inus l i n e

L in e 8 .

Same a s l i n e 1 .

L in e 9 .

L in e 7 m inus l i n e 8 .

L in e 1 0 .

D e r iv e d a s t h e w e ig h t e d a v e r a g e o f h o u r s i n a g r i c u l t u r a l and n o n a g r ic u ltu r a l in d u s tr ie s .

L in e 1 1 .

B ased on l a b o r f o r c e d a t a , a d j u s t e d t o r e f l e c t
f o r t h o s e e m p lo y e d , b u t n o t a t w o rk .

L in e 1 2 .

B ased on l a b o r f o r c e d a t a , a d j u s t e d a s f o l l o w s :
( l ) to r e f l e c t
" z e r o " h o u r s o f w ork f o r p e r s o n s w it h a j o b b u t n o t a t w o rk , ( 2 )
t o m in im iz e t h e e f f e c t s o f h o l i d a y s o n a v e r a g e h o u r s , and (3 ) t o
e x c lu d e h o u r s o f g e n e r a l g ov ern m en t e m p lo y e e s .

L in e 1 3 .

L in e 1 0 t im e s 52 w e e k s .

L in e 1 4 .

L in e 11 t im e s 52 w e e k s .

L in e 1 5 .

L in e 1 2 t im e s 52 w e e k s .




6.

z e r o h o u rs o f w ork

A -2 4

N o te s t o t a b l e A -2 — C o n tin u e d
L in e 1 6 .

L in e 7 t im e s l i n e 1 3 .

L in e 1 7 .

L in e 8 t im e s l i n e 1 A .

L in e 1 8 .

L in e 9 t im e s l i n e 1 5 .

L in e 1 9 .

From t h e U .S . D ep a rtm e n t o f Com m erce, U .S . Incom e and O u tp u t, A
S u p p lem en t t o t h e S u r v e y o f C u r r e n t B u s i n e s s , 1 9 5 8 .
1958 e s tim a te s
b y t h e O f f i c e o f B u s in e s s E c o n o m ic s .

L in e 2 0 .

From t h e U .S . D ep a rtm e n t o f Com m erce, U .S . Incom e and O u tp u t, A
S u p p le m e n t t o t h e S u r v e y o f C u r r e n t B u s i n e s s , 1 9 5 8 .
The 1 9 5 8 f i g u r e
fr o m t h e S u r v e y o f C u r r e n t B u s in e s s , F e b r u a r y 1 9 5 9 .

L in e 2 1 .

L in e 1 9 m inus l i n e 2 0 .

L in e 2 2 .

L in e 19 d i v i d e d b y l i n e 1 6 .

L in e 2 3 .

L in e 20 d i v i d e d b y l i n e 1 7 .

L in e 2A.

L in e 21 d i v i d e d b y l i n e 1 8 .

L in e 2 5 .

L in e 1 6 d i v i d e d b y l i n e 1 9 .

L in e 2 6 .

L in e 1 7 d i v i d e d b y l i n e

20.

L in e 2 7 .

L in e 1 8 d i v i d e d b y l i n e

21.




A-25
Table A-3• National income and product account, 1957
_____________ (B illio n s of current dollars)_____________
Charges against gross national product Expenditures of gross national product
Compensation of employees ........... 2 $ b .6
Income of unincorporated enter­
p rises and inventory valuation
adjustment ....................................... 4 3 . 0
Rental income of persons
Corporate p ro fits and inventory
valuation adjustment .................. h i . 9
Corporate p ro fits before tax . h 3 . h
Corporate p ro fits tax ...........
Corporate p ro fits after tax. 2 1 . 8
Dividends ......................
1 2 .b
Undistributed p ro fits . . . . 9 ^
Inventory valuation adjustment - 1 . 5
Net in terest ....................................... 12.6
National income ................................. 36b .0
Indirect business tax and non­
tax lia b ility ................................. 37*6
Business transfer payments ......... 1.6
S ta tistic a l discrepancy ............... 0.7
Less: Subsidies minus current
surplus of government
enterprises ................................... 1-3
Charges against net national
product ................. .7". .7. 7 ...
Capital consumption allowances
37-7
Gross national product
h h o .3
1 1 . 8

Personal consumption
expenditures ...........
Gross private domestic
investment ...................
Net foreign investment
Government purchases of goods
and services ..............................

2 8 h -.U

6 5 .3

3-5
8 7 .1

2 1 . 6

H 0 2 .6

Gross national product ............... hhO.3

Source: U.S. Department of Commerce, Survey of Current Business, July 1958.




T a b le A -4 .

G ross

n a tio n a l p ro d u ct
d o lla r s ,

and

a n d m a jo r

com p on en ts

I m p lic it p r ic e

(B illio n s

o f

in

d e fla to r s ,

cu rren t

and

d o lla r s )
I m p lic it

Itsa t

1957

1954

con sta n t

195A and 1957

p r ic e

1957

Change in
p h y s ic a l

d e fla to r

v o lu m e

1957
(1 9 5 4

G ross

n a tio n a l p r o d u c t ....

P erson al

t)

(1 9 5 7

#)

(1 9 5 4

t)

(1 9 5 4 * 1 0 0 )

(1 9 5 4 * 1 0 0 )

4 4 0 .3

1 0 8 .2

1 3 2 .1

2 7 0 .3

3 6 3 .1

1 0 5 .2

1 1 3 .6
1 1 7 .6

_4Q 2*1_

c o n s u m p tio n
2 3 8 .0

e x p e n d i t u r e s ...........................

3 8 .1

1 0 4 .7

1 1 9 .3

3 9 .9
1 3 8 .0

1 3 2 .7

1 0 4 .0

1 1 1 .2

8 6 .3

1 0 6 .5

9 9 .4

1 0 7 .1

1 1 5 .2

4 8 .9

6 5 .3

5 7 .8

2 9 .7
1 5 .4

3 6 .5
1 7 .0

1 5 .5

1 1 2 .9
1 1 0 .1

1 0 0 .6

1 4 .3

1 9 .5

1 6 .9

1 1 5 .5

1 1 8 .2

2 0 .8

2 7 .9

2 4 .1

1 1 5 .8

1 1 5 .9

-1 .6

1 .0

1 .4

—

—

—0 . 4

3 .5

2 .6

—

—

s e r v ic e s ....

7 6 .6

8 7 .1

7 6 .2

F e d e r a l ..........................................

4 8 .9

5 0 .8

4 3 .9

1 1 5 .7

8 9 .8

S ta te

2 7 .7

3 6 .3

3 2 .3

1 1 2 .4

1 1 6 .6

...........................

3 2 .3

3 8 .6

3 3 .2

1 1 6 .4

1 0 2 .8

T o ta l p r iv a te g ro s s
p r o d u c t ....................................

3 3 0 .8

4 0 1 .7

3 7 3 .8

1 0 7 .5

1 1 3 .0

D u r a b le

g o o d s .........................

3 2 .4

g o o d s ................

S e r v i c e s .......................................

N o n d u r a b le

G ross

p r iv a te

d o m e s tic

i n v e s t m e n t .................................
N ew c o n s t r u c t i o n ................
R e s id e n tia l

n o n fa rm

O t h e r ................................. .. .....

1 1 8 .2

3 2 .3

1 0 8 .8

P r o d u c e r d u r a b le
e q u i p m e n t ..............................
C hange in

b u s in e s s

i n v e n t o r i e s .........................
N et fo r e ig n

in v e s t m e n t ..

G overnm ent p u rc h a s e s
goods

and

o f

a n d l o c a l ...................

1 1 4 .3

9 9 .5

A ddendum s
G ross

govern m en t

produ ct

1 /

W ages

S ou rces
N otes

and
U .S .

B ecau se




s a la r ie s

o f

gen eral

D ep a rtm en t o f
o f

r o u n d in g ,

govern m en t

C om m erce,
su m s o f

S u rvey

e m p lo y e e s .
o f

in d iv id u a l

C u rre n t B u s in e s s ,
ite m s

m ay n o t

equal

J u ly

1958.

to ta ls .

A-27
Appendix B. Comparison of Census and Bureau of Labor S ta tistic s
Man-Hour Measures in the Total Private Economy
Because of the difference in survey methods and concept, the BLS type
measure shows both a higher employment estim ate and a higher to ta l man-hour
and average weekly hours estimate than the Census based measures. (See tables
A -l and A-2 .)
Employment
The counting of jobs rather than persons is perhaps the main reason for
the higher employment estim ate. As in the cases of m ultiple job holders and
in job turnover, 1 person may, during a survey period, be on more than 1 pay­
r o ll. According to a Census Survey on work experience of the population,
about 3 .5 m illion persons in 1957 had 2 or more jobs simultaneously. 1 /
A lso, the BLS data include children under 14 working on nonfarm jobs who are
on p ayrolls, whereas they are not included in the Census type count. On the
other hand, the Census data include as employed a number of persons who have
jobs but are not at work an entire week and axe not on paid statu s—groups not
included in the BLS employment count.
Weekly and Total Hours
The inclusion of hours paid but not worked in the BLS based measure is
the principal reason for the higher man-hour estim ate in th is se r ies.
D ifferences in survey methods in the two se r ie s, counting of persons versus
counting of jobs, should have no e ffe ct on the to ta l man-hours data. In the
case of eith er m ultiple jobs or job turnover, the BLS series would count
payroll hours on each job; the Census would count to ta l hours worked.
Estimates of average weekly hours of a ll employed persons, in the Census
based measure, are lower than those in the BLS, partly because of the in clu ­
sion of a ll persons with a job but not at work (the "zero" hours worked group)
in the computation. I f , however, average hours of persons "at work" were to
be compared with the BLS data, th is estim ate would be considerably higher,
since Census would count to ta l hours worked by persons with two or more jobs
and BLS the hours on each job.

l / U.S. Department of Commerce, Bureau of the Census, Current Population
Reports, Labor Force, Multiple Job Holding, July 1957* Series P-50,
No. 80, February 1958*




A-28
Problems of Using Weekly Sample
Another probable cause for some of the discrepancy between the BLS and
Census labor force based measures is due to the exaggerated e ffe c t of
holidays, bad weather, or unusual events occurring during the survey week.
For both the BLS and the Census based measures, a sp ecified payroll period or
survey week 2 / has been taken to represent a month, so that lower weekly
hours due to holidays or other reasons are reflected as lower average weekly
hours for the month. The BLS based measure, however, would r e fle c t only
unpaid hours o ff; the Census, a ll hours o ff.
Because the event of a leg a l or religio u s holiday during a survey week
resu lts in a considerable decrease in the average workweek as measured by
Census, an adjustment has been made in computing annual hours worked to mini­
mize the e ffe c t of holidays. I t should be noted that few, i f any, le g a l
holidays occur in the survey week used by Census and the BLS programs. I f
the incidence of time o ff the job because of leg a l or religio u s holidays has
increased during the postwar period, the exclusion of the holiday weeks, plus
the fact that very few are picked up in the survey week, would lead to an
upward b ias in the man-hours worked index and therefore a downward b ias in
the output per man-hour estim ates based on hours worked.
The use of a weekly sample to represent the month in both the BIS and
Census labor force based measures may also lead to some error in the e s t i­
mate of to ta l man-hours due to the lo st time resu ltin g from str ik es. I f the
strik es occur during the survey week, th is may exaggerate the e ffe c t of lo st
time and lead to an underestimate of man-hours for the month as a whole. On
the other hand, i f the strik es occur in weeks of the month other than the
survey week, th is may lead to an overestimate of man-hours for the month.
In th is case, in contrast to the adjustment mentioned above for le g a l
holidays in the Census labor force data, no adjustment is made because
adequate data are not availab le. It is b elieved, however, that the incidence
of strik es follow s no particular pattern and is prestoned to be randomly
distributed throughout the month.
The random d istrib u tion of strik es im plies that from the viewpoint of
the problem of using the weekly sample as representative of the month, the
underestimates and overestim ates cancel each other and the estimated to ta l
is approximately correct. Legal holidays, on the other hand, f a ll on
certain days each year and are therefore not randomly d istrib u ted .
2 / BIS—Payroll periods ending nearest the 15th of the month. Census
labor force—Beginning July 1955, labor force data sore for the calendar week
ending nearest the 15 th of the month; previously, the week containing the 8th.




A-29
Agriculture
The man-hour measures for the agricultural sector of the economy
developed for th is report are based on the Census labor force data. Two
measures were prepared for the agricultural sector; one based on hours
"worked," the other on hours "paid," including hours worked of unpaid fam ily
workers. Both measures were based on the Census labor force data. The only
difference between the two was a minor adjustment in the la tte r measure to
include the hours of those with a job but not at work on the assumption that
they were paid.
As previously noted in the section on trends, the measures for the
agricultural sector used in th is report r e fle c t "actual" hours and cover men,
women, said children 14 and over. This estim ate of "man-hours" d iffer s from
the Department of Agriculture estim ate in which a ll hours are estimated in
terms of equivalent adult male hours required for agricultural production.
The Census based estim ate was used in th is report in order to develop
measures for the sectors and to ta l private economy that could be consistent
with the "actual" man-hours used for nonagricultural sectors.
Nonagriculture
The estim ate for nonagricultural man-hours based on Census data was
obtained by m ultiplying the employment by average hours for that sector and
making adjustment for holidays and the hours of general government employees.
The man-hour measure based primarily on Bureau of Labor S ta tistic s data
was obtained by summing the estim ates for each of the nonagricultural sectors,
including the additional categories of self-em ployed, unpaid fam ily workers,
and dom estics.
Manufacturing
The man-hours paid estim ate was based prim arily on the BLS data covering
manufacturing employment and average weekly hours of production workers. The
average weekly hours of nonproduction workers was assumed to be to hours a
week during the postwar period. The estim ate of proprietors in manufacturing
industries was obtained from the National Income data. The estim ate of
average weekly hours of proprietors was obtained from unpublished Census labor
force data. I t was assumed that the number of unpaid fam ily workers in manu­
facturing was quite small and therefore no additional estim ate for th is
category was made.
Nonmanufacturing
The man-hours paid estim ate was based prim arily on BLS employment and
average weekly hours data for the component sectors and in d u stries. Separate
estim ates were prepared for each sector or industry and then summed to arrive




A -3 0

at a to ta l man-hours paid estim ate for a l l private nonfarm, nonmanufacturing
in d u stries. Supervisory employees were assumed to work the same hours as
those whom they supervised. The estim ates for proprietors and domestics
were based on the National Income data. Information on nonfarm unpaid fam ily
workers and average weekly hours of proprietors, service, banking, and
insurance employees was obtained from unpublished Census labor force data.




A-31

Appendix C. Comparability of Real Product and Man-Hour Estimates
Comparability of output and labor input parts of the ratio is one of
the major problems in productivity measurement, sin ce, with few exceptions,
the estim ates for the related output and man-hours are obtained from
d ifferen t sources of data. Comparability of coverage is more of a problem
at the industry le v e l, but th is diminishes as the a c tiv ity being measured is
expanded to cover major industry groups and sectors of the economy. The
problem is minimized when the productivity measure rela tes to the to ta l
private economy. There are s t i l l some problems of comparability remaining,
however, even for the to ta l private economy and major sectors shown in th is
report. The more important problems of consistency of coverage are discussed
in th is section , startin g with those relatin g to the to ta l private economy,
followed by a sim ilar analysis for each of the major sectors.
Total Private Economy
Measure Limited to Private Economy. At the to ta l private economy le v e l,
most of the problems of comparability found at lower le v e ls of aggregation
are avoided, even though the estim ates of real product and man-hours are ob­
tained from d ifferen t sources. As previously indicated, the major adjustment
at th is le v e l is the subtraction of the man-hours of general government em­
ployees from the to ta l man-hour measure based on the Census labor force data,
in order to ensure comparability with the estim ates of private gross national
product.
E ffect of Imputations to Gross National Product. A sign ifican t d is­
crepancy between man-hours and GNP would e x ist were i t not for the practice
of imputing values in GNP for certain types of transactions which are not
monetary in form but nevertheless represent a flow of goods or services with
a corresponding labor input. For example, a value is imputed for food produced
and consumed on farms. The man-hours data for agriculture cover to ta l product.
I f the imputation were not included, output per man-hour would be understated.
The same is true of other imputations, such as food and clothing furnished
m ilitary personnel and services performed by banks without e x p lic it charge.
The man-hours involved in these goods and services are included in to ta l
man-hours and the imputation is needed to account for the corresponding output.
Sometimes, however, an imputation has the opposite e ffe c t on the outputinput relation sh ip . One of these imputations is the rental value of owneroccupied homes. In the estim ate of GNP the value of owner-occupied hemes is
treated as though the homes were rented. For homes that are actually rented,
employment involved in managing and maintaining the property is reflected in
the employment of the real estate industry. However, i t is not p ossible to
calculate the employment involved in management and maintenance performed by
heme owners. The output per man-hour ratio is therefore overstated. I f the




a

-32

p ro p o rtio n of the value of owner-occupied homes to the value of rented homes
remained co n sta n t, t h is overstatement would he the same in each p e rio d and
th e re would be no e ffe c t on the movement of p riv a te r e a l product per man-hour.
A lthough th e re has been an increase in the p ro p o rtio n of owner-occupied homes,
our estim ate of the e ffe c t of t h is fa c to r on t o t a l p riv a te p r o d u c t iv it y i n d i ­
cates th a t the e x c lu sio n of imputed re n ts from the t o t a l p r iv a te r e a l product
i n o rder to ensure c o m p a ra b ility would not re s u lt i n m odifying the o v e r a ll
p r o d u c t iv it y measure to any s ig n if ic a n t e x te n t.
Income From Abroad. Another instance of nonraatching man-hours and GHP
r e s u lt s from the fa c t th a t the value of GHP in clu d e s the value of "output not
produced in the U n ite d State s b u t accru in g to U . S . r e s id e n t s ." F o r the p u r­
pose of c a lc u la tin g output pe r man-hour r a t io s , the d e fla te d value of t h i s
item should be subtracted so th a t the domestic employment is re la te d to
domestic GHP.
F o rtu n a te ly , t h is item is a r e l a t i v e l y sm all amount in the U n ite d States
economy and here again a rough estim ate f o r t h is fa c to r in d ic a te d th a t although
the le v e l of output per man-hour might be s l i g h t l y overstated due to t h is
la c k of c o m p a ra b ility , i t would have l i t t l e e ffe c t on the tre n d in output per
man-hour f o r the t o t a l p r iv a te economy.
P ro d u ctio n and Labor In p u t of C h ild re n Under l k . I t has been p re v io u s ly
in d ic a te d th a t the Census la b o r fo rce estim ates exclude c h ild re n under l k .
T h is e x c lu s io n does not h o ld f o r the employment data of the Bureau of Labor
S t a t i s t i c s and Census of Manufactures and Annual Surveys o f Manufactures which
in c lu d e a l l persons on the p a y r o l l , re ga rd le ss of age. I t is estim ated th a t
th e re are ap proxim ately a m i ll i o n c h ild re n under l k years of age w orking on
farm jobs a t c e rta in seasons of the ye a r and somewhat le s s than l /2 m i ll i o n
in n o n a g ric u ltu ra l in d u s t r ie s . There is r e l a t i v e l y l i t t l e in fo rm a tio n on
the tre n d in t h i s group o f workers in r e la t io n t o the growth in the la b o r
fo rce b u t , since the under l k group is found p r im a r ily i n the farm secto r
and the employment in t h is se cto r has been s te a d ily decreasing over the y e a rs ,
i t is q u ite probable th a t the omission of the under l k group from la b o r fo rce
estim ates tends t o o verstate the increase in man-hours d u rin g the postwar
ye ars and understate output pe r m an-hour.
The la c k o f c o m p a ra b ility in the pre vio u s th re e item s— imputed r e n t ,
income from abroad, and output o f c h ild re n under l k — has been due to the
in c lu s io n of these items in GHP w ith o u t corresponding la b o r in p u ts . The
opposite s it u a tio n e x is ts in the case o f the next group o f ite m s, where the
la b o r in p u t i s not matched b y corresponding value of o u tp u t.
Research and Development. The treatm ent of research and development
a c t i v i t i e s not connected w ith c u rre n t p ro d u ctio n presents a ra th e r complex
conceptual and s t a t i s t i c a l problem from the vie w p o in t of p r o d u c t iv it y
measurement. A t the present tim e , p riv a te research and development
a c t i v i t i e s are not in clu d e d as a separate item in GHP. I n the n a tio n a l
income system o f accounts, p r iv a te research and development e x p e n d itu re s,




A-33
which are w ritte n , o f f as c u rre n t c o s ts , are considered to he "in te rm e d ia te "
costs and t h e i r value added i s assumed to he in clu d e d in the value o f some
p a rt o f f i n a l goods and s e rv ic e s . I n th e o ry , the research and development
expenditures which are c a p ita liz e d should he in clu ded as p a rt of GNP ju s t as
expenditures f o r new p la n t and equipment are in c lu d e d . In p r a c t ic e , i t is
extrem ely d i f f i c u l t to o btain any data on such c a p ita liz e d research and
development e xp e n d itu re s, and such expenditures are th e re fo re not in clu ded in
GNP. The c u rre n t treatm ent of research and development expenditures presents
a problem because the la b o r in p u t associated w ith these a c t i v i t i e s i s in clu ded
in the c u rre n t man-hours o f the economy and se cto r where the a c t i v i t y takes
p la c e . However, the " o u tp u t," as d is tin g u is h e d from the accounting conventio ns,
may not be r e fle c te d u n t i l many years l a t e r , i f at a l l . The problem is in
p a rt analogous t o th a t presented by the measurement of output per man-hour f o r
those c a te g o rie s of p ro d u c ts , such as a i r c r a f t , s h ip b u ild in g , tu rb in e s and
g e n e ra to rs, w hich take many months and years to complete and the output in
any g ive n ye ar is u s u a lly defined i n terms of work "put in pla ce " ra th e r than
completed p ro d u cts.
T h is problem is of some concern due to the in c re a s in g resources be in g
devoted to research and development a c t i v i t i e s and the p o s s i b i l i t y th a t t h is
increase may account in p a rt f o r the in c re a s in g p ro p o rtio n of "nonproduction"
w orke rs, p a r t i c u l a r l y in m anufacturing. There i s no s a t is fa c to r y method of
"a d ju s tin g " the measure of output per man-hour t o take accotint of the increase
i n these a c t i v i t i e s , bu t t h i s f a c t o r should be kept i n mind i n e v a lu a tin g the
tre n d i n output per man-hour.
A g r ic u ltu r e Versus H o n a g ric u ltu re
The estim ate of a g r ic u lt u r a l man-hours used in t h is re p o rt i s based on
the Census la b o r fo rce d a ta . C o nsistent w ith the la b o r fo rce d e f in it io n s ,
persons employed at two or more jobs are re p o rte d in the job at which th e y
worked the g re a te st number o f h o u rs. The man-hours o f persons whose p r in c ip a l
occupation i s farm ing bu t who also have secondary jobs in n o n a g ric u ltu ra l
in d u s trie s a re , th e re fo re , a l l in clu d e d under fa rm in g . C o n ve rs e ly, the man­
hours in vo lve d in farm ing as a secondary a c t i v i t y of those whose p r in c ip a l
occupation i s i n n a n a g ric u ltu re are in clu d e d in the l a t t e r c a te g o ry . The
a v a ila b le evid ence, lim ite d t o Census la b o r fo rce stu d ie s f o r J u l y of 19 ^ 6 ,
+
1950, 19 5 6 , and 195T } in d ic a te s th a t the e r ro rs are o f f s e tt in g and th a t on
net b a la n c e , th e re i s no b ia s in the change in a g ric u lt u re m an-hours. I t
should be stressed th a t these stud ie s are not con clu sive evidence since th e y
cover o n ly the J u l y months of a few y e a rs , and J u l y may be a poor month f o r
the purpose of te s t in g the extent of e r r o r f o r the a g r ic u lt u r a l s e c to r.




Appendix D.

L im ita tio n s and Q u a lific a tio n s of Output Per Man-Hour Measures

I n e v a lu a tin g o r u sin g the output p e r man-hour measures g ive n in t h is
r e p o r t , the re are a number of general lim it a t io n s and q u a lif ic a t io n s which
should be kept in mind. Most of these have a lre a d y been mentioned throughout
t h i s r e p o r t. Fo r convenience, the general q u a lif ic a t io n s and lim it a t io n s
are summarized in t h is s e c tio n .
The f i r s t p o in t to be emphasized i s th a t the lim it a t io n s of a v a ila b le
data make i t d i f f i c u l t to c o n stru ct p re cise measures of output p e r man-hour.
The measures should, th e re fo re , be regarded as gen eral in d ic a to rs o f output
p e r man-hour tre n d s , ra th e r than p re c is io n in stru m e n ts. As such th e y are
u s e fu l in stud ying the economy and i t s grow th, in e v a lu a tin g the te c h n o lo g ic a l
progress of in d u s t ry , and in understanding the employment im p lic a tio n s of the
changing re la tio n s h ip s between output and manpower re quirem ents.
Some o f the more im portant data lim it a t io n s may be summarized as
f o llo w s :
1 . Output and man-hour data are_inadequate o r p ro vid e o n ly p a r t i a l
coverage f o r some in d u s trie s o r c a te g o rie s . I n o th e r are a s, p r ic e data
needed f o r d e f la t in g the va lu e o f output are inadequate due t o la c k o f
coverage o r a p p ro priate w eights c o n siste n t w ith th e requirem ents of the
d e fla tio n procedure. These data lim it a t io n s re q u ire im putations th a t
may le a d to e rro rs in the r e s u lt in g measures which cannot be checked
d i r e c t l y , because the v e ry data needed to make the c o rre c t adjustments
in the f i r s t instance are needed f o r te s tin g the extent of the e r r o r .
A p a r t i a l and in d ir e c t check on the tre n d of th e man-hour p a rt o f the
output per man-hour r a t i o can be in fe rre d from the fa c t th a t the two
man-hour measures developed f o r t h is re p o rt are in reasonably close
agreement, a f te r talcing account of the d iffe re n c e s in concept.
I n a d d itio n , more work and data are needed t o develop separate
estim ates of r e a l product f o r the nonmanufacturing s e c to rs , which are
in clu d e d in t h is re p o rt as a re s id u a l estim a te . Independent estim ates
would be u s e fu l in p ro v id in g a d d itio n a l in fo rm a tio n on tre n d s f o r
components of the t o t a l economy and would also pro vid e a p a r t i a l check
on the estim ate f o r the t o t a l p riv a te economy and the re s id u a l estim ate
f o r t o t a l nonm anufacturing.
2 . E x is t in g data and techniques do not p ro vid e f o r a f u l l account­
in g of the c o n tin u in g changes in th e q u a lit y of goods and se rvic e s
produced. To a lim ite d e x te n t, id e n t if ia b le changes in product s p e c if i­
c a tio n s are taken in to account i n the r e a l product and output per
man-hour indexes. I n many cases, however, s p e c ific a t io n and q u a lit y
changes are not re p o rte d . I n other in s ta n c e s , q u a lit y change is so
in ta n g ib le th a t i t cannot be measured w ith e x is te n t te ch n iq u e s. To the
exte nt t h a t , over the lo ng ru n , q u a lit y i s im p ro vin g , the indexes o f




A-35

output per man-hour are u n d e rsta te d . I t should be noted th a t t h i s
problem o f q u a lit y change c h a ra c te rize s a l l e x is te n t p ro d u ctio n
measures and many o th e r s t a t is t ic s as w e l l .
3 - Q uite o ften th e re are problems o f con sistency and c o m p a ra b ility
between th e methods used t o estim ate output and those used t o estim ate
la b o r in p u t. These tend to occur most o fte n at f i n e r le v e ls of in d u s try
d e t a i l ; but are m inim ized at h ig h e r le v e ls of a g g re ga tion .
4.
Fo r many a c t i v i t i e s , e . g . , s e rv ic e s , c o n s tru c tio n , fin a n c e ,
re se a rc h , households, and n o n p ro fit in s t it u t io n s th a t do not have
d i r e c t l y measured p ro d u c ts , in d ir e c t and rough techniques of e stim a tio n
have t o be used which y i e l d measures th a t are c o n c e p tu a lly obscure. I n
g e n e ra l, the methods used to estim ate output in these areas tend to
understate gains i n p ro d u c tio n and output per m an-hour.
In r e la t in g output p e r man-hour tre n d s t o other economic v a r ia b le s , care
should be taken t o in sure th a t comparable measures are used. Fo r example, in
making estim ates o f gross n a tio n a l product based on p ro je c tio n s o f the la b o r
f o r c e , the re le v a n t output per man-hour estim ates used to convert la b o r fo rce
p ro je c tio n s to gross n a tio n a l product estim ates would be those based on the
Census la b o r fo rce d a ta . On the other hand, i f the a n a ly s is in vo lve s a com­
p a riso n of the tre n d in output per man-hour and gross average h o u rly e a rn in g s ,
as measured b y the Bureau of Labor S t a t i s t i c s (e a rn in g s per hour p a id concept)
then the output per man-hour measure based p r im a r ily on BLS data should be
used in the comparison. I n such a comparison, i t should be noted th a t the BLS
gross average h o u rly earnings s e rie s do not measure t o t a l employment costs
p e r h o u r, since c o n trib u tio n s of employers to s o c ia l s e c u rity and p r iv a te
h e a lth , in sura nce, pension fu n d s, e t c . , are not in c lu d e d .
In g e n e ra l, in analyses r e la t in g economic growth t o te c h n o lo g ic a l change
as re fle c te d in changes in output pe r m an-hour, the more re le v a n t measure would
be th a t based on the approxim ation of man-hours worked (la b o r fo rce d a ta ). I n
comparisons in v o lv in g la b o r c o s t, the output per man-hour measure based on the
approxim ation o f hours p a id may be more re le v a n t. In the l a t t e r case, however,
th e re may be s p e c ific instances where estim ates of h o u rly earnings o r employment
costs per hour have been prepared (b y p r iv a te o r government sources) based on
the hours worked concept. In such in sta n c e s, i t may be more a p p ro priate to
use the output p e r man-hour measure based on the Census d a ta . Fo r a l l these
comparisons, however, i t must be borne i n mind th a t the d iffe re n c e between
th e two measures o f output per man-hour r e s u lt s , in p a r t , from s t a t i s t i c a l
as w e ll as conceptual d iffe re n c e s .
The choice of the w eight base ye ar may have an e ffe c t on the tre n d , and
t h i s should also be taken in t o account. I n g e n e ra l, the s e le c tio n of a w eight
base ye ar o r average o f years at the b e g in n in g of the p e rio d being measured
w i l l tend to show a h ig h e r ra te o f increase than one based on the l a t t e r p a rt
of the p e rio d .




Another c a u tio n to be observed in in t e r p r e t in g th e measures i s th a t the
estim ates f o r the t o t a l p r iv a t e economy and m ajor subgroups are not in d ic a tiv e
o f the tre n d f o r in d iv id u a l component s e c to rs , in d u s t r ie s , o r corpo rate en­
t i t i e s . The p re vio u s work o f th e Bureau of Labor S t a t i s t i c s in m anufacturing
and o th e r areas in d ic a te s q u ite c le a r ly th a t th e re i s , i n f a c t , s u b s ta n tia l
v a r ia t io n from in d u s try t o in d u s try and among groups o f in d u s t r ie s .
Y e a r -t o -y e a r changes in output p e r man-hour o r in the re la tio n s h ip o f
output p e r man-hour t o o ther economic v a ria b le s are not u n ifo rm , and are
th e re fo re no t in d ic a t iv e o f tre n d s in the b a s ic fo rc e s making f o r p r o d u c t iv it y
grow th. I t a lso fo llo w s from the la c k o f u n ifo r m ity i n y e a r -t o -y e a r changes
in output p e r man-hour th a t the choice o f the p a r t ic u la r tim e p e rio d covered
b y the measures may a ffe c t the r e s u lt in g estim ate o f average change.




A-37
Appendix E .

Te c h n ic a l Note on Long-Term Trends in Output p e r Man-Hour

As in d ic a te d e a r l ie r in t h is r e p o r t , th e re are va rio u s ways i n which
lo n g -te rm tre n d s in output p e r man-hour f o r the p r iv a te economy can he meas­
u re d . The re s u lt s obtained depend in p a rt upon the p a r t ic u la r form of s ta ­
t i s t i c a l d e s c rip tio n selecte d to summarize the movements. Among th e se , two
types of measures— lin e a r and c u r v i lin e a r — were examined, and a t the same
time two forms o f c u r v ilin e a r measures— a parabola and a hyperbola were
in c lu d e d .
The procedure used f o r d e riv in g the tre n d measure, whether lin e a r o r
c u r v i l in e a r , was to ap ply the le a s t squares technique to the lo g a rith m s of
the index numbers. T h is in v o lv e d s o lv in g f o r the p a r t ic u la r l in e o r curve
which would m inim ize the sum of the squares o f the d e v ia tio n s o f the a c tu a l
indexes from the proposed lin e o r c u rve .
The equations are o f the fo llo w in g form :
S t ra ig h t Lin e

Log Y s a + bX

Parabola

Log Y - a + bX + cX

Hyperbola

Log Y * s

2

Ta b le E**l presents the equations f o r the l i n e a r , p a ra b o lic , and h y p e rb o lic
tre n d measures d e rive d from the indexes based on b o th BLS and Census m an-hours.
In clu d e d a lso are the equations f o r the lin e a r and p a ra b o lic trend s in output
p e r man-hour a f t e r adjustments have been made f o r the e ffe c ts o f s h if t s and
f o r changes i n the degree o f c a p a c ity u t i l i z a t i o n . I n t h i s ta b le "Y" re p re ­
sents the d e rive d index o f output p e r man-hourj "X " re presents the number o f
years from 1933 (about the m idd le ) o f the lo n g -te rm p e rio d , 1909-58)5 and "Z"
re presents the em ploym ent-labor fo rc e percentages (c a p a c ity u t i l i z a t i o n ) .
Since the l i n e , pa rab ola and hyperbola axe in clu d e d as tre n d measures,
th e re i s a question as to w hich fu rn ish e d the b e st f i t to the d a ta . The sum
of th e squared d e via tio n s o f the lo g a rith m s o f the a c tu a l indexes from the
lo g a rith m s of the d e rive d measure is sm allest f o r the h yp e rb o la . The sura f o r
each o f the curves is sm aller than the sum f o r the lin e a r tre n d .
The u su a l te s ts o f the s ig n ific a n c e o f the d iffe re n c e s between the
equations f i t t e d to the same d a ta , t y p i c a l l y in v o lv e in one way o r another
comparison of the standard e r ro rs o f the estim ates d e rive d from the sums o f
the squares o f the d e v ia tio n s f o r the va rio u s e q uatio n s. These te s ts are
based on the assumption th a t the d e v ia tio n s observed are randomly d is t r ib u t e d
and s e r i a l l y independent.
2

l/

The equation i s d e rive d from the more common form




2

= 1

I n many tim e s e r ie s , these c o n d itio n s are not s a t is f ie d . The indexes
f o r the c u rre n t ye ar are in flu e n c e d t o a con sid era ble extent b y the l e v e l o f
the indexes f o r the p re vio u s y e a r. T h e re fo re , the consecutive indexes in a
tim e s e rie s are not independent b u t tend t o be c o r re la te d , a fa c t o r known as
s e r ia l c o r r e la t io n . Fo r example, in s p e c tio n o f the a c tu a l and d e rive d s e rie s
on output per man-hour (c h a rts E - 1 - E 4 ) show th a t f o r many o f the subperiods,
th e successive d e via tio n s between the a c tu a l and d e rive d indexes are o f the
same s ig n . T h is il l u s t r a t e s the existence o f s e r ia l c o r r e la t io n i n the output
p e r man-hour s e r ie s .
Where the d e v ia tio n s are no t randomly d is tr ib u te d o r independent, s t r i c t
te s ts o f s ig n ific a n c e can be a p p lie d o n ly when a s p e c ific model o f the p r o ­
b a b i l i t y scheme under w hich the d iffe re n c e s observed are generated i s assumed
to be known. There i s no g e n e ra lly accepted model which can be a p p lie d to
most s e r i a l l y c o rre la te d tim e s e rie s d a ta . 2J

2 / F o r a more d e ta ile d a n a ly s is of the lim it a t io n s in a p p lyin g standard
s t a t i s t i c a l te s ts to time s e rie s d a ta , see M. 0 . K e n d a ll, The Advanced Theo ry
o f S t a t i s t i c s , V o l. I I , Chapters 29 and 30, pp . 363-^39> H e ffn e r P u b lis h in g
C o . , New York 1951> and W. A . W a llis and H. C . Roberts ’’S t a t i s t i c s , A New
A ppro a ch,” p p . 559- 569, The Free P re ss, Glencoe, I l l i n o i s , 1956.




Table E-l# Linear and curvilinear equations of trends in output per man-hour, 1909-58
(1933 I 8 point of origin for years)
Item

Output per man-hour based on —
BLS man-hcurs
Census man-hours
Linear

Total change in output per man-hour . . .
Agric ultural-nonagri cultural
proportions constant with:
l^Q? output proportions .••••••••••» •

I 9O9 man-hour rroportions .....................
1958

man-hour proportions •••••••••••

Adjusted for change in capacity
u tiliza tio n ........................................




Log Y - I .858257 + .010105X
or
X
Y - (72.2)( 1.02*+)

Log Y - I . 88OO58 ♦ 0OO8823X
T - (7 5 !9 )(l.0 2 l)X
Log Y =* 1.876293 ♦ .008817X
or
x
Y = (75.2)( 1.021)
Log Y » 1.876131+ ♦ .008837X
or
x
Y - (75.2)( 1.021)
Log Y « 1.871+112 + .008810X
or
x
Y - (7l+.8)( 1.020)

Log Y YLog Y YLog Y -

Log Y - 1.539121 + .OO9879X ♦ .0031+15Z
or
X
Z
Y - (3 M )( 1.023) (1.008)

Log Y - 1.529101 ♦ .010068X + .003563Z
or
X
z

I .892828 + •OO895OX
(7 8 °l)(l.0 2 l)X
I . 88H 5I+ ♦ .OO896IX
or
x
( 76.I ) (1.021)
1.880859 + .OO8977X
or
j

T « (7 ^ .0 ) ( 1.0 21)

Log Y - 1.879209 ♦ .OO898OX
T - (75.7)(1.021)X

Y = (33.8Xl.023) ( 1. 008)

A -3 9

I 958 output proportions . . . . ............ .

Log Y = I . 85I+616 ♦ .009915X
or
v
Y - ( 7 l . 6)( 1. 023)

Table E-l* Linear and curvilinear equations of trends in output per man-hour, 1909-5$—Continued
__________(1933 is point of origin for years)
Output per man-hour based on —
BLS man-hours
Census man-hours
Curvilinear - Parabola.
Log Y - 1*8293^5 ♦ *00979i+X ♦ *00012IX
•«*

x

Y - (67.5)(1.023) (1.0003)
Agri cultural-n onagri cultural
proportions constant with:
1909 output proportions ......................

1958 outpiyt proportions . . . ............. ..
I 909 man-hour proportions *............. ..

x2

Log Y = I . 852U26 ♦ .OO869OX + .000133X
or
2
X
X
Y * (71.2)( 1.020) (1.0003)

Log Y « I .856383 ♦ *008721X ♦ .000096X*
or
2
X
X
Y - (71.8X l.020) (1.0002)
2
Log Y « 1*856695 ♦ *00871 ♦ .000093X
t3X
or
2
X
X
Y -

(7 l.9 )(

1 . 0 2 0)

(

1 . 0 0 0 2)

1958 B&n-hour proportions ............... * Log Y - I .858992 ♦ .008737X ♦ *000073X
or
2
X
X
Y “ (72.3)( 1. 020) (1.0002)
Adjusted for change in capacity
u tiliza tio n ...............................................

2

Log Y »

1*626669

or

+ .OO9802X ♦ .000089X
+ *0022682

2

2

Log Y - 1.830326 ♦ .OC9971X ♦ .OOOIS'+X
or
Y - (67.7)(1.023)X(1.0003)X
Log Y - 1.86U4614 * . 00881m ♦ . 000136X
or
X
X9
Y - (73.2)( 1.021) (1.0003)
Log Y - I .858728 ♦ . 00885>+X + .000108X
or
0
X
X
Y - (72.2)(1.021) (1.0002)
Log Y - I . 859O3I + .008372X + .000105X2
or
2
X
X
Y - (7 2 .3 X 1.021) (1.0002)
Log Y - 1.861^37 ♦ .OO8895X + .OOOO85X
or
2
Y - (7 2 .7 ) ( 1 . 0 2 1 ) (1.0002)
Log Y - 1.629596 ♦ .OO998OX + .000102X2
♦ .0022U6Z
or

X
X*Z
Y - (H 2.6)(1.023)X(1.0002)X (1.005)Z
Y - (lt2.3)( 1.023) (1.0002) (1.005)
Curvilinear - Hyperbola

Total change in output per man-hour*.




Lo* r - u < 5 3 > / l

or

------------------- —

Log Y
or

----------------;
» * ( W

9 ‘

Crtj-v

Total ehange in output per man-hour..













a

A p p e n d ix F .

S e l e c t e d B i b l i o g r a p h y on M e th o d s and S o u r c e s o f G r o s s n a t i o n a l
P r o d u c t E s t i m a t e s and R e c e n t S t u d i e s o f R a t i o n a l P r o d u c t i v i t y

A b r a m o v itz , M o se s.
18 70 ,

-4 5

R e s o u r c e s a n d O u tp u t T r e n d s i n t h e U n i t e d S t a t e s S i n c e

O c c a s i o n a l P a p e r 5 2 , New Y o r k , N a t i o n a l B u re a u o f E co n om ic R e s e a r c h ,

I n c •, 195^*
D e n i s o n , Edw ard F .
N a t i o n a l In com e A c c o u n t i n g an d I n t e g r a t i o n o f F e d e r a l
S t a t i s t i c s , P r o c e e d i n g s o f B u s i n e s s and E c o n o m ic S t a t i s t i c s S e c t i o n ,
A m e r ic a n S t a t i s t i c a l A s s o c i a t i o n , D e t r o i t , M i c h . , 1 9 5 6 ,
A m e r ic a n S t a t i s t i c a l A s s o c i a t i o n , 1 9 5 7 *
D e w h u r s t, J . F r e d e r i c

an d A s s o c i a t e s .

W a s h in g to n , D . C .

A m e r i c a 's N e e d s an d R e s o u r c e s ,

A New

S u r v e y , New Y o r k , T h e T w e n t i e t h C e n t u r y F u n d , 1 9 5 5 *
F a b r i c a n t , S o lo m o n .

B a s ic F a c t s on P r o d u c t i v i t y C h a n g e , O c c a s io n a l P a p er 6 3 ,

New Y o r k , N a t i o n a l B u r e a u o f E co n o m ic R e s e a r c h ,

I n c .,

1959

J a s z i , G eorge.
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* U.S. GOVERNM
ENT PRINTING OFFICE : 1960 O—538S1 1