Posted on December 7, 2020
Here’s just a quick paragraph and a chart about anemic growth in aggregate wages and salaries in the national economy as reported by the Bureau of Labor Statistics (BLS) in its monthly establishment survey for November. Total wages and salaries of private-sector workers improved slightly, from being down by 0.9 percent on a year-over-year basis in October to being down by 0.7 percent in November on that same year-over-year basis (see chart below). The slight improvement came completely from an increase in average hours worked per employee, as total employment and average hourly earnings had no change in year-over-year growth compared to the comparable measure of growth in October. (The multiplication of those three measures–total employment, average hours worked per employee, and average hourly earnings–yields total wages and salaries.) Our monthly measure of growth in economywide tax withholding, based on daily data from the U.S. Treasury Department, has continued to roughly track that BLS measure of private-sector wages. The most important determinant of tax withholding is wages and salaries. Our withholding measure is adjusted to remove the estimated effects of both tax law changes and the different makeup of business days between months.
