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By New_Deal_democrat May 7, 2014 9:25 am
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Unit labor costs rise 4.2% in the first quarter

Unit labor costs are a measure of productivity:  how much does business pay a worker in order to get one unit of production?

 

Last year Pulitzer Prize winning labor reporter David Cay Johnston got caught up in some statistical sloppiness, as first quarter 2013 unit labor costs dropped -3.5% that quarter.  He forgot that income had been moved forward into 4Q 2012 due to the expiration of some of Bush's tax cuts, thus creating a big distortion in the data (unit labor costs had increased over 8% in 4Q 2012).

 

With this morning's release, unit labor costs are about 2/100's of a percent from their all time peak:

 

 

But this isn't unalloyed good news, since adjusting for inflation shows us that businesses are still paying labor about 12% less than they were only a decade ago for the same amount of production, 

 

 

although the measure may have stabilized in the last 2 years.

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