ECONOMIC

Chart 4Productivity, Compensation, and Unit LaborCosts in the Private Nonfarm EconomyINDEX, 1970 IV=100130125RATIO SCALE120115COMPENSATIONPER MAN-HOUR110105UNIT LABOR COSTS100j L1970 1971 1972 1973NOTE.-DATA RELATE TO ALL PERSONS.SOURCE: DEPARTMENT OF LABOR.labor costs in the same sector. This is true even though real compensationper man-hour—money compensation deflated by the consumer price index—is likely to have suffered a small decline instead of having risen as it usuallydoes.Wage rate adjustments under major collective bargaining agreementswere substantially lower in 1973 than in 1972. For the first year of thecontract, increases averaged 5.8 percent, down from 7.3 percent in 1972;the slowdown for wages and benefits combined was a little smaller. (SeeChapter 3 for further treatment of wage rates.)Wage changes under such bargaining agreements are limited in scopebecause only one-fourth of all workers are unionized and only one-halfof these are covered by large contracts. A useful indicator of wage ratebehavior is the Labor Department's index of adjusted average hourlyearnings, which is applicable to all private nonfarm industries. The indexholds constant overtime hours in manufacturing and industry mix, but itdoes not cover fringe benefits or compensation of employees other than69