We are seeing some large increases in labor income per employee in 2020 - is there a release note on labor income? Is this related in any way to COVID?
General Question about Labor Income
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Official comment
Hello!
Would you mind sharing some more information on where you are noticing these large increases? i.e. Region, Industry, etc. While it is normal to see some fluctuation in these ratios across IMPLAN Data Years, the 2020 Data Year is certainly a special case as it reflects the unique state of the national economy at the time. You can find some of those caveats laid out in our 2020 Data Release Notes.
Best,
Michael Nealy
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We are diving into this for Ag production industries in NY for 2020 versus 2019. The driver of labor income increases is to Proprietor income, not employee compensation. In fact, employee compensation in the ag production industries went way down (like 20%) at a time where output went up modestly. Further, TOPI went way down (often negative). I am trying to decipher how much of the changes across these sectors is due to (1) supplemental farm payments from the government due to the trade war with China and (2) Covid related payments like PPP.
I think the drop in farm employee compensation is offset by covid payments (showing up as a negative tax in TOPI). And the strong increase in PI is from China trade war payments (that also show up as negative tax (subsidy) in TOPI).
We don't see these trends for food manufacturing industries in the state where the most notable changes are huge increases in OPTI.
If there is anyway we can get assistance on delineating these things specifically, that would be super helpful.
Todd Schmit
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Hello Todd - I reached out to our Chief Economist regarding your inquiry, who wanted to make a few notes:
PPP subsidies show up in the data as reductions in Net TOPI and increases in OPI. The BEA data are just at the “Farm” level – no breakout by the 14 specific IMPLAN farm sectors; for that distribution we use data from the latest BEA Benchmark tables which are released every 5 years and have the necessary industry detail.
Regarding PI, we get PI from the BEA’s Regional Economic Accounts tables, which are lagged a year. Those data too have just a single “Farms” sector so we distribute to the 14 IMPLAN farm sectors based on current output estimates for the farm sectors times various ratios (e.g., PI per Output) from the latest BEA Benchmark, which as mentioned above, has the necessary industry detail. The raw BEA REA data show a more than doubling of PI between 2018 and 2019, which is thusly reflected in the 2020 IMPLAN data. We don’t project the lagged (2019 in this case) figures since PI can be positive or negative and often flips signs one year to the next and is not tied closely to changes in EC or other data points, making it very hard to predict/project – so we prefer to use a lagged value rather than a projected value.
In sum, there was no special treatment of the 2020 data and there was not a new BEA Benchmark or anything else that shifted from Data Year 2019 to Data Year 2020, and the changes are well reflected in the raw data.
Best,
Michael Nealy
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