U.S. Real Hourly Earnings Index, Production and Nonsupervisory Workers, 1964 = 100 (Productivity vs. Pay)

## What this measures

The average hourly earnings of production and nonsupervisory employees on private nonfarm payrolls (fred_ahetpi), divided by the consumer price index for all urban consumers (fred_cpi), month by month. Palanor averages each quarter's months (at least two must report: October 2025 has no CPI-U, which the federal shutdown cancelled) and divides by the 1964 average, times 100. Quarterly, from 1964, when the earnings series begins.

## Why it matters

This is the hourly pay of the large majority of private-sector workers, in terms of what it buys. Set beside output per hour (us.productivity_pay.productivity_index), it shows whether typical hourly pay has kept pace with productivity since the mid-1960s.

## How to read it

An index: 120 means real hourly earnings are a fifth above their 1964 average. Read with the productivity index; the gap between them is us.productivity_pay.gap.

## What it does not say

It compares earnings, not total compensation: benefits and employer payroll taxes are left out, and they have grown as a share of pay. The Economic Policy Institute's well-known version uses total compensation and a different productivity and price measure, so its gap is not the same number. The two indexes use different prices: earnings are deflated by consumer prices, while productivity is measured in the prices of what the nonfarm business sector produces. Production and nonsupervisory workers are about four in five private-sector employees; the pay of managers, the self-employed and owners is outside the earnings line but inside the output. None of these is a judgement about why the lines diverge.

## Source

U.S. Bureau of Labor Statistics: nonfarm business labor productivity (OPHNFB), average hourly earnings of production and nonsupervisory employees (AHETPI) and the CPI-U (CPIAUCSL), read from FRED. Public domain. Indexes calculated by Palanor.