Our primary database for wages comes from NIPA. We use employee compensation (EC) because it includes wages and salaries of employees as well as employer contributions to social security. This is the appropriate base for estimates of variable capital, since it represents the total cost of labor power to the capitalist.
A combination of BLS and NIPA data is used to estimate the wage per production worker. This is then applied to the estimate of the number of productive workers from Appendix F to derive the total wage bill of productive labor (variable capital). The wage bill of unproductive workers is derived as the difference between total NIPA wages and total variable capital. The basic steps involved will now be outlined.
Starting with the NIPA measure of employee compensation EC, we make two adjustments. First, because EC covers only employees whereas our measure of total employment L includes both employees and self-employed persons, we need to make some estimate of the wage equivalent of self-employed persons. Second, we must split the resulting measure of total wages into wages of productive and unproductive workers.