The EPS currently calculates the policy-driven change in number of jobs, total employee compensation, and average compensation per employee (in inflation-adjusted dollars). However, this only shows part of the picture of household welfare. Households may also have a lower cost of living due to the policy package - for instance, energy efficiency policies may cause them to spend less on energy, material efficiency policies may reduce their spending on materials, etc. On the other hand, a carbon tax might increase cost of living.
The EPS already calculates the change in expenditures by households. Consider dividing this by the number of households to get a cost-of-living adjustment per household. Determine the average number of employees per household (total EEs / total households), then create an adjusted version of the "Change in Average Employee Compensation" graph that adds the change in cost of living (subtracting for reductions). This could be a second line on the Average Employee Compensation graph, so it's possible to see the adjusted and unadjusted figures. This should not need any additional input data.
Consider whether to include a cost-of-living adjusted line in the Change in Total Employee Compensation graph as well.
However, do not include the cost-of-living adjustment in any of the Change in Cash Flow graphs that existed prior to 3.0 (e.g. change in cash flow by entity, or the components of the change in labor and consumer cash flow), as these graphs use a uniform methodology across cash flow entities. Labor/consumers must not be treated differently in these graphs.
The EPS currently calculates the policy-driven change in number of jobs, total employee compensation, and average compensation per employee (in inflation-adjusted dollars). However, this only shows part of the picture of household welfare. Households may also have a lower cost of living due to the policy package - for instance, energy efficiency policies may cause them to spend less on energy, material efficiency policies may reduce their spending on materials, etc. On the other hand, a carbon tax might increase cost of living.
The EPS already calculates the change in expenditures by households. Consider dividing this by the number of households to get a cost-of-living adjustment per household. Determine the average number of employees per household (total EEs / total households), then create an adjusted version of the "Change in Average Employee Compensation" graph that adds the change in cost of living (subtracting for reductions). This could be a second line on the Average Employee Compensation graph, so it's possible to see the adjusted and unadjusted figures. This should not need any additional input data.
Consider whether to include a cost-of-living adjusted line in the Change in Total Employee Compensation graph as well.
However, do not include the cost-of-living adjustment in any of the Change in Cash Flow graphs that existed prior to 3.0 (e.g. change in cash flow by entity, or the components of the change in labor and consumer cash flow), as these graphs use a uniform methodology across cash flow entities. Labor/consumers must not be treated differently in these graphs.
Suggested by Skip Laitner on 7/14/2020