State:

National
There are a number of statistics of interest to employers that indicate current economic conditions and employee compensation trends. Here is an overview of four of the most significant of those statistics. Three are released by the Bureau of Labor Statistics (BLS), a branch of the U.S. Department of Labor. Their website is at www.bls.gov. One is released by The Conference Board (Board), a private, nonprofit research organization. Their website is at www.conference-board.org.
Payroll data. Each month, BLS collects payroll data from records reported on a voluntary basis to the Bureau and its cooperating state agencies by thousands of organizations. Monthly averages are calculated for nonsupervisory workers in manufacturing, mining, construction, transportation, public utilities, wholesale and retail trade, finance, insurance, real estate, and other services. These groups account for over 80 percent of the total employment on private nonagricultural payrolls.
The average hourly rate includes all payments that production or nonsupervisory workers receive during the survey period, including premium pay for overtime or shift work, but not including the value of employee benefits, irregular bonuses, and other special payments. This means that the numbers vary according to changes in (1) employee base pay, (2) hours worked, and (3) shifts worked and shift premium rates.
Current earnings/rate of change. This indicator includes the following statistics: (1) the latest average hourly rate—considered preliminary and subject to revision—for all production workers, and (2) the percent increase for selected 12-month periods (calculated using the formula new rate minus old rate, divided by old rate, converted to a percentage by rounding to three digits and multiplying by 100). Thus, if the average hourly rate reported for last month was $11.00, up from $10.80 in the same month last year, then the change in this rate was: ($11.00 - $10.80) ÷ $10.80 = 0.0185, or 1.9 percent. Occasionally, the data will reflect downward movement.
Using hourly earnings data. Hourly earnings are useful as a basic guide to how wages are changing, but they must be used with care. For example, there would be no point in trying to compare the current national or state hourly rate with the average rate earned by employees in your organization. The precise demographic composition of your workforce—especially in terms of skills, education, and experience—not to mention your company's unique mix of job classifications and working hours would make a comparison with the “average” employer, to which the government's figures apply, all but useless. A better source of rates would be a survey of base compensation in your labor market.
While the direct applicability of current data may be limited, much can be gained from an examination of past data. The percent of increase figures will be of greatest use. These percentages typically rise and fall with changes in the cost of living, although they usually lag behind the Consumer Price Index (CPI) by several months. This means that they are potentially useful indicators of what adjustments in pay rates are needed to keep them up-to-date.
To illustrate, if you know that the average hourly rate has risen 1.9 percent in the past 12 months, the CPI has risen 2.7 percent, and wages in your labor market have gone up 3.1 percent since last year's survey—this gives you a ballpark idea of how much to increase wages. Of course, it's only a starting point. You must also consider the organization's ability to pay, your ability to attract and retain workers with your current wage levels, and how your present rates compare with what others are paying in your labor market.
Each month, the BLS reports on personal interviews conducted with about 60,000 American households, selected to be representative of the U.S. population. Based on that sample, the BLS calculates the numbers of employed and unemployed. Here's how the tabulation is done:
Employed. Those counted as employed include: (1) all civilians who worked for pay at any time during the week in which the survey is taken; (2) those who worked unpaid for 15 hours or more in a family-operated enterprise; (3) those who were temporarily absent from their regular jobs because of illness, vacation, industrial dispute, etc.; and (4) members of the armed forces stationed in the United States.
Unemployed. The unemployed include: (1) those who did no work during the survey week but made a specific effort to look for a job within the preceding four weeks, plus (2) those who did no work during the survey week but did not look for work because they were on layoff or waiting to start new jobs within the next 30 days.
While these figures obviously understate the actual level of joblessness in our country—a person who works just one hour during the survey week is counted as employed, while someone who has stopped looking for work in a stagnant labor market is not counted as unemployed—still, they are interesting and useful when considered in relative terms. They can tell us when a tight labor market is beginning to show signs of loosening, and vice-versa, and they can reveal cyclical trends in employment that are important to strategic decision making.
Each month, the BLS collects pricing data on prices on a “market basket” of food, clothing, shelter, fuel, prescriptions, transportation fares, medical fees, and other goods and services that people buy for day-to-day living. The BLS measures changes in these costs and reports them in the form of the Consumer Price Index (CPI). The CPI, as defined by the BLS, is a measure of the average change over time in prices paid by urban consumers for this “market basket” of goods and services. For example, if an average family had to spend $50 for groceries in 1988 and $150 for those same groceries in 1998, the CPI would have tripled in 10 years. The BLS measures changes in these costs from year to year and reports on them in the form of two CPIs: the CPI-W and the CPI-U.
The CPI-W is the older index. It covers only urban wage earners and clerical workers and represents about 32 percent of the U.S. population.
The CPI for Urban Consumers (CPI-U) is the newer, broader index. It began in 1978 and represents the buying habits of about 87 percent of the U.S. urban population. The BLS bases the CPI-U on the expenditures of almost all residents of urban or metropolitan areas, including professional, managerial, and technical workers; the self-employed; the poor; short-term workers; the unemployed; and retired persons, as well as urban wage workers and clerical workers.
The CPI market basket is developed from detailed expenditure information provided by families and individuals on what they actually bought. This information is collected from Consumer Expenditure Surveys that survey thousands of families from around the country to gather information from each quarter on their spending habits. To collect information on frequently purchased items, such as food and personal care products, another set of thousands of families in each of these years keep diaries listing everything they bought during a 2-week period.
Is the CPI an accurate measure? A criticism of the CPI is that it takes expenditures from a fixed market basket of goods at some point in the past and does not reflect changing trends, buying patterns, and how consumers respond to price changes and new products.
For many years, the CPI was based on changing in buying habits dating from 1967. The index is now based on a 2013–2014 market basket, with references to prior data collection periods as a base. Critics argue that with technological advances alone, however, the index is not an accurate representation of American buying habits.
Area CPIs are by-products of the national CPI. Since local indexes have smaller sample sizes than the national index, they are more subject to error. As a result, local area CPIs show more variation than the national index, although their long-term trends are similar. For this reason, the BLS strongly urges users to consider adopting the national average CPI for use in their escalator clauses.
Using the index. The CPI remains useful for calculating relative changes in costs, using the following formula: New index minus old index, divided by old index, converted to a percentage by rounding to three digits and multiplying by 100. Thus, if the CPI-U stood at 184.2 in December 2013, up from 178.8 the previous December, the rise in the cost of goods from December 2012 to December 2013 was (184.2-178.8) ÷ 178.8 = 5.4/178.8 = 0.030, or 3.0 percent.
Why the CPI is important to employers. Many employers monitor the CPI closely because wages tend to follow changes in the cost of goods. It's a common practice among compensation specialists interested in keeping pay and rate ranges up to date to increase them by at least the percentage of increase in the CPI. Multiyear collective bargaining agreements often refer to wage “indexing,” a direct reference to the CPI.
The income of a large portion of the U.S. labor force is linked to the CPI. Employees with contracts or wage plans having automatic increases based on the index are included in this group. These increases are often referred to as cost-of-living adjustments (COLAs). Given many employers use the annual CPI as their COLA, it’s easy to think that the CPI and COLA are the same. COLA, as calculated by many employers, however, uses the CPI-U, but, as calculated by the government, uses CPI-W.
Social Security COLA. Soon after the publication of the September CPI each October, the Social Security Administration (SSA) announces the annual change in its benefit payments for the coming year for Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) and Supplemental Security Income (SSI) programs. Specific information on how the SSA uses the CPI to determine COLAs can be found at http://www.ssa.gov/OACT/COLA/colasummary.html.
How to obtain CPI data. The U.S. Department of Labor’s BLS issues national data monthly; the CPI for some geographic areas is reported monthly and bimonthly or every 6 months for other areas. The figures are released around the 26th of each month and are widely reported in the media. The latest available CPI figures and percent of increase in the index can also be found in the Merit Increase Resource Center at www.compensation.blr.com. For additional information on CPI statistics, see the national Consumer Price Index section on the BLS website at www.bls.gov.
The Help Wanted Online Data Series (HWOL) is published monthly by The Conference Board, whose website is located at www.conference-board.org. The HWOL measures the number of new, first-time online jobs and jobs reposted from the previous month for over 16,000 Internet job boards, corporate boards, and smaller jobsites that serve niche markets and smaller geographic areas.
The HWOL is not a direct measure of job vacancies. The level of ads in print and online can change for reasons not related to overall job demand. The HWOL began in May 2005. With the September 2008 release, the HWOL began providing seasonally adjusted data for the United States, the nine census regions, and the 50 states. Seasonally adjusted data for occupations were provided beginning with the May 2009 release, and seasonally adjusted data for the 52 largest metropolitan areas began with the February 2012 release.
Last updated on August 25, 2016.
Related Topics:
National
There are a number of statistics of interest to employers that indicate current economic conditions and employee compensation trends. Here is an overview of four of the most significant of those statistics. Three are released by the Bureau of Labor Statistics (BLS), a branch of the U.S. Department of Labor. Their website is at www.bls.gov. One is released by The Conference Board (Board), a private, nonprofit research organization. Their website is at www.conference-board.org.
Payroll data. Each month, BLS collects payroll data from records reported on a voluntary basis to the Bureau and its cooperating state agencies by thousands of organizations. Monthly averages are calculated for nonsupervisory workers in manufacturing, mining, construction, transportation, public utilities, wholesale and retail trade, finance, insurance, real estate, and other services. These groups account for over 80 percent of the total employment on private nonagricultural payrolls.
The average hourly rate includes all payments that production or nonsupervisory workers receive during the survey period, including premium pay for overtime or shift work, but not including the value of employee benefits, irregular bonuses, and other special payments. This means that the numbers vary according to changes in (1) employee base pay, (2) hours worked, and (3) shifts worked and shift premium rates.
Current earnings/rate of change. This indicator includes the following statistics: (1) the latest average hourly rate—considered preliminary and subject to revision—for all production workers, and (2) the percent increase for selected 12-month periods (calculated using the formula new rate minus old rate, divided by old rate, converted to a percentage by rounding to three digits and multiplying by 100). Thus, if the average hourly rate reported for last month was $11.00, up from $10.80 in the same month last year, then the change in this rate was: ($11.00 - $10.80) ÷ $10.80 = 0.0185, or 1.9 percent. Occasionally, the data will reflect downward movement.
Using hourly earnings data. Hourly earnings are useful as a basic guide to how wages are changing, but they must be used with care. For example, there would be no point in trying to compare the current national or state hourly rate with the average rate earned by employees in your organization. The precise demographic composition of your workforce—especially in terms of skills, education, and experience—not to mention your company's unique mix of job classifications and working hours would make a comparison with the “average” employer, to which the government's figures apply, all but useless. A better source of rates would be a survey of base compensation in your labor market.
While the direct applicability of current data may be limited, much can be gained from an examination of past data. The percent of increase figures will be of greatest use. These percentages typically rise and fall with changes in the cost of living, although they usually lag behind the Consumer Price Index (CPI) by several months. This means that they are potentially useful indicators of what adjustments in pay rates are needed to keep them up-to-date.
To illustrate, if you know that the average hourly rate has risen 1.9 percent in the past 12 months, the CPI has risen 2.7 percent, and wages in your labor market have gone up 3.1 percent since last year's survey—this gives you a ballpark idea of how much to increase wages. Of course, it's only a starting point. You must also consider the organization's ability to pay, your ability to attract and retain workers with your current wage levels, and how your present rates compare with what others are paying in your labor market.
Each month, the BLS reports on personal interviews conducted with about 60,000 American households, selected to be representative of the U.S. population. Based on that sample, the BLS calculates the numbers of employed and unemployed. Here's how the tabulation is done:
Employed. Those counted as employed include: (1) all civilians who worked for pay at any time during the week in which the survey is taken; (2) those who worked unpaid for 15 hours or more in a family-operated enterprise; (3) those who were temporarily absent from their regular jobs because of illness, vacation, industrial dispute, etc.; and (4) members of the armed forces stationed in the United States.
Unemployed. The unemployed include: (1) those who did no work during the survey week but made a specific effort to look for a job within the preceding four weeks, plus (2) those who did no work during the survey week but did not look for work because they were on layoff or waiting to start new jobs within the next 30 days.
While these figures obviously understate the actual level of joblessness in our country—a person who works just one hour during the survey week is counted as employed, while someone who has stopped looking for work in a stagnant labor market is not counted as unemployed—still, they are interesting and useful when considered in relative terms. They can tell us when a tight labor market is beginning to show signs of loosening, and vice-versa, and they can reveal cyclical trends in employment that are important to strategic decision making.
Each month, the BLS collects pricing data on prices on a “market basket” of food, clothing, shelter, fuel, prescriptions, transportation fares, medical fees, and other goods and services that people buy for day-to-day living. The BLS measures changes in these costs and reports them in the form of the Consumer Price Index (CPI). The CPI, as defined by the BLS, is a measure of the average change over time in prices paid by urban consumers for this “market basket” of goods and services. For example, if an average family had to spend $50 for groceries in 1988 and $150 for those same groceries in 1998, the CPI would have tripled in 10 years. The BLS measures changes in these costs from year to year and reports on them in the form of two CPIs: the CPI-W and the CPI-U.
The CPI-W is the older index. It covers only urban wage earners and clerical workers and represents about 32 percent of the U.S. population.
The CPI for Urban Consumers (CPI-U) is the newer, broader index. It began in 1978 and represents the buying habits of about 87 percent of the U.S. urban population. The BLS bases the CPI-U on the expenditures of almost all residents of urban or metropolitan areas, including professional, managerial, and technical workers; the self-employed; the poor; short-term workers; the unemployed; and retired persons, as well as urban wage workers and clerical workers.
The CPI market basket is developed from detailed expenditure information provided by families and individuals on what they actually bought. This information is collected from Consumer Expenditure Surveys that survey thousands of families from around the country to gather information from each quarter on their spending habits. To collect information on frequently purchased items, such as food and personal care products, another set of thousands of families in each of these years keep diaries listing everything they bought during a 2-week period.
Is the CPI an accurate measure? A criticism of the CPI is that it takes expenditures from a fixed market basket of goods at some point in the past and does not reflect changing trends, buying patterns, and how consumers respond to price changes and new products.
For many years, the CPI was based on changing in buying habits dating from 1967. The index is now based on a 2013–2014 market basket, with references to prior data collection periods as a base. Critics argue that with technological advances alone, however, the index is not an accurate representation of American buying habits.
Area CPIs are by-products of the national CPI. Since local indexes have smaller sample sizes than the national index, they are more subject to error. As a result, local area CPIs show more variation than the national index, although their long-term trends are similar. For this reason, the BLS strongly urges users to consider adopting the national average CPI for use in their escalator clauses.
Using the index. The CPI remains useful for calculating relative changes in costs, using the following formula: New index minus old index, divided by old index, converted to a percentage by rounding to three digits and multiplying by 100. Thus, if the CPI-U stood at 184.2 in December 2013, up from 178.8 the previous December, the rise in the cost of goods from December 2012 to December 2013 was (184.2-178.8) ÷ 178.8 = 5.4/178.8 = 0.030, or 3.0 percent.
Why the CPI is important to employers. Many employers monitor the CPI closely because wages tend to follow changes in the cost of goods. It's a common practice among compensation specialists interested in keeping pay and rate ranges up to date to increase them by at least the percentage of increase in the CPI. Multiyear collective bargaining agreements often refer to wage “indexing,” a direct reference to the CPI.
The income of a large portion of the U.S. labor force is linked to the CPI. Employees with contracts or wage plans having automatic increases based on the index are included in this group. These increases are often referred to as cost-of-living adjustments (COLAs). Given many employers use the annual CPI as their COLA, it’s easy to think that the CPI and COLA are the same. COLA, as calculated by many employers, however, uses the CPI-U, but, as calculated by the government, uses CPI-W.
Social Security COLA. Soon after the publication of the September CPI each October, the Social Security Administration (SSA) announces the annual change in its benefit payments for the coming year for Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) and Supplemental Security Income (SSI) programs. Specific information on how the SSA uses the CPI to determine COLAs can be found at http://www.ssa.gov/OACT/COLA/colasummary.html.
How to obtain CPI data. The U.S. Department of Labor’s BLS issues national data monthly; the CPI for some geographic areas is reported monthly and bimonthly or every 6 months for other areas. The figures are released around the 26th of each month and are widely reported in the media. The latest available CPI figures and percent of increase in the index can also be found in the Merit Increase Resource Center at www.compensation.blr.com. For additional information on CPI statistics, see the national Consumer Price Index section on the BLS website at www.bls.gov.
The Help Wanted Online Data Series (HWOL) is published monthly by The Conference Board, whose website is located at www.conference-board.org. The HWOL measures the number of new, first-time online jobs and jobs reposted from the previous month for over 16,000 Internet job boards, corporate boards, and smaller jobsites that serve niche markets and smaller geographic areas.
The HWOL is not a direct measure of job vacancies. The level of ads in print and online can change for reasons not related to overall job demand. The HWOL began in May 2005. With the September 2008 release, the HWOL began providing seasonally adjusted data for the United States, the nine census regions, and the 50 states. Seasonally adjusted data for occupations were provided beginning with the May 2009 release, and seasonally adjusted data for the 52 largest metropolitan areas began with the February 2012 release.
Last updated on August 25, 2016.
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