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The Importance of Wage Surveys

by: Valerie A. Davis

This article describes the importance of wage surveys. Wage information is of primary interest to Wyoming Department of Employment users as evidenced by the reader survey conducted in October 1995 in Wyoming Labor Force Trends (TRENDS). Some of the users that request wage survey information as well as examples of how they use it are listed in Table 1. Wage survey data helps employers around the country find out if Wyoming's occupational pay rates are competitive. For example, an employer can check the average wage for a welder in Wyoming to find out if moving their business to Wyoming would be advantageous. It also helps students pick a career that is right for them, considering the liveable wage and whether or not the occupation is growing. In this way, wage data assists career guidance counselors in helping their clients select careers.

Table 1: Wage Survey Information Users and Uses
Users Some Uses
Attorneys; Insurance Companies To compute loss of earnings for legal proceedings, insurance payouts.
BanksIn order to give out loans, finding out general occupational wages.
Career Counselors; Colleges and Universities; Currently Employed; Employment Resource Centers; Individuals; Job Training & Assistance Centers; School Districts; Training Providers; Vocational Rehabilitation To find out the prevailing wage for an occupation; employees can use the data to compare their firms' wage structure with the industry as a whole; to determine the local labor market conditions; potential training opportunities; using past data to help predict future wages, occupational and industrial shifts; assist job hunters in finding growth occupations that might suit them; evaluate, improve and eliminate training programs or plan new ones; assess and update the college curriculum based on current employer needs and projected trends; assist the unemployed in selecting employment; perform career path analysis, basic skill development, youth pre-employment and adult education; where to find the jobs; whether or not to obtain more training.
Chambers of Commerce; Convention, Travel, Tourist Bureaus; Economic Development; Private Industry; Program Planners; Utility Companies What a potential employer would have to pay to be competitive; as indicators of wage patterns throughout the state; what an occupation earns in an area or state; make decisions in labor/management negotiations; to evaluate employment trends in terms of business staffing needs; should a business open a new establishment, acquire new equipment, expand or downsize; labor availability; how the current workforce should be trained or retrained; analysis of labor market conditions; if forecasts of business activity justify increasing the workforce; where can additional workers be found; what is the impact of workers' current earnings on future government revenues; to determine the labor shortages or surpluses in each industry; data are useful in determining the potential for business growth and development; to improve recruitment methods.
LibrariesAs reference materials for public and private entities.
NewspapersTo enhance news stories and inform readers about wage trends when writing about occupations.
Real EstateTo determine what the economic situation is in a given area.

Wyoming`s Research & Planning section (R&P) produces various Labor Market Information (LMI) publications. These are produced for the benefit and use of businesses, government entities and the public. In 1995, 46 percent of the LMI requests were specifically for wage survey data (published in the December 1993, December 1994 and September 1995 issues of TRENDS). In 1996, 36 percent of the requests for LMI received were for wage survey information (published in the December 1994, September 1995 and September 1996 issues of TRENDS). The reason the requests have gone down may be because people can now access wage survey information directly on the Internet. The latest survey results are available via R&P's home page at: http://doe.state.wy.us/LMI/

Because of the Internet, there is now a way to obtain Labor Market Information by "pointing and clicking", using a computer mouse, on one of the many sections of R&P's home page. This information may also be requested by mail, fax or telephone. The difference between the amount of accesses on the Internet and the amount of requests by mail, telephone or fax by individuals or organizations is very large. There were far more accesses to this information on the Internet than there were requests for it by mail, fax or telephone. In October 1996, there were 1,239 total users from all over the United States and from foreign countries on the Internet accessing the LMI site. Also, up to 3,000 accesses have occurred in one month on the wage survey sections of TRENDS. One user can access the LMI site many times.

Wage Surveys in the Past: 1/3 of All Industries Eligible to Be Sampled

For the last four years, the Wyoming Occupational Wage Survey has been conducted by Research & Planning. Due to limited funding and personnel resources, the Wyoming Occupational Wage Survey included only one third of all the classified industries and selected occupations each year. Businesses throughout Wyoming were surveyed about wages paid to certain occupations, using Occupational Employment Statistics (OES) codes to describe these occupations. OES codes classify job descriptions in order to statistically analyze gathered data. An industry is the type of activity in which a business is engaged (e.g., Construction, Services and Retail Trade are industries). An occupation is the type of work one does to earn a living. The same occupation can occur in different industries (e.g., secretary, accountant and lawyer are occupations which may each be found in many different industries). Other occupations are industry-specific (e.g., the occupation of a police officer occurs only in the Government industry).

In the last wage survey, published in the September 1996 issue of Wyoming Labor Force TRENDS, 6,500 firms were surveyed regarding Professional and Technical occupations. Fifty-three percent of these businesses responded to the survey. The 3,445 surveys that were returned included data on 20,168 employees. Table 2 shows a sample of how the aggregate data appeared when published. Due to insufficient funding, this survey did not have a follow-up system (e.g., telephone calls to non-respondent firms).

Table 2: Samples of the Occupational Wage Survey Results
OES Descriptors Sample and Response 1995 Summary
CODE TITLE Total Sample Firms Number of Respondent Firms Estimated UI Occupational Employment in 1996 Valid Cases Min Max Mean Median
93914 WELDERS AND CUTTERS 537 60 996 409 4.50 21.96 12.07 10.67
55108 SECRETARIES, EXCEPT LEGAL AND MEDICAL 1,052 353 6,108 1,267 4.25 16.67 8.49 8.06
1996 Summary
21114 ACCOUNTANTS AND AUDITORS 3,099 1,655 1,265 663 4.25 45.00 13.41 12.62
28108 LAWYERS 350 210 667 189 8.65 113.33 34.44 19.88

Current Wage Surveys: All Industries Eligible to Be Sampled

This year, with funding and programming from the Bureau of Labor Statistics (BLS), the Wyoming Occupational Employment Statistics (OES) section started conducting a three-year wage survey in October of 1996. At that time, 1,750 randomly sampled Wyoming establishments were surveyed (1.2 million nationally). This survey includes all industries and all occupations each year, unlike the 1/3 of all industries each year that were surveyed in the Occupational Wage Survey. The OES program is a federal-state cooperative program funded by the federal BLS and the Employment and Training Administration (ETA). In 1996, all 50 states conducted the OES Wage Survey in the same way. The 1996 OES Wage Survey was the first time that BLS and the states requested of business establishments wages as well as occupations, including Regional and Metropolitan Statistical Area (MSA) wage data. Table 3 details the Regions/Areas included in Wyoming's OES program.

The results of this three-year survey round, which started in October 1996, will offer cross-state and city-to-city (MSA) comparisons of wages for occupations. The 1996 sampled units1 will not get surveyed again until 1999. Because several regions as well as MSA's are included in each state, the sampling done by BLS is known as stratified random sampling.

Wyoming's OES section compiles the raw data which is received by mail, fax, e-mail or phone (whichever is easiest for the employer) and then creates estimates of prevailing wages using these data. No firm or employee is ever identified, due to confidentiality laws. The employers sampled in 1996 cannot be sampled again until 1999. The three-year cycle reduces the reporting burden.

We receive a lot of support from Wyoming businesses regarding wage surveys but we would appreciate even more. Could your business provide this information which is so important to so many people? In the years to come, when a large white envelope with a survey form and booklet of definitions arrives at your place of business, please fill it out. If enough information is gathered, Wyoming will be able to publish--for the first time--data about the wages in the selected regions (see Table 3), the Casper MSA and the Cheyenne MSA, as well as statewide.

Table 3: Regions and Areas Included in the
1996 Occupational Employment Statistics (OES) Wage Survey
Region/Area Counties
Northwest Region Park, Big Horn, Washakie, Hot Springs and Fremont
Southwest Region Sublette, Teton, Lincoln, Uinta and Sweetwater
Northeast Region Sheridan, Johnson, Campbell, Crook and Weston
Central-Southeast Region Converse, Carbon, Niobrara, Albany, Platte and Goshen
Casper MSA* Natrona
Cheyenne MSA* Laramie
*Metropolitan Statistical Area (city); in Wyoming's case, counties approximate MSA's (see the table).

Valerie A. Davis is a Statistician, specializing in Occupational Employment Statistics (OES) with Research & Planning. She is also an Associate Editor of TRENDS.


1 One major employer can have several establishments or units around the state. This major employer would be contacted every year if its units are sampled. Also, critical units required to establish valid area estimates will be surveyed yearly.

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