Implementing the
Workforce Investment Act: Results from an Employer Survey Follow-Up of Casper College
Graduates
by:
Sara Saulcy, Economist
"That employees do not see much in the way of wage increases within six months following graduation is consistent with earlier analysis completed by R&P staff. The research indicates that larger gains in earnings associated with education do not typically appear until approximately 18 months after graduation."
This article
presents results from a survey of employers who hired Casper College graduates.
The previous article "Workforce Development and Community College
Outcomes", provides background information, along with a description of why the
survey was conducted, our techniques, and how we obtained the data. In this article
we discuss summary statistics, as well as potential reasons for the outcomes we
obtained.
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Frequently Used Terms
2000Q2 - second quarter of 2000 (includes months of April, May and
June; the quarter of graduation under consideration).
2000Q3 - third quarter of 2000 (includes months of July,
August and September).
2000Q4 - fourth quarter of 2000 (includes months of October,
November, and December; the first time that second quarter 2000 Unemployment
Insurance data are available).
Incumbent worker - an individual who worked prior to attending or
graduating from a postsecondary institution of higher education, or who worked while
attending school; an individual that does not represent new labor supply.
n - number of item responses.
New employee - an individual not employed at the time of graduation,
but who obtained employment within three months of graduation.
Out of labor force - individuals not counted as part of official
labor force figures. Although these individuals are not working, they are not counted
as unemployed because they are either unwilling, unable, or choose not to seek work.
Survey response - a questionnaire that was returned.
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The Population and Employer Responses
Our ability to conduct the survey was dependent on two factors: the availability of
student data, and the timing of the download of Unemployment Insurance (UI) Wage
Records.1 Once the data were available, student records
were matched to employer records by student Social Security Number (SSN) to obtain
the information required to conduct the survey. Because the survey was a pilot, and
because we wanted to evaluate how the survey might work in practice, we used six months
after graduation as a proxy for a Workforce Investment Act (WIA)
2 requirement that employers of graduates be surveyed six months after
hiring a training program graduate (see discussion in "Workforce Development
and Community College Outcomes: Pilot Survey Process”) for a
more complete discussion of data availability issues). Survey responses were
generated as shown in Table 1.
Using records that were matched among the Wage Records database, employer records, and
student data, R&P surveyed 113 individual employers regarding 145 graduates of
Casper College who they had hired. All graduates completed their instructional
programs in May 2000. Of those employers, 95 responded (84.1%) with information
about 134 Casper College graduates (92.4%).
Because graduates sometimes work for more than one employer, in some instances we received
multiple responses for a single graduate. Similarly, several graduates worked for the same
employer.
Overall, 158 of the 181 questionnaire forms mailed out to employers were returned,
resulting in a response rate of 87.3 percent. Of the 158 responses, five were
invalid.3 Government had the highest response rate
among major industries, while Retail Trade had the lowest response rate (see
Table 2). Note that the Standard Industrial Classification
system has ten divisions, but to avoid disclosure of confidential information in our
tables, we combined Finance, Insurance, & Real Estate (FIRE) with Services.
For the 153 valid responses, there were some instances when an employer did not
respond to certain questions. For example, while there were 31 survey responses for
graduates who were employed from the quarter of graduation through January 12, 2001,
when asked to report wages, only 26 responded to this item. Where relevant, the number
of responses to questions are reported in the text.
Our questionnaire centered on collecting information not available through administrative
databases.4 In cases where an employer reported that the
graduate was no longer employed by the company, the employer was only required to answer
five of ten questions (see "Workforce Development and Community College Outcomes"
about the types of questions asked on the questionnaire). Otherwise the employer was asked
to complete the entire survey. The Workforce Investment Act5
requires information regarding whether or not employers have been provided with
replacement wages or tax credits to employ the graduate. None of the employers
responded that the jobs were subsidized.
Industry, Occupation, and Training Program
Graduates identified in UI Wage Records were in ten different industries6 (see Table 2). Employer
responses to the questions regarding occupation yielded graduates working in
37 distinct occupations.7 In order to avoid disclosure
of confidential information, R&P aggregated Standard Occupational Classification
(SOC)8 titles into eight groups. Of the occupations
reported, 18 were Registered Nurses, the largest single occupational group in our
study (see Figure 1).
Wages, and Hours Normally Worked
The questionnaire asked employers about wages and weekly hours worked by May 2000
Casper College graduates. Four groups of graduates were identified (see
Table 1) for whom information about wages were requested:
• Employed in the quarter of graduation (2000Q2) and in
2000Q3, but not working for the same employer six
months after graduation;
• Employed within three months after graduation (2000Q3),
but not employed as of January 12, 2001 by the same
employer (six months after graduation);
• Employed in 2000Q2, 2000Q3, and six months after
graduation by the same employer; and
• Employed within three months after graduation and still
working for the same employer six months later.
The average wage for graduates employed in the quarter of graduation9 (2000Q2) and in 2000Q3, but not working for the same employer as of January
12, 2001 (as per employer response), was $7.78 per hour (n=38). For graduates employed
in 2000Q3 but not working for the same employer as of January 12, 2001 (as per employer
response), the average wage at hire was $7.57 per hour (n=38).
Employers of graduates still working for them six months after graduation were asked
about wages paid to employees as of January 12, 2001. This date was chosen because it
is the standard reporting date for Unemployment Insurance for wages paid in the first
quarter. The goal was to ease the burden on employers by encouraging them to draw
wage information from reports they are already required to submit.
For graduates employed in 2000Q2, 2000Q3, and as of January 12, 2001, the average wage
for April, May and June of 2000 was $10.31 (n=29). As of January 12, 2001 (six months
after graduation), the average wage for a graduate working for the same employer
increased by $1.23 to $11.54 (n=31).
Wages at first hire for graduates employed in 2000Q3 (within 3 months of graduation)
were $11.89 per hour (n=26). The wage increased by 36 cents per hour for graduates
still working for the same employer as of January 12, 2001 to $12.25 per hour (n=26).
Relative to the wages of new employees, incumbent workers’ wages for April, May and
June, 2000 and as of January 12, 2001 were lower in comparison to new employees’
wages at hire, and as of January 12, 2001. However, incumbent workers achieved in
the six-month period under consideration a substantial gain in wages in comparison
to that of new employees. Whereas the range of wage increases was fairly narrow for
new employees ($0 to $2.50 per hour), the range of wage increases for incumbent workers
was from $0 to $7.27 per hour. This suggests that incumbent workers who obtained
additional skills were, in some cases, rewarded with fairly substantial increases
in pay. Over the course of a year, an increase of $1.23 per hour (the average hourly
wage increase for incumbent workers) would translate to an increase of $2,558.40
annually (assuming a 40-hour work week).10 In contrast,
the average 36-cent gain for new workers would yield approximately a $748.80 gain in
annual earnings. The increases seen by new employees are probably attributable more
to standard incremental increases provided to all employees who stay on with an employer
for six months, rather than to education.
For all of the gains that many graduates see, half of all graduates working for the
same employer as of January 12, 2001 did not receive any pay increase at all in the
six months after graduation. Of new employees, only 32 percent received pay increases.
Incumbent workers more frequently received pay increases within six months of graduation,
with 66 percent receiving pay increases. The pay increase of 53 percent of incumbent
workers receiving increases was less than a dollar per hour.
That graduates do not see much in the way of wage increases within six months following
graduation is consistent with earlier analyses completed by R&P staff. The
research indicates that larger gains in earnings associated with education do not
typically appear until approximately 18 months after
graduation.11
Employers reported that their employees worked 34.4 hours per week on average
(n = 54). A similar national estimate of hours worked per week was reported by
the Bureau of Labor Statistics Current Employment Statistics program, which showed
for January 2001 that the average number of hours worked was 34.3.12
Benefits
Employers were asked about the types of benefits the employee received (see
Figure 2). Employees received paid vacation most
frequently (69.0%), with paid holidays being the second most frequent benefit
(63.8%). Similar results for paid vacation are reported in the recently released
employee benefits publication, Employee Benefits in Wyoming: 2000.13
One benefit that we neglected to inquire about was retirement. Despite the
omission, we would have expected employers to fill in the gap, as employers were
asked to report other benefits not listed on the questionnaire that were received
by their employees. None of the employers reported that their employees received
retirement benefits as another part of their compensation package.
Satisfaction
Consumer satisfaction is also a consideration of WIA. We asked employers about
their satisfaction with the employee’s work and work habits. The majority of
employers (94%) reported that they were either satisfied or very satisfied with
the employee’s work and work habits (n=98) (see Figure 3).
Only 6.1 percent report they were less than satisfied. A more in-depth discussion
of employer satisfaction will be provided in an upcoming consumer reports publication,
which will be available on R&P’s website.
Training Required
A wide variety of training requirements for occupations were reported. Note that
multiple responses for a particular occupation are possible. For instance, many
job descriptions indicate that an Associate’s degree as well as work experience in a
related occupation is required. Just over half of employers (n = 56) reported the
occupation requires licensure or certification, the most frequently occurring response
(see Figure 4). This reflects the fact that a large portion
of graduates are employed as Registered Nurses, positions that require licensure or
certification. On-the-job training was required second most frequently, with about
45 percent of employers reporting this requirement. None of the occupations require
a Master’s or professional degree.
A Bachelor’s degree was reported as a level of training required for 30.4 percent
of the occupations. Given that Casper College is a two-year institution, this result
seems somewhat puzzling. One possible explanation is that for certain types of
positions a Bachelor’s degree may serve in place of experience or other training
for the occupation. A second possible explanation is that graduates of Casper
College may already have the Bachelor’s degree required for the occupation, but
chose to acquire additional or more specialized training through the college. That
a large portion of occupations require a four-year degree despite Casper College
being a two-year institution suggests that many students were incumbent workers, or
were individuals out of the labor force with education or experience from elsewhere,
rather than new labor supply.
Available Supply of Labor
We asked all employers to comment on whether or not they felt that the available
supply of labor was sufficient and skilled for the occupation the graduate was working
in (see Figure 5). Out of all employers, only 38 percent of
survey respondents commented on the labor supply. Because so few employers responded
to the question, the lack of responses suggests that labor supply and skill sufficiency
may not be an issue for most employers. For those who responded to the question,
R&P used content analysis to code responses to reflect the reported comments.
About 48 percent of respondents said they consider the labor supply to be sufficient
and skilled. Another 26.2 percent reported there was not enough skilled labor, while
another 23 percent said there was not enough labor supply in general. A small number
of employers (3.3%) commented that employees were not willing or committed to work.
Summary
The results that we achieved from the survey are very encouraging. Given that
Casper College has typically received only between 12 and 15 percent of responses
from their employer surveys, our employer survey response rate of 87.3 percent
represents a vast improvement. The increased response rate largely represents
R&P’s unique capacity to accurately identify employer contact information
through administrative databases. Acquiring additional survey results from other
colleges, including Northwest College in Powell, and Laramie County Community
College in Cheyenne, who have recently agreed to work with R&P, will add to
the pool of data, and will improve R&P’s ability to broaden the provision of
data on graduates of community colleges overall, and to provide more detailed
descriptions based on occupation, training programs, and more specific industry
data. As more data are collected, trends in the data will be evaluated, providing
an even broader understanding of the long-term impacts of educational institutions
and other training providers.
1 The UI Wage Records database consists of all employers
submitting UI tax records to the Wyoming Department of Employment (DOE), and contains
detailed work behavior information on individuals working for employers that are
required to pay Unemployment taxes. See Tony Glover,
“Enhancing the Quality of Wage Records for Analysis Through Imputation: Part One,”
Wyoming Labor Force Trends,
April 2001.
2 105th Congress,
“Workforce Investment Act of 1998, n.d..
3 Four employers reported they did
not have the person on record as an employee. Potential sources of this problem include
incomplete or incorrect records on the part of the employer, lack of knowledge of the
employee by the person filling out the questionnaire, unwillingness of the employer to
participate in the survey, or incomplete or incorrect UI Wage Records. A fifth response
was invalid because the employer reported once that the employee had worked for them,
but then responded a second time that they had no record of the employee. The first
questionnaire sent to the employer was received after response deadlines had passed.
A second survey was sent to the employer to encourage a response. A comparison of the
two surveys for the same employer and graduate yielded the conflicting responses.
Consequently responses for the employer for the particular graduate were entered
as missing.
4 Administrative databases include Unemployment Insurance
(Wage Records, Claimants, Covered Employment & Wages), driver’s license data,
Employment Services data, higher education databases, etc.
5 See Endnote 2.
6 Finance, Insurance, & Real Estate (FIRE) and Services are
combined to avoid disclosure of confidential information.
7 Employers were requested to report the occupation title and primary
activities of the employee only if the person was still employed by them as of January
12, 2001.
8 U.S. Office of Management and Budget, Standard Occupational
Classification Manual, 2000.
9 Graduates are employed as identified in Unemployment Insurance
Wage Records.
10 The Alien Labor Certification program assumes a 40-hour work
week to convert hourly wages to annual wages. See
General
Administration Letter No. 4-95, n.d. for further discussion.
11 Wyoming Dept. of Employment, Research & Planning, Consumer
Report Draft For Casper College, Sept. 19, 2000, p. 11.
12 Bureau of Labor Statistics, “B-8. Average Weekly Hours of
Production or Nonsupervisory Workers on Private Nonfarm Payroll by Major Industry and
Manufacturing Group, Seasonally Adjusted,” Establishment Data Hours Seasonally Adjusted,
ftp://ftp.bls.gov/pub/special.requests/ee/ceseeb8.txt (May 21, 2001).
13 Wyoming Department of Employment, Research & Planning,
Employee Benefits in Wyoming: 2000.
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