Bureau of Labor Statistics

1. Bureau of Labor Statistics Current Employment Statistics:New Hours and Earnings SeriesBEA Data Users ConferenceApril 13, 2007Pat Getz, BLS

2. Background The BLS Current Employment Statistics (CES) program historically has published average hours and earnings series for production workers in the goods-producing industries, and nonsupervisory workers in the service-providing industries CES also publishes state and metropolitan area hours and earnings series, but publication is limited almost exclusively to manufacturing industries

3. Background Production and nonsupervisory workers represent about 80 percent of nonfarm wage and salary employees and provide an incomplete picture of average hours and earnings BLS tested collection of all employee hours and earnings data with CES respondents and found the data readily available from payroll records of most employers

4. Reasons for new series CES constantly strives to improve its relevance to the needs of data users New all employee definition will provide more comprehensive information than the present series for analyzing economic trends New data will provide improved input for other major economic indicators productivity personal income

5. Reasons for new series-continued Current concept of ‘production workers’ (PW) has been difficult for sample members and users to comprehend The PW concept is inconsistent across industries (production, nonsupervisory, construction) Sample for PW data has degraded over time individual employers record keeping often does not allow identification of production and nonsupervisory workers as defined by CES Many employers use payroll processing firms or pre-packaged payroll software; production and nonsupervisory identification generally not available

6. New series begin publication in April 2007 Experimental all employees series of average weekly hours (AWH), average hourly earnings (AHE), average overtime hours in manufacturing (AOT), and gross monthly earnings (GME) at the National level Average hours and earnings series for production workers and for all employees are designed to measure the regular earnings for workers They EXCLUDE bonuses and other irregular payments received by employees from their employers Regular hours and earnings are reported for the pay period that includes the 12th of the month For both all-employee and production-worker series

7. New series The GME series INCLUDES irregular payments, providing an additional and more comprehensive measure of earnings for the whole month This series is expected to improve the accuracy of preliminary estimates of personal income in the national income accounts GME will be published with a one-month lag as compared with all other CES series. For example January GME estimates will be published in March.

8. New series The gross monthly earnings series are not strictly comparable with other earnings series: GMEAE-AHEPW-AHE Measurement: comprehensive: regular earnings regular earnings regular plus irregular earnings Published: 1-month lag same month same month as employment as employment (3rd closing) Calendar pay period that pay period that representation: entire month includes the 12th includes the 12th Estimate Coverage: 100 % all nonfarm 100 % all nonfarm PW jobs~ wage and salary jobs wage and salary jobs 80 %

9. New series The hours series are strictly comparable with other hours series: AE-AWHAE-OTPW-AHE PW-OT Measurement: Total hours paid Total hours overtime Total hours paid Total hours overtime including overtime pay was received including overtime pay was received Published: same month same month same month same month as employment* as employment* as employment* as employment* Calendar pay period that pay period that pay period that pay period that representation: includes the 12th includes the 12th includes the 12th includes the 12th Estimate Coverage: 100 % all Private 100 % Manufacturing PW jobs~ Manufacturing PW Nonfarm wage 80 % and salary jobs *1st, 2nd or 3rd closing depending upon industry detail

10. Expectations for AE earnings and GME series: AHE for All workers would generally be higher than for production workers (due to inclusion of supervisory earnings) GME would be equal to or higher than All-employee aggregate payrolls (due to possible inclusion of bonuses, irregular payments, to timing, etc.)

11. AEPP data collection began in September 2005 New forms mailed out in August/September 2005 and again in January 2006 Adding new data items made form more complicated and increased respondent burden

12. AEPP data collection First month data collection was hindered by hurricanes Rita and Katrina occurring in the same month (September 2005) AE payroll response is currently somewhat higher than response of PW payroll If firms were providing PW payroll, then almost all added AE payroll Some firms which did not provide PW payroll now report AE payroll GME response runs lower that AE payroll in general

13. AE Collection Rates: 1st and 3rd ClosingsJanuary 2003 to Present

14. CES Data Item Response Rates, 3-month, final sample average

15. AEPP data collection-continued Rotation of new sample units into sample (~20 percent each year) improves AEPP response as new units have higher item response Meanwhile, BLS will continue to: Explain new data items to respondents Selectively re-contact key reporters

16. GME estimators CES is testing 2 estimators for calculating GME Both National and State GME estimates are being tested using the estimators CES will make a final decision prior to releasing the official series

17. GME estimators Weighted Difference Link and Taper (LT) Estimator Similar to the estimator currently used for all hours and earnings series Ratio Estimator (R1) Similar to the weighted link relative estimator for all employees

18. Phase 1: Experimental Limited data available online in text format only Potential for methodology changes Continued research and evaluation of estimators Continued effort to improve sample response and to reduce response error Solicitation of user comments Phase 2: Official Full release of published estimates with more industry detail Inclusion in Employment Situation, Commissioners Statement, State and Area releases, and available on LABSTAT Publication of seasonally adjusted data Completed documentation available to users • Publication timeline • The publication timeline has been divided into 2 phases: Experimental and Official

19. National publication timeline Experimental series released with January 2007 estimates in April 2007. Series start date is March 2006 Official series with January 2010 estimates in February 2010; will include seasonally adjusted data

20. State and Area publication timeline Experimental series released in March 2008 with January benchmarked data Official series released in 2010 Start date dependent upon sufficient sample and non-disclosure review Series start date will begin no earlier than January 2007

21. National level publication detail Experimental—Total private and expanded supersector detail Official—Similar to series published for PW hours and earnings Initial release—hours for all 3-digit industries in Manufacturing and 2-digits in all other industries; earnings for all 2-digits and higher Second release—same as initial release plus all series that pass non-disclosure rules

22. State and Area level publication detail Experimental— Statewide—Total private and supersector detail for hours and earnings series; gross earnings for total private MSA—Total private detail for hours and earnings; no gross earnings Official—same as experimental with possible additional industry detail, depending on sample adequacy in individual States and MSAs

26. The CES all employee hours and earnings experimental series are now available on the BLS website at: http://www.bls.gov/ces/cesaepp.htm BLS welcomes users review and feedback on these series