Rankings of Full-Time Occupations, by Annual Earnings, July 2004
by John E. Buckley
Bureau of Labor Statistics

Originally Posted: November 30, 2005

In July 2004, annual pay averaged $38,494 for full-time workers in private industry and State and local governments, according to data from the BLS National Compensation Survey (NCS). Physicians and airplane pilots and navigators topped the list of 427 occupations ranked by earnings, with average earnings of $128,689 and $128,406, respectively. The average annual earnings of these two occupations were not significantly different from those of the next three highest paid occupations--medical science teachers, judges, and optometrists. Due to the relatively high standard errors for these five occupations, users should exercise caution when making direct salary comparisons. (See table 1.)

These NCS results are based on findings of establishment-based surveys in a sample of 152 metropolitan and nonmetropolitan areas. The sample represents the Nation’s 326 metropolitan statistical areas (as defined by the Office of Management and Budget in 1994) and the remaining portions of the 50 States. Agricultural, private household, and Federal Government workers are not included in the National Compensation Survey.¹

High-paying occupations

Top 10 percent. Of the 43 occupations with annual earnings in the top 10 percent, 32 were in the professional major occupational group, 8 were in the executive group, 2 were in sales (securities and financial services sales occupations and sales engineers), and 1 was in the service group (firefighting supervisors). Of the 32 professional occupations, 10 were college or university teachers, with average annual earnings ranging from $121,230 for medical science teachers to $68,694 for English teachers. Workers in 5 of these 10 teaching positions had average annual earnings of at least $77,509. (Table 2 shows the highest and lowest paying occupations within each major occupational group.)

Top 20 percent. The 86 occupations in the top 20 percent of the earnings array were dominated by positions in the professional and executive major occupational groups. (See table 1.) However, workers from other major groups begin to appear in these high-earnings deciles. For example, the precision production major group had 5 occupations ranked in the top 20 percent, with oil well drillers taking the 62nd spot and supervisory electricians and power transmission installers ranked 66th. Real estate sales workers and mining, manufacturing, and wholesale sales representatives also were in the top 20 percent (ranked 57th and 86th, respectively), as were police and detective supervisors (58th) from the service group. (See appendix A for an alphabetical index of the 427 occupations in table 1.)

Low-paying occupations

Bottom 10 percent. Average annual earnings ranged from $22,317 to $8,789 for full-time workers in occupations at the bottom 10 percent of the wage ladder. About one-third of these 43 lowest paying positions were in the service major occupational group. The remaining two-thirds were mostly accounted for by the following major groups: administrative support, machine operators, handlers, and sales occupations. The low annual earnings for waiters and waitresses ($8,789) in the service group may be misleading because the NCS does not include tips as part of wages. As a result, earnings for waiters and waitresses may be understated. Assistants to waiters and waitresses were ranked 426th, with average annual earnings of $12,432. (Rates for some other low-ranked occupations, such as bartenders, baggage porters and bellhops, parking lot attendants, and taxicab drivers and chauffeurs, were similarly affected by the absence of information on tips.)

Earnings dispersion

Average annual earnings varied considerably within and among major occupational groups. The following tabulation highlights the percentage spreads within each of the nine major occupational groups.²

The large spreads for professional and service jobs reflect the disparate jobs classified within these two major occupational groups. Substitute teachers, for example, are professional workers, but their average earnings are among the lowest, regardless of occupational group. When their earnings are compared with those of the highest ranked professional job (physicians) a wide gap is produced. Similarly, the large gap for the service group results when earnings of high-paid firefighting supervisors are compared with those of the lowest paid service occupation, waiters and waitresses. As noted previously, earnings for wait staff do not include tips. If the data for waiters and waitresses are excluded from the calculations, the earnings spread for the service group drops from 681 percent to 452 percent.

When the earnings estimates for the other (nonservice) occupational groups were recalculated to compare the average earnings of the highest paid occupation with the average earnings of the second lowest paid occupation in the group, the gap narrowed dramatically for the professional category (from 767 to 353 percent) and in the executive group (from 418 to 136 percent). Gaps for the remaining groups narrowed more moderately.

In addition to publishing annual salaries, the NCS publishes hourly wage rates for the occupations presented in this article. Ranking occupations by hourly rates produces some rather significant positional changes from the annual earnings rankings. Table 3 shows the rankings for the 25 highest paid occupations, in terms of both annual and hourly earnings. Physicians, who were ranked first in annual earnings, drop to 6th position when ranked on an hourly basis, which is below airplane pilots and navigators, economics teachers, law teachers, optometrists, and judges.

The annual-versus-hourly rankings particularly affect teaching occupations, where salaries are based on a contract year that generally requires several hundred fewer work hours annually than most full-time workers. Five teaching occupations are in the top 25 in terms of annual earnings positions. When the same occupations are ranked by hourly earnings, 12 appear in the top 25. Among the more noticeable shifts were theology teachers, moving from 67th place in the annual earnings ranking to 22nd place in the hourly ranking; computer science teachers (51st to 20th); and business, commerce, and marketing teachers (50th to 21st). All of the 12 high-paid college level teaching occupations moved up in rank when the hourly scale is used, with the exception of medical science teachers, who dropped from 3rd place in the annual array to 9th place in the hourly array. This drop reflects the 2,276 average annual hours reported for medical science teachers.

The average weekly work hours (39.3) of full-time college teachers are close to the average for all full-time workers (39.6). The shorter average annual work hours (1,602) for this group reflect a shorter work year (about 41 weeks). The work year for teachers below the college level (1,438 hours) reflects a combination of shorter average workweek (36.7 hours) and shorter work year (39 weeks).

The NCS classifies employees as working either a full-time or a part-time schedule based on the definition used by each establishment. Therefore, a worker with a 35-hour workweek might be considered a full-time employee in one establishment, but a part-time employee in another firm, where a 40-hour workweek is the minimum full-time schedule.

BLS collects data on earnings and associated hours directly from employers--either through a personal interview or by telephone. Employers provide the appropriate hours information by accounting for all the duties of the occupation. The collection of hours data is more difficult for some occupations than for others, and in some cases an estimate must be accepted. In addition to flight hours, which are highly regulated and carefully recorded, airline pilots spend time preparing for flights. In the case of elementary and secondary school teachers, hours of work include preparation time, administrative time, and professional days. For college and university professors, research time and office hours are included with class time in the total number of hours worked.

Reliability of the data

The data in this article are estimates from a scientifically selected, probability sample. There are two types of errors possible in an estimate based on a sample survey, sampling and nonsampling.

Sampling errors occur because observations come only from a sample and not from an entire population. The sample used for the National Compensation Survey is one of a number of possible samples of the same size that could have been selected using the sample design. Estimates derived from different samples yield different results.

A measure of the variation among these differing estimates is called the standard error or sampling error. The standard error indicates the precision with which an estimate from a particular sample approximates the average result of all possible samples. The relative standard error is the standard error divided by the estimate. Table 1 includes the relative standard errors for all of the occupations in the table.

The standard error can be used to calculate a "confidence interval" around a sample estimate. As an example, the mean annual earnings for physicians were $128,689, with a relative standard error of 12.5 percent. At the 90-percent level, the confidence interval for this estimate is $102,227 to $155,151.³ If all possible samples were selected to estimate the population value, the interval from each sample would include the true population value approximately 90 percent of the time. Because of the substantial sizes of the relative standard errors of some of the earnings estimates presented in this article, readers are advised to view the rankings with caution.

Nonsampling errors also affect survey results. They can stem from many sources, such as inability to obtain information for some establishments, difficulties with survey definitions, inability of the respondents to provide correct information, or mistakes in recording or coding the data obtained. In addition, estimates are accepted when exact data elements are not available and the respondent is confident that the estimates are reasonable (hours worked by teachers, for example). Although the nonsampling errors are not specifically measured, they are expected to be minimal due to the extensive training of the field economists who gather the survey data by personal visit or by telephone, computer edits of the data, and detailed data review.

The major occupational groups

The NCS classifies workers according to the Occupation Classification System, which is based on the 1990 Census of Population. BLS is in the process of switching to the 2000 Standard Occupational Classification (SOC) system, and the NCS expects to publish SOC-based data in 2006.

Following is a brief description of the nine major occupational groups, the types of occupations included in each group, and a general description of the duties and skills required to fill the positions:

Professional specialty and technical occupations. This major occupational group includes occupations concerned with the study, application, and/or administration of physical, mathematical, scientific, engineering, architectural, social, medical, legal statute, biological, behavioral, library, and/or religious laws, principles, practices, or theories. Some occupations are concerned with interpreting, informing, expressing, or promoting ideas, products, and so forth by written, artistic, sound, or physical mediums. Certain occupations that provide support in these fields are included in the professional group. Most professional occupations require educational preparation.⁴

Executive, administrative, and managerial occupations. Managers plan, organize, direct, and control the major functions of an industrial, commercial, or governmental establishment or department through subordinates who are at the managerial or supervisory level. Managers make decisions and establish objectives for the department or establishment; they are generally not directly concerned with the fabrication of products or with the provision of services. They possess knowledge of the day-to-day operation of the organization, but do not necessarily have the detailed knowledge required of a first-line supervisor. Most managers are classified in this major occupational group.

In the case of small establishments or departments, employees who plan, organize, direct, or control major functions may also perform functions normally assigned to supervisors, such as supervising lower level employees. These employees are classified as managers. This group also includes management-related workers who implement the establishment functions in support of management at the operational level. Examples of these specialized functions are analyzing financial records and policies, reviewing organizational structures and methods, purchasing goods for internal organizational use, and enforcing standards and regulations.

Sales. The sales major occupational group includes occupations concerned with the selling of goods and services or property, purchasing goods and services for resale, or conducting wholesale and retail business. Sales representatives or agents and sales workers require knowledge of the goods or services sold, along with the ability to demonstrate product or products, receive payments, and perform other sales-related activities. Supervisors who coordinate the activities of workers who buy and sell goods and services are included in this group. Sales clerks and cashiers who are primarily concerned with receiving and disbursing funds and require no special product knowledge are also included in this group.

Administrative support occupations, including clerical. This major occupational group includes all of the broad groups of occupations performing activities relating to preparing, transcribing, systematizing, and preserving written communications and records; collecting accounts; gathering and distributing information; operating office machines and electronic data processing equipment; storing, distributing, and accounting for stores of materials; operating telephone switchboards, distributing mail, and delivering messages; and performing other administrative and clerical support.

Precision production, craft, and repair. This group includes occupations involved in the fabricating, processing, inspecting, or repairing of material, products, or structural units. Incumbents must have a thorough and comprehensive knowledge of processes involved in their work, usually acquired through apprenticeship or intensive training. Workers must exercise considerable independent judgment and must usually display a high degree of manual dexterity. Helpers are excluded from this major occupational group, unless specifically included. However, apprentices who are learning a craft or trade through on-the-job training and a formal apprenticeship training program are included, unless specifically excluded.

Machine operators, assemblers, and inspectors. Workers in this major occupational group set up and operate machinery, perform repetitive manual or machine operations, or tend and control machines as part of a fairly well-defined work routine in which some independent judgment or skill may be required.

Transportation and material moving occupations. This major occupational group covers workers concerned with activities that are in immediate support of the operation and performance of transportation vehicles used to transport people or material. It includes workers involved in the operation of material moving equipment that is stationary or has limited range. It also includes the supervisors of these workers.

Handlers, equipment cleaners, helpers, and laborers. Workers in this major occupational group perform unskilled, simple duties, primarily manual, that may be learned within a short period of time and that require little or no independent judgment. These occupations ordinarily require little or no previous experience. Duties may require moderate to strenuous physical exertion.

Service occupations, except private households. This major occupational group includes occupations concerned with preparing and serving food and drinks in commercial, institutional, or other establishments, providing lodging and related services, providing grooming, cosmetic, and other personal and health care services for children and adults, providing protection for people and property, attending to the comfort or requests of patrons of amusement and recreation facilities, and performing cleaning and maintenance services to interiors of buildings. Workers in these occupations provide personal and protective services to individuals and commercial entities.

John E. Buckley
Economist, Division of Compensation Data Analysis and Planning, Bureau of Labor Statistics.
Telephone: (202) 691-6299; E-mail: Buckley.John@bls.gov

Notes

1 For more information on the scope of the National Compensation Surveys, see the technical note in National Compensation Survey: Occupational Wages in the United States, July 2004, Bulletin 2576 (Bureau of Labor Statistics, September 2005), Appendix A, pp. 151-54; available on the Internet at http://www.bls.gov/ncs/ocs/sp/ncbl0757.pdf. The NCS website also provides comprehensive results from the 2004 survey.

2 The spreads are calculated by dividing the rate for the highest paying occupation by the lowest paying occupation within a major occupational group, multiplying the result by 100, and subtracting 100. For example, the percent spread for the professional group is calculated as follows: $128,689/14,841 = 8.67; (8.67 x 100) - 100 = 767 percent.

3 The confidence interval for physicians is calculated as follows: $128,689 plus or minus 1.645 times 12.5 percent of the mean [that is, 1.645 x .125 x $128,689 = $26,462]; ($128,689 + $26,462 = $155,151; $128,689 - $26,462 = $102,227).

4 The National Compensation Survey excludes individuals who set their own pay because their pay may not reflect market forces. These individuals may be owners, owner-managers, or bona fide partners. Physicians, lawyers, and accountants who set their own pay, or have a major influence in doing so, are typical examples of excluded individuals.