Bureau of Labor Statistics
New York Office Internet Address: http://www.bls.gov/ro2/ Media Contact: Michael L. Dolfman,(212) 337-2500 Information: Martin Kohli,(646) 264-3620 FOR RELEASE: March 7, 2008
OCCUPATIONAL PAY RELATIVES FOR
METROPOLITAN AREAS IN NEW YORK, 2006
The pay relative in 2006 averaged across all occupations in
the New York-Northern New Jersey-Long Island Consolidated
Metropolitan Statistical Area1 was 114, meaning that pay on average
was 14 percent above the national average, according to the U.S.
Department of Labor's Bureau of Labor Statistics. Regional
Commissioner Michael L. Dolfman noted that the New York
metropolitan area had the second highest pay relative in the nation
among the 78 metropolitan areas in the National Compensation Survey
(NCS), the source for these data. Only the pay relative for the
San Francisco metropolitan area was higher at 119.
Elsewhere in New York, the pay relative for all occupations in
the Rochester Metropolitan Statistical Area was 97, meaning that
workers earned 3 percent less than the national average. For the
Buffalo-Niagara Falls metropolitan area, the pay relative was 100,
meaning that average pay was not significantly different from that
for the nation. (See charts A and 1.)
BLS produces occupational pay relatives, a calculation of pay
which includes wages, salaries, commissions, and production
bonuses, to facilitate comparisons of occupational pay between
metropolitan areas and the United States as a whole, and between
one metropolitan area and another. Pay relatives have also been
prepared for each of the 9 major occupational groups within 78
Metropolitan Statistical Areas for 2006. The calculation controls
for differences among areas in occupational composition,
establishment and occupational characteristics, and the fact that
data are collected for areas at different times during the year.
Area-to-Nation Comparisons
Workers in the greater New York area had pay relatives that
were significantly above the national average in all nine
occupational groups for which pay relatives were prepared. (See
table A.) Construction and extraction workers in New York earned
28 percent more than their national counterparts with a pay
relative of 128. For management, business, and financial, and
professional and related occupational groups, pay relatives were
114 and 116, respectively.
Workers in the Rochester area were paid significantly less
than the U.S. average in six occupational groups. Two of these
groups had pay relatives of 89-management, business, and financial;
and installation, maintenance, and repair-meaning Rochester area
workers earned 11 percent below their national counterparts in
these occupational groups. Service workers, with a pay relative of
104, was the only occupational group to have a pay relative that
was significantly above the national average.
In the Buffalo-Niagara Falls area, workers posted pay
relatives significantly higher than those for the nation in four
occupational groups (construction and extraction, production,
service, and sales and related), and significantly lower pay in
three (management, business, and financial; professional and
related; and office and administrative support). Pay relatives for
both the construction and extraction and production occupational
groups were 111. Workers in the management, business, and
financial, and the professional and related occupation groups had
pay relatives of 91.
Table A. Pay relatives for major occupational groups in New York, area-to-nation comparisons,
National Compensation Survey, June 2006
__________________________________________________________________________________________________________________
| | | | |
| | Management, | | |
| All | business, and | Professional | | Sales and
Metropolitan area 1/ | occupations | financial | and related | Service | related
| | | | |
____________________________|________________|_________________|________________|________________|________________
| | | | |
United States | 100 | 100 | 100 | 100 | 100
| | | | |
Buffalo- | | | | |
Niagara Falls, N.Y. | 100 | 91* | 91* | 106* | 105*
| | | | |
New York-Northern | | | | |
New Jersey-Long | | | | |
Island, | | | | |
N.Y.-N.J.-Conn.-Pa. | 114* | 114* | 116* | 114* | 112*
| | | | |
Rochester, N.Y. | 97* | 89* | 97* | 104* | 96*
____________________________|________________|_________________|________________|________________|________________
__________________________________________________________________________________________________________________
| | | | |
| Office and | Construction | Installation, | | Transportation
Metropolitan area 1/ | administrative | and | maintenance | Production | and material
| support | extraction | and repair | | moving
| | | | |
____________________________|________________|_________________|________________|________________|________________
| | | | |
United States | 100 | 100 | 100 | 100 | 100
| | | | |
Buffalo- | | | | |
Niagara Falls, N.Y. | 99* | 111* | 100 | 111* | 101
| | | | |
New York-Northern | | | | |
New Jersey-Long | | | | |
Island, | | | | |
N.Y.-N.J.-Conn.-Pa. | 114* | 128* | 114* | 105* | 110*
| | | | |
Rochester, N.Y. | 98* | 94* | 89* | 100 | 100
____________________________|________________|_________________|________________|________________|________________
*A pay relative for this area is significantly different from the average in the metropolitan area at the 10
percent level of significance. For additional details, see the technical note.
1/ A metropolitan area can be a Metropolitan Statistical Area (MSA) or Consolidated Metropolitan Statistical Area
(CMSA) as defined by the Office of Management and Budget, 1994.
Area-to-Area Comparisons
Area-to-area pay comparisons are useful in determining the
differences in pay levels between two metropolitan areas. This
type of comparison requires that the base area be changed from the
nation to a specific metropolitan area. For example, when the
greater New York area was the base area (pay relative = 100),
average pay for all occupational groups in Rochester was lower than
in greater New York by 14 percent, and in Buffalo-Niagara Falls, it
was lower by 12 percent. (See table 1.) Pay relatives for all 78
metropolitan areas are available on the BLS website at
http://www.bls.gov/ncs/ocs/payrel.htm. Using greater New York as a
base for area-to-area comparison allows us to state that the San
Francisco-Oakland-San Jose, Calif., area exceeded greater New York
by 4 percent on average. In contrast, the average pay in the
Dallas-Fort Worth, Texas area was 14 percent less than the greater
New York area.
Using Pay Relative Data
To assist data users with the use of these data, tests have
been conducted to determine whether differences between each pay
relative and the pay relative for the nation as a whole are
statistically significant (that is, the pay for the given
occupation in that area is too different from the national average
to be accounted for by the randomness of the survey's sample).
Similar tests are conducted for the area-to-area comparisons. In
all tables, statistically significant pay relatives are denoted
with an asterisk (*). Data users are cautioned not to use yearly
differences in area and occupational pay group differences in pay
relatives to infer changes in underlying economic conditions.
More information on significance testing is available in the
Technical Note.
Beginning in 2006, the NCS implemented a number of significant
survey changes including imputing for temporary non-response
situations and benchmarking estimated employment. For more details
on these changes, see the article at
http://www.bls.gov/opub/cwc/cm20070122ar01p1.htm.
Technical Note
Pay relative controls and calculations
Pay relatives control for differences among areas in
occupational composition, as well as establishment and occupational
characteristic. Metropolitan areas often differ greatly in the
composition of establishments and occupations that are available to
the local workforce. For example, in Brownsville, Texas, the ratio
of workers in the high-paying management, business, and financial
occupational group to the numbers of workers in all occupations is
under 6 percent, whereas nationally this ratio is over 8 percent.2
In addition to these factors, the NCS collects compensation data
for metropolitan areas at different times during the year. Payroll
reference dates differ between areas which makes direct comparisons
between areas difficult.
The pay relative approach controls for these differences to
isolate the geographic effect on wage determination. To illustrate
the importance of controlling for these effects, consider the
following example. The average pay for professional and related
workers in San Francisco is $37.57 and the average pay for
professional and related workers in the entire United States is
$29.76.3 A simple pay comparison can be calculated from the ratio
of the two average pay levels, multiplied by 100 to express the
comparison as a percentage. The pay comparison in the example is
calculated as:
($37.57 ÷ $29.76) ∗ 100 ≅ 126
This comparison does not control for differences between San
Francisco and the nation in the mix of occupations, industries, and
other factors. A more accurate estimate of the geographic effect of
wages in San Francisco can be obtained by taking these differences
into account. Controlling for differences in occupational
composition, establishment and occupational characteristics, and
the payroll reference date in San Francisco relative to the nation
as the whole, the pay relative for professional and related
occupations in San Francisco is equal to 117.
Sampling errors and statistical significance
Because the NCS is a sample survey, data are subject to
sampling error. For the data presented here, sampling errors are
differences that occur between the pay relatives estimated from the
sample and the true pay relatives derived from the population. It
is important to assess whether differences between each pay
relative and the pay relative for the nation as a whole is likely
to be a result of sampling error or of true differences in pay
levels. To perform this assessment, a test of statistical
significance is conducted.
The test constructs a 90-percent confidence interval that
assumes the given area's true pay relative is equal to the national
average. The confidence interval is constructed so that there is a
90-percent probability the pay relative calculated from any one
sample is contained within the confidence interval. If from a
single sample a calculated pay relative falls within the confidence
interval, then the pay relative is not statistically significant
and the hypothesis that the true pay relative is equal to the
national average is accepted. However, if the pay relative falls
outside of the constructed confidence interval then the pay
relative is statistically significant at the 10-percent level. The
hypothesis that the given area's pay relative is equal to the pay
relative for the nation is rejected and one can conclude with
reasonable confidence that the true pay relative is different from
the national average.
In addition to sampling error, pay relatives are subject to a
variety of sources that can adversely influence the estimates. The
NCS may be unable to obtain information for some establishments;
there may be difficulties with survey definitions; respondents may
be unable to provide correct information, or mistakes in recording
or coding the data may occur. Non-sampling errors of these kinds
were not specifically measured. However, they are expected to be
minimal due to the extensive training of the field economists who
gathered the survey data, computer edits of the data, and detailed
data review.
Historical pay relative data are available for 1992-1996,
1998, 2002, 2004, and 2005. There are several differences between
the recent pay relatives and the pay relatives for earlier years,
including different industry and occupation classification systems,
varying methodology, and different survey designs. These
differences limit comparability. The pay relatives for 2004, 2005,
and 2006 were calculated using the same industry and occupation
classification systems, methodology, and survey design.
Nonetheless, comparisons between the estimates for the two years
should be made only with a high degree of caution.
Pay relatives were estimated using a multivariate regression
technique methodology to control for interarea differences. This
technique controls for the following ten characteristics:
● Occupational type
● Industry type
● Work level
● Full-time / part-time status
● Time / incentive status
● Union / nonunion status
● Ownership type
● Profit / non-profit status
● Establishment employment
● Payroll reference date
Even accounting for the characteristics used in the current
regression analysis, there is still significant wage variation
across the areas. The variation is due to differences in wage
determinants that were not included in the model. Examples of
these determinants include price levels, environmental amenities
such as a pleasant climate, and cultural amenities.
The pay relative regression methodology introduces another
type of error. Regression models are subject to specification
error. The significance test does not specifically measure
specification error. However, care was taken to minimize this form
of error by an extensive search across specifications for the model
that performs best in terms of predictive accuracy.
For more details, see Maury B. Gittleman, "Pay Relatives for
Metropolitan Areas in the U.S." Monthly Labor Review, March 2005,
pp. 46-53, and Parastou Karen Shahpoori, "Pay Relatives for Major
Metropolitan Areas," Compensation and Working Conditions, Spring
2003.
_______________________________
1The New York-Northern New Jersey-Long Island, NY-NJ-CT-PA
Consolidated Metropolitan Statistical Area (CMSA) consists of New
York City, Dutchess, Nassau, Orange, Putman, Rockland, Suffolk, and
Westchester Counties in New York; Bergen, Essex, Hudson, Hunterdon,
Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset,
Sussex, Union, and Warren Counties in New Jersey; Fairfield County,
eight towns in Litchfield County, two towns in Middlesex County,
and New Haven County in Connecticut; and Pike County in
Pennsylvania. For convenience, this area is referred to as the
greater New York area in this release.
2Data for this example are based on the May 2006 Occupational
Employment and Wage Estimates,
http://www.bls.gov/oes/current/oessrcma.htm.
3Average pay for professional workers in San Francisco and for the
United States are based on wage estimates published in the San
Francisco-Oakland-San Jose, CA National Compensation Survey, March
2006 and the National Compensation Survey: Occupational Wages in
the United States, June 2006, http://www.bls.gov/ncs/ocs/compub.htm.
NYLS -7319 Labor - New York
3/05/08
Table 1. Pay relatives for major occupational groups in metropolitan areas in New York, area-to-area comparisons, National Compensation Survey, June 2006
______________________________________________________________________________________________________________________________________________________________
| | | | | | | | | Installa- | | Transpor-
| | |Management,| Pro- | | Sales | Office | Construc- | tion, | | tation
Base area | Metropolitan | All | business, | fessional | Service | and | and | tion | mainten- | Production| and
(Pay relative = 100) | area |occupations| and | and | | related | adminis- | and | ance, | | material
| | | financial | related | | | trative | extraction| and | | moving
| | | | | | | support | | repair | |
_____________________|____________________|___________|___________|___________|_________|_________|___________|___________|___________|___________|___________
| | | | | | | | | | |
|New York-Northern | | | | | | | | | |
| New Jersey-Long | 114* | 125* | 127* | 108* | 107* | 115* | 115* | 114* | 94* | 108*
Buffalo-Niagara | Island, | | | | | | | | | |
Falls, NY | NY-NJ-CT-PA | | | | | | | | | |
| | | | | | | | | | |
|Rochester, NY | 97* | 98* | 107* | 98* | 91* | 99* | 85* | 89* | 90* | 99*
_____________________|____________________|___________|___________|___________|_________|_________|___________|___________|___________|___________|___________
| | | | | | | | | | |
New York-Northern |Buffalo-Niagara | | | | | | | | | |
New Jersey-Long | Falls, NY | 88* | 80* | 79* | 93* | 94* | 87* | 87* | 88* | 106* | 92*
Island, | | | | | | | | | | |
NY-NJ-CT-PA |Rochester, NY | 86* | 78* | 84* | 91* | 86* | 86* | 73* | 78* | 95* | 91*
_____________________|____________________|___________|___________|___________|_________|_________|___________|___________|___________|___________|___________
| | | | | | | | | | |
|Buffalo-Niagara | | | | | | | | | |
| Falls, NY | 103* | 102* | 93* | 102* | 110* | 101* | 118* | 112* | 112* | 101
Rochester, NY | | | | | | | | | | |
|New York-Northern | | | | | | | | | |
| New Jersey-Long | 117* | 128* | 119* | 110* | 117* | 117* | 136* | 128* | 105* | 110*
| Island, | | | | | | | | | |
| NY-NJ-CT-PA | | | | | | | | | |
_____________________|____________________|___________|___________|___________|_________|_________|___________|___________|___________|___________|___________
*A pay relative for this area is significantly different from the average in the metropolitan area at the 10 percent level of significance. For additional
details, see the technical note.
Last Modified Date: March 27, 2008
