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November 1982, Vol. 105, No.
11
A new look at occupational wages
within individual establishments
Robert W. Van Giezen
Re port containing results of occupational wage surveys generally emphasize average earnings of individual jobs. While these types of data are useful to those interested in levels of pay and overall relationships among occupational averages, they do not show occupational pay differentials within individual establishments. For example, according to a Bureau of Labor Statistics report on pay levels in metropolitan areas, janitors averaged $4.87 an hour in July 1980 and tractor-trailer truckdrivers averaged $9.63, or nearly twice as much.1 But, the average pay differential within individual establishments having both janitors and tractor-trailer drivers was only about 30 percent.
Data on internal pay alignments are of special concern to wage and salary administrators, labor-management contract negotiators, and those who develop or analyze internal wage structures. Although not necessarily to the degree indicated by the comparison of janitors and truckdrivers, pay setters may find a conflict between the twin objectives of gearing occupational pay rates to local labor market conditions and, at the same time, maintaining appropriate internal pay structures. Reconciliation of these conflicting objectives can be a major issue in wage and salary administration.2 To satisfy the need for information on internal pay alignments, the Bureau of Labor Statistics now reports average occupational pay relationships within establishments in its Area Wage Survey publications.3 This article presents an analysis of pay relatives for all metropolitan areas combined, and summarizes the within establishment differences among industry divisions, regions, and establishment size groups.4
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1 See Occupational Earnings in All Metropolitan Areas, July 1980, Summary 81-11 (Bureau of Labor Statistics, 1981), p. 3.
2 See E. Robert Livernash, "The Internal Wage Structure," in George W. Taylor and Frank C. Pierson, eds., New Concepts in Wage Determination (New York, McGraw-Hill Book Co., 1957), pp. 155-58.
3 See, for example, tables A-8 to A-11 of Area Wages Survey: Chicago, Ill., Metropolitan Area, March 1982, Bulletin 3015-9
4 All data in this article refer to the 262 Standard Metropolitan Statistical Areas of the United States (excluding Alaska and Hawaii), as defined by the Office of Management and Budget through February 1974. BLS surveys are conducted annually in a sample of 70 areas selected and appropriately weighted to represent all 262 areas. Establishments employing 50 workers or more are surveyed in six broad industry divisions: manufacturing; transportation, communication, and other public utilities; wholesale trade; retail trade; finance, insurance, and real estate; and selected services. In the 13 largest areas, the minimum establishment size is 100 workers in manufacturing: transportation, communications, and other public utilities; and retail trade. Major exclusions from the survey are construction, extractive industries, and government. The regions are defined as follows:
Northeast—Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont;
South—Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia;
North Central—Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin; and
West—Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.
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