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Office of the Chief Actuary 
Measures of Central Tendency for Wage Data 

As indicated in the explanation of the determination of the national average wage index (AWI), the latest annual increase in the "raw" average wages is applied to the last AWI to obtain the next one. Such raw average wages are the average amounts of net compensation (as distinct from total employee compensation) listed in the table below. An average is just one measure of central tendency for any set of data. Another measure is a median. For our wage data, the median wage (or net compensation) is the wage "in the middle." That is, half of the workers earned below this level. The table below shows that the median wage is substantially less than the average wage. The reason for the difference is that the distribution of workers by wage level is highly skewed. 

Average and median net compensation are shown in the graph
below. Also shown is the ratio of median to average amounts. 
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