Labor month in review
The
July Review
Location and wages
The high school class of 2002
Education and the working poor
According to the American Automobile Association, 37.4 million people expect to travel 50 miles or more from home the Fourth of July weekend—32.6 million of them by motor vehicle. Given the Department of Transportation’s estimate that the total fleet of passenger cars and light trucks gets an average of just under 25 miles per gallon, we can set a lower bound of about 130 million gallons of gasoline being sold to power one holiday weekend’s worth of highway travel. Thus, Jonathan Weinhagen’s article on gasoline prices is a particularly timely lead for this month’s Review.
Weinhagen develops both historical and econometric evidence to conclude price changes of inputs to gasoline at the pump significantly affect the CPI for gasoline, but changes in aggregate demand have only a marginal impact on retail gasoline prices. Thus, says Weinhagen, “… the majority of the forecast variance in consumer gasoline prices can be explained by price shocks to inputs, as opposed to shocks to demand.”
Paul Paez explores a very detailed set of local data from the Front Range of Colorado to look at the impact of the size of the firm on wages. As has been the case in other studies of firm size and wages, Paez finds that the wage premium in large firms is statistically significant. He also finds that the effect of firm size on entry-level wages may be smaller than other characteristics of the vacancy being filled. Some of these characteristics include experience and education required and the occupation and industry of the job.
Andrew von Nordenflycht and Thomas A. Kochan summarize the way labor negotiations are conducted in the airline industry. They have found that the average length of negotiations, once started, is about 16 months but there is wide variation. The minimum is a bit less than a month; the maximum is more than 4 years. Much of the variation, they add, is due to the particular parties to the negotiations rather than to the regulatory regime or economic conditions.
How much are earnings within an occupation affected by location? For the most part, it seems, not very much. The local wage decile of an occupation exactly matched its national ranking about 35 percent of the time. About 70 percent of the time, local and national ranks were within a single decile of each other.
Relative earnings were especially uniform in occupations with very high or very low earnings. For example, engineering managers matched their high national earnings rank in 99.7 percent of locations studied while dining room and cafeteria attendants and bartender helpers were in the same low rank in 98.7 percent of locations.
Other occupations with very consistent relative wages were chief executives, which matched in 99.5 percent of locations studied; combined food preparation and serving workers, 98.2 percent; pharmacists, 97.9 percent; nuclear engineers, 97.1 percent; dishwashers, 96.9 percent; cashiers, except gaming, 96.7 percent; waiters and waitresses, 96.7 percent; and fast food cooks and counter attendants (cafeteria, food concession, and coffee shop), both 94.4 percent.
To obtain these findings, occupations were ranked by decile for the Nation as a whole and for approximately 390 locations—the top-earning 10 percent of occupations were in the first decile and the lowest earning 10 percent were in the tenth decile. The occupations’ local decile ranks were compared to their national decile ranks. Find out more in "Whereabouts and wealth: A study of local earnings and how they vary" by Alan Lacey and Olivia Crosby, Occupational Outlook Quarterly, Spring 2003.
Among the 2.8 million high school graduates in 2002, 1.8 million (65.2 percent) were enrolled in college the following October. The college enrollment rate of young women (68.4 percent) exceeded that for young men (62.1 percent). The percentage of women attending college following high school graduation has exceeded that of men in almost every year since 1988. White graduates continued to enroll in college in greater proportions (66.7 percent) than either black (58.7 percent) or Hispanic graduates (53.5 percent). Additional information is available from "College Enrollment and Work Activity of 2002 High School Graduates," news release USDL 03–330.
Education and the working poor
The incidence of living in poverty greatly diminishes as workers achieve higher levels of education. In 2001, only 1.5 percent of college graduates were counted among the working poor. This compared with 2.6 percent of workers with associate degrees, 4.4 percent of those with some college but no degree, 5.8 percent of high school graduates with no college, and 13.1 percent of high school dropouts.
At all educational attainment levels other than college graduate, women were more likely than men to be among the working poor. At all educational attainment levels, blacks were more likely to be among the working poor than were whites. For more information see BLS Report 968, A Profile of the Working Poor, 2001 (PDF 327K).
Communications regarding the Monthly Labor Review may be sent to the Editor-in-Chief by e-mail to mlr@bls.gov, by mail at 2 Massachusetts Avenue NE, Room 2850, Washington, DC, 20212, or by fax to (202) 691–7890.
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