Wages in Alaska Technical Notes
Occupational Employment and Wage Statistics (OEWS) Wage Data
Wages for the OEWS survey are straight-time, gross pay, exclusive of premium pay. No distinction is made between union and nonunion wages. Base rate, cost-of-living allowances, guaranteed pay, hazardous-duty pay, incentive pay including commissions and production bonuses, tips, and on-call pay are included. Excluded are back pay, jury duty pay, overtime pay, severance pay, shift differentials, nonproduction bonuses, and tuition reimbursements.
Both private and public (government) employers are represented in the survey. Self-employed workers are not covered by this survey.
The OEWS survey collects wage data from employers who report the number of employees in an occupation and their exact hourly or annual wage.
Standard Occupational Classification System (SOC)
The OEWS survey uses the SOC occupational classification system. The SOC system categorizes over 800 occupations into 23 major occupational groups.
The major groups of the SOC system are as follows:
- Architecture and Engineering Occupations
- Arts, Design, Entertainment, Sports, and Media Occupations
- Building and Grounds Cleaning and Maintenance Occupations
- Business and Financial Operations Occupations
- Community and Social Services Occupations
- Computer and Mathematical Occupations
- Construction and Extraction Occupations
- Education, Training, and Library Occupations
- Farming, Fishing, and Forestry Occupations
- Food Preparation and Serving Related Occupations
- Healthcare Practitioners and Technical Occupations
- Healthcare Support Occupations
- Installation, Maintenance, and Repair Occupations
- Legal Occupations
- Life, Physical, and Social Science Occupations
- Management Occupations
- Military Specific Occupations (not collected in OEWS)
- Office and Administrative Support Occupations
- Personal Care and Service Occupations
- Production Occupations
- Protective Service Occupations
- Sales and Related Occupations
- Transportation and Material Moving Occupations
Industry Classification
The OEWS survey uses the North American Industry Classification System (NAICS) as the basis for industry classification. NAICS was implemented in the OEWS survey in November 2002.
The NAICS system, developed jointly by the U.S., Mexico, and Canada, groups establishments into industries based on the activities in which they are primarily engaged. It is a comprehensive system covering the entire field of economic activity, goods-producing and non-goods-producing. There are 20 “super” sectors in NAICS encompassing 1,170 more detailed industries.
Alaska’s Unemployment Insurance (UI) files provide the universe from which the OEWS survey draws its sample. The employment benchmarks are obtained from reports submitted by employers to the UI program. In some nonmanufacturing industries, supplemental sources are used for establishments not reporting to the UI program. The OEWS survey sample is stratified by area, industry, and employment size.
Size classes are defined as follows:
| Size Class | Number Of Employees |
|---|---|
| 1 | 1 to 4 |
| 2 | 5 to 9 |
| 3 | 10 to 19 |
| 4 | 20 to 49 |
| 5 | 50 to 99 |
| 6 | 100 to 249 |
| 7 | 250 and above |
UI reporting units with 250 or more employees are sampled with virtual certainty across a 3-year period.
Estimation Methodology
The OEWS survey is a semiannual mail survey measuring occupational employment and wage rates for wage and salary workers in nonfarm establishments. The reference periods are May and November of each year. The OEWS survey is designed to produce estimates using six panels (3 years) of data. The May 2023 estimates for the OEWS survey are based on data collected from establishments in November 2020, May and November 2021, May and November 2022 and May 2023. Combining data improves reliability of estimates as it takes advantage of a larger sample base. Significant reductions in sampling errors can be achieved by taking advantage of prior cycles of survey data collected.
Wage updating:
Significant reductions in sampling errors are obtained by combining six panels of data, particularly for small geographic areas and occupations. Wages for the current panel need no adjustment. However, wages in the five previous panels need to be updated to the current panel's reference period. The OEWS program uses the U. S. Bureau of Labor Statistics (BLS) Employment Cost Index (ECI) to adjust survey data from prior panels before combining them with the current panel’s data. The wage updating procedure adjusts each detailed occupation's wage rate, as measured in the earlier panel, according to the average movement of its broader occupational division. The procedure assumes that there are no major differences by geography, industry, or detailed occupation within the occupational division. This may, or may not, be the case.
Imputation:
Approximately 20 percent of establishments do not respond for a given panel. A donor pool typically consisting of 10 nearest neighbor responding establishments is used to predict data for each unobserved establishment; if 10 donors are not available, then as few as 5 can be used. Donors are matched to recipients based on detailed industry, geographic area, ownership, size, and survey panel. Within a given donor pool, donors that are more similar to the unobserved establishment are given more weight in determining the modeled data.
Wage Definitions
Mean Wage:
This is the estimated total wages for an occupation divided by its weighted survey employment. It is sometimes referred to as the "weighted average." These wage data are published as either an hourly or annual wage.
Mean Hourly Wage:
For each occupation, respondents are asked to report the number of employees paid within specific wage intervals. The intervals are defined both as hourly rates and the corresponding annual rates. The annual rates are calculated by multiplying the hourly wage rate for the interval by the typical work year of 2,080 hours. In reporting, the respondent can reference either the hourly or the annual rate, but is instructed to report the hourly rate for part-time workers.
Mean Annual Wage:
Workers in some occupations are paid an annual salary, but typically do not work a standard 52-week, 2,080 hours per year schedule. Since the survey does not collect the actual hours worked, the hourly rate cannot be calculated with a reasonable degree of confidence from the annual wages. For this reason, the annual salary is directly calculated from reported survey data and only annual wage estimates are reported for these occupations. Occupations such as these include musical and entertainment occupations, pilots and flight attendants, and teachers.
Median Wage:
The median wage is the value of the "middle" observation when the numbers are arranged from the smallest to largest. At that point, one-half of the employees in the occupation earn more and one-half earn less. The median wage is the same as the 50th percentile wages.
Percentile Wages include the 10th, 25th, median, 75th, and 90th percentile:
This measure of wage is calculated by ranking workers in an occupation from lowest paid to highest paid. Then, it is easy to determine the wage where a certain percentage of workers make this amount or less. For example, at the 10th percentile wage, ten percent of all wage earners in that occupation make that wage or less. Similarly, at the 90th percentile, 90 percent of all wage earners in that occupation make that wage or less, and conversely, 10 percent make more than that wage. An often used measure of wage is the Median Wage, which is the 50th percentile wage. At the median wage, one-half of all workers make less than the indicated amount, while the other one-half earn more.