Statistics Corner: BLS Releases New Hours, Earnings Measures

By Robert Parker

On April 6, the Bureau of Labor Statistics (BLS) began the release of new measures of hours and hourly earnings for March 2006 to January 2007. The measures include national estimates of all employee average weekly hours paid, average hourly earnings (regular pay), and gross monthly earnings (both regular and irregular pay). There also is a new measure for employee average weekly overtime hours for all manufacturing employees. The new measures are collected as part of the monthly Current Employment Statistics (CES) survey program.

Considered “experimental” by BLS, the new measures are available on the CES section of the BLS website.  For the remainder of 2007, only final estimates will be released, i.e., the new measures will lag the estimates in the employment situation report release by two months.  BLS will consider speeding up the release next year.  Also, the new series will be published for only 14 industry sectors and will not be seasonally adjusted.  Estimates of the new measures for states and metropolitan areas are scheduled for release in March 2008.

The CES program currently publishes series on the average weekly hours and hourly earnings of only production workers in the goods-producing industries and nonsupervisory workers in the service-providing industries. These measures cover about 80 percent of the employees in private nonfarm industries and the new measures cover all employees in these industries.

New Measures Cover Broader Employee Groups, Types of Pay

The new measure of gross monthly earnings not only covers production and nonsupervisory workers, but also covers both the regular earnings and bonuses and other irregular payments received by employees from their employers. Thus, the new measures will provide estimates for all employees of both regular and total earnings. However, the new measure of regular hourly earnings of all employees will be for the payperiod that includes the 12th of the month, as is the current average hourly earnings measure, whereas the new measure of total or gross earnings will be for the entire month.

Although BLS has been collecting data for the new measures since 2005, the agency will continue to consider them experimental until it is certain of their reliability and it has a time series long enough to develop seasonal adjustment factors.  (This treatment is similar to the way that BLS treated the chained consumer price index measures, which were first released as experimental series in 1997 and then added as official series to the CPI news release in 2002.)

In addition, BLS currently plans to discontinue publication of the production and nonsupervisory worker hours and earnings series in early 2010, after the new measures are well established.  Once these series are discontinued, BLS will eliminate the corresponding questions from the monthly CES survey.

Employers Find Broader Category Easier to Report

In its research on the collection of the all employee measures, BLS learned that respondents were finding it increasingly difficult to adhere to the definitions of production and nonsupervisory workers.  Many respondents said these categories were not meaningful and reported that it was not possible to tabulate their payroll records based on these definitions.  At the same time, when BLS tested the collection of all employee hours and earnings data with CES respondents, it found these data were available from the payroll records of most employers.

NABE supported the need for these new measures. (See “Statistics Corner” of NABE News of Jan/Feb 2005.) The new measures will provide more relevant information for the analysis of economic trends because the current measures are limited to production and nonsupervisory workers. In addition, the new measure of hours will provide improved source data for BLS to use in the preparation of productivity estimates and the new measure of earnings will provide improved source data for the Bureau of Economic Analysis in its preparation of wage estimates for gross domestic product and personal income.

Additional information on the development of the new measures will appear in the “Focus on Statistics” article in the April 2007 issue of Business Economics.