OLMIS

by Barbara E Peniston
Published Jun-23-2009

At a Glance Wage Distribution by Broad Industry Detailed Industry Distributions Low-Wage Industries Average-Wage Industries High-Wage Industries Summary Describing Distribution

According to the report Oregon Covered Employment and Wages, the average annual wage of private-sector, covered jobs - jobs covered by unemployment insurance - was $39,177 in 2007. The spread around that figure, however, was considerable: the average by major industry group ranged from about $16,000 in leisure and hospitality to $61,000 in information.

But averages only tell part of the story. Information's average was more than 150 percent of that for all private industries, but - because of its small headcount - it doled out less than four percent of total private payroll. Trends within industries can also be misleading. For example, a handful of very highly paid workers can distort the average wage of an industry, driving it up even if most workers are not compensated so well. In short, average wages alone don't shed much light on the distribution of workers' pay.

Of the nearly two million wage records reported by Oregon's private employers during the second quarter of 2008, one-quarter had an average wage of less than $10 per hour, while 17 percent had an average wage of $30 per hour or more (Graph 1). Between these extremes, about 42 percent of jobs paid between $10 and $20 per hour while 16 percent paid between $20 and $30.

Graph 2 shows the hourly wage distribution of Oregon's private industries by broad sector. On the low end of the scale, about 58 percent of all wage records in the leisure and hospitality industry had an average wage of less than $10 per hour. About 40 percent of records for retail trade fell below $10 per hour, as did 51 percent of records in natural resources and mining.

On the high end of the scale, more than one-third of all wage records in the information industry had an average wage of $30 per hour or more. Other sectors with significant portions of records in the $30 or more category were wholesale trade (26%), construction (26%), and educational and health services (25%).

Large shares of records point to the wages earned by a majority of workers in an industry. Don't forget, though, that jobs at all wage levels are held across all industries. Fast growth in a high-wage industry, for example, may not be as positive a trend as it seems if the industry is actually adding lower-wage jobs.

Graph 3 shows the wage distribution for some of the largest private industries in finer detail. In food services and drinking places - part of the leisure and hospitality sector - nearly 62 percent of all wage records had an average wage of less than $10 per hour. Just under a quarter, 24 percent, paid less than $8 per hour.

Another service sector, administrative and support services, had 37 percent of its records at less than $10 per hour in the second quarter 2008. On the other hand, 48 percent of all wage records in the hospital industry had an average wage of $30 per hour or more; 66 percent had a wage of $20 per hour or more. Obviously, not all service industry jobs pay low wages.

Construction is represented in the graph by specialty trade contractors. Ninety-five percent of jobs in the industry paid at least $10 per hour - about 44 percent paid between $10 and $20 per hour, and 51 percent paid $20 per hour or more.

Food and beverage stores are classified in the retail trade sector. Roughly half (48.6%) of all wage records in this industry had an hourly wage of less than $10.

One of the state's largest manufacturing industries, computer and electronic product manufacturing, saw much higher hourly wages. In this very specialized industry, more than three-quarters of all wage records paid $20 or more per hour; more than half (57.3%) paid $30 or more.

Across all private industries, about one-quarter of records had an associated wage of less than $10 per hour. Graph 4 shows the industries with the largest fractions of records at the low end of the wage spectrum.

At the top of the list is sporting goods, hobby, book, and music stores, with about 82 percent of this industry's wage records lower than $10 per hour. Not far behind is religious, grant making, civic, professional, and similar organizations, with 68 percent of all its wage records paying less than $10 per hour. In addition to sporting goods, hobby, book, and music stores, several other industries within retail trade have large fractions of wage records below $10 per hour. These include miscellaneous store retailers, general merchandise stores, and gasoline stations. Crop production and support activities for agriculture and forestry also had large shares of low-wage records.

Graph 5 lists industries with the largest fraction of wage records between $10 and $29.99 per hour. Across all private industries, nearly 58 percent of all wage records fall in this range. Construction of buildings had the highest fraction of mid-wage jobs among all private industries in Oregon, 100 percent. Three industries in the manufacturing sector (furniture and related product manufacturing, chemical manufacturing, and paper manufacturing)and the hospitals industry make up a large portion of the group. Sectors in transportation and warehousing, financial activities, and natural resources and mining rounded out the group.

A final group of industries had large fractions of wage records with hourly pay of $30 or more (Graph 6). The utilities industry tops the list, with nearly 60 percent of all records having wages of $30 per hour or more. Two other industries in the transportation and warehousing sector - transit and ground passenger transportation and support activities for transportation - are also in the high-wage group. The manufacturing sector was represented in the high-wage group by the electrical equipment, appliance, and component manufacturing industry, with 53 percent of all of this industry's records having wages of at least $30 per hour. Three industries in the financial activities sector made the list, as nearly 50 percent of all jobs in the lessors of nonfinancial intangible assets industry and about 40 percent of those in credit intermediation and real estate had a wage of $30 per hour or more. Finally, industries in the wholesale trade, leisure and hospitality and education and health services sector were also represented in the high-wage group.

The hourly wage distribution varies considerably across an array of Oregon industries. Across all industries, one-quarter of all UI wage records were for jobs paying less than $10 per hour, 58 percent were for jobs paying between $10 and $29.99 per hour, and 17 percent were in jobs paying $30 per hour or more.While there is a relatively large share of low-wage jobs in the food services and drinking places industry, the UI wage file data suggest that high-wage opportunities exist even in this low-wage industry.Similarly, high-wage industries such as manufacturing also have low-wage jobs in certain sub-sectors.

What fraction of Oregon's private-sector workers earn less than $10 per hour? Fifty or more dollars per hour? Which industries have the largest percentage of low-, average-, or high-wage jobs?

A different data set can help answer questions like these. Unemployment Insurance (UI) wage records for Oregon's two million covered jobs point to a diverse distribution of hourly wages across private industries. However, the wage records differ from those of the Quarterly Census of Employment and Wages (QCEW), which are used to calculate average wages reported in Oregon Covered Employment and Wages. Whereas the UI wage records include data for all covered employees who earned wages at any time during a quarter, QCEW records only include covered workers paid for the period which includes the 12^th of the month. So, the wage records are not a point-in-time measure and may be influenced by churn in the labor market. Assuming that most churning occurs in low-wage jobs, UI wage records overstate the number and fraction employed in low-wage jobs at any given time.