Average Hourly Earnings Research Articles

Applications of telemedicine: Plastic surgery in the COVID-19 era

Applications of telemedicine: Plastic surgery in the COVID-19 era

The Quality-Adjusted Cyclical Price of Labor

Typical measures of wages, such as average hourly earnings, fail to capture cyclicality in the effective cost of labor in the presence of (i) cyclical fluctuations in the quality of worker-firm matches, or (ii) wages being smoothed within employment matches. To address both concerns, we estimate cyclicality in labor’s user cost exploiting the longrun wage in a match to control for match quality. Using NLSY data for 1980 to 2019, we identify three channels by which hiring in a recession affects user cost: It lowers the new-hire wage; it lowers wages going forward in the match; but it also results in higher subsequent separations. All totaled, we find that labor’s user cost is highly procyclical, increasing by more than 4% for a 1 pp decline in the unemployment rate. For large recessions, like the Great Recession, that implies a decline in the price of labor of about 15%.

Bayesian Modeling of Labor Earnings in Construction

Labor costs constitute a significant portion of construction costs. Reliable forecasts provide insight into the movements of labor costs and are critical to the success of projects. Past studies have primarily focused on forecasting construction cost indexes or material costs. Only a few studies have concentrated on forecasting construction labor costs. This study presents a multivariate Bayesian structural time series (MBSTS) model to characterize the future values of construction labor’s average hourly earnings (AHE) using a set of candidate predictors. The methodologies commonly used by past studies do not adequately address the uncertainties associated with the modeling process. In contrast, MBSTS recognizes the uncertainty in its modeling process, which enables practitioners to quantify and account for future labor cost risks in decisions. Furthermore, the MBSTS method results in a transparent model, helping analysts investigate the rationality of the parameters. This article trains MBSTS models under four different data subset lengths (i.e., 150, 144, 138, and 132 months) to study the consistency of the explanatory variables and their corresponding coefficients. The analysis results indicate that the gross domestic product (GDP), housing starts (HS), number of building permits (BP), Construction Cost Index (CCI), Dow Jones Industrial Average (DJI), and Standard and Poor’s 500 index (SPI) are the most frequently used predictors in the regression component of the MBSTS models. The results indicate an inverse relationship between AHE from one side and HS and BP from the other. Likewise, a direct relationship exists between AHE and GDP, CCI, DJI, and SPI. The MBSTS model performed well on the validation subset in the midrange prediction intervals (i.e., 12- and 18-month periods). However, it was outperformed by conventional time series models [i.e., seasonal autoregressive integrated moving average (SARIMA)] when used for short-term forecasting. The proposed framework can be applied to facilitate monetary resource allocation in projects.

How do my earnings compare? Pay referents and just earnings

Abstract Comparisons are crucial in shaping evaluations of one’s own position. Following this notion, we investigated the role of historical, financial, partner, occupational, and regional pay referents in predicting the just gross hourly earnings in a representative sample of German workers. Looking at this broad range of pay referents, we find that higher reference earnings were generally associated with higher just earnings. In particular, controlling for actual gross hourly earnings, higher occupational, regional, and partners’ hourly earnings were associated with higher just gross hourly earnings. One’s own pay history, in form of average hourly earnings over the past 10 years, did not shape just earnings. Financial needs on the household level, however, mapped on to higher just earnings and this association was particularly pronounced among men. Overall, occupational and financial referents showed the strongest association with just earnings followed by partner earnings. These findings underscore that, while referents closely related to one’s job (e.g., occupational referents) are important, referents that extend beyond the sphere of work (e.g., regional, financial, and partner referents) are also relevant in shaping ideas of the just reward.

Cyclical signals from the labor market

Abstract We consider which labor market variables are the most informative for estimating and nowcasting the US output gap using a multivariate trend-cycle decomposition. Although the unemployment rate clearly contains important cyclical information, it also appears to reflect more persistent movements related to labor force participation that could distort inferences about the output gap. Instead, we show that the alternative U-2 unemployment rate (job losers as a percentage of the labor force) provides a more purely cyclical indicator of labor market conditions. To a lesser extent, but consistent with a link of the output gap to real labor costs in a New Keynesian setting, we also find that average hourly earnings are informative about the output gap.

What Makes Our Medical Laboratory Workforce Unique?

Abstract Introduction/Objective A career in the medical laboratory requires advanced education and technical training. To assist both employers and employees, several government organizations conduct demographic, education, and wage surveys for the general U.S. labor market. Through its workforce surveys, the American Society of Clinical Pathology (ASCP) does the same for the medical laboratory professions. Our aim was to compare the findings of these surveys and identify similarities and dissimilarities between the general labor pool and the medical laboratory workforce. Methods/Case Report Since the 2021 ASCP Wage survey is currently open, we reviewed the findings described in ASCP’s 2019 Wage Survey of Medical Laboratories in the United States (Am J Clin Pathol 2021;155:649-673) with the publicly available information (for 2019) on demographics, educational attainment, and average hourly earnings available on the websites of U.S. Bureau of Labor Statistics (www.bls.gov) as well as United States Census (www.census.gov). Results (if a Case Study enter NA) In 2019, the male: female ratio was 52.9:47.1 in general labor pool and 19.1:80.9 in the medical laboratory workforce. The average age of a worker in the general labor pool was 41.9 years and was 42 years in the medical laboratory workforce. The average hourly earnings were $27.99/hour in the general labor pool and ranged from $16.64/hour (phlebotomists) to $53.95/hour (pathologists assistants) in the medical laboratory workforce, with the MLS/MT/CLS earning $30.02/hour to $52.53/hour. While 33.1% adults in the U.S. have attained a bachelor’s degree or above, 73.79% have attained this in the medical laboratory workforce. Conclusion Compared to the general labor pool, the medical laboratory workforce is a highly educated workforce and has a higher participation by women. The average worker age and average hourly wage are comparable. We encourage laboratorians to participate in ASCP surveys since such surveys reveal data that can drive better prospects for the medical laboratory workforce.

Time Series Analysis Framework for Forecasting the Construction Labor Costs

This manuscript presents a framework to develop vector error correction (VEC) models applicable to forecasting the short- and long-run movements of the average hourly earnings of construction labor, which is an essential predictor of the construction labor costs. These models characterize the relationship between average hourly earnings and a set of explanatory variables. The framework is applied to develop VEC forecasting models for the average hourly earnings of construction labor in the USA based on the identified variables that govern its movements, such as Global Energy Price Index, Gross Domestic Product, and Personal Consumption Expenditures. More than 150 candidate VEC models were created, of which 25 passed the diagnostics. The most appropriate model was then identified by comparing the prediction performance of these models when applied to the forecasting average hourly earnings over 36-months. The proposed framework and the ensuing models address the need for appropriate models that can forecast the short- and long-run movements of the labor costs. Practitioners can use the proposed framework to develop much-needed forecast models and estimate construction labor costs of the various projects. The insights derived from the development and applications of these models can enhance the chances of project success.

Cyclical Signals from the Labor Market

We consider which labor market variables are the most informative for estimating and now-casting the U.S. output gap using a multivariate trend-cycle decomposition. Although the unemployment rate clearly contains important cyclical information, it also appears to reflect more persistent movements related to labor force participation that could distort inferences about the output gap. Instead, we show that the alternative U-2 unemployment rate (job losers as a percentage of the labor force) provides a more purely cyclical indicator of labor market conditions. To a lesser extent, but consistent with a link of the output gap to real labor costs in a New Keynesian setting, we also find that average hourly earnings are informative about the output gap.

Exploring changes in real average hourly earnings, June 2009 to December 2019

Exploring changes in real average hourly earnings, June 2009 to December 2019

How Aggregation Matters for Measured Wage Growth

Wage growth is often measured by the change in average hourly earnings (AHE), a gauge of overall wages that aggregates information on earnings and hours worked across individuals. A close look at this aggregation method demonstrates that AHE growth reflects disproportionately the profile of high-earning workers who typically display lower and less cyclically sensitive wage growth. Using data from the Current Population Survey (CPS), we adopt a different aggregation method and compute wage growth as the average of individuals’ wage growth. The analysis indicates that the CPS measure of average wage growth is significantly higher than AHE growth and that it displays a more meaningful nonlinear relationship with the Congressional Budget Office’s unemployment gap. Last, our findings do not support the claim that there is still hidden labor market slack restraining wage growth.

EXCHANGE RATE AND US MACROECONOMY: EVIDENCE FROM THE FACTOR-AUGMENTED VECTOR AUTOREGRESSIVE MODEL

This paper aims to examine the macroeffects of exchange rate movements on a wide array of real economic variables in the US in a unifying model. By employing the non-linear factor-augmented vector autoregressive (FAVAR) model with simulation methods, we could trace the effects of exchange rate appreciation and depreciation on a wide array of macroeconomic variables through the impulse response function (IRF). The main findings are: (1) In response to dollar depreciation, import price index (IMP), producer price index (PPI) and CPI increase significantly. The pass-through ratio declines along the distribution chain. (2) Merchandise trade balance, current account balance and output improve facing dollar depreciation. (3) Savings decreases in response to dollar depreciation. (4) Employment and average hourly earnings increase in times of exchange rate depreciation and vice versa. The effects on macroeconomy from appreciation and depreciation seem symmetric. Many other interesting findings are also documented.

PREDICTION OF GDP BASED ON THE LAG ECONOMIC INDICATORS

There are several institutions that constantly announce their predictions of general domestic product (GDP) and lots of institutions that use this information. Frequently the forecasts of different institutions vary because they use different methods, but all the institutions for which this indicator is relevant cannot make the predictions themselves because the models are too sophisticated. The main purpose of this research is to create simple enough but also accurate model for prediction of Lithuanian GDP that can be used by all the institutions that need this indicator. The research is based on the economic data that are measured and published quarterly or monthly by Statistics Lithuania. 154 economic indicators were analysed as possible independent variables for regression model creation. The analysis showed that the regression model with twelve lag independent variables can be quite accurate for a short-term prediction of Lithuanian GDP. It can be forecasted by such indexes as the number of immigrants, the turnover of wholesale and retail trade and repair of motor vehicles and motorcycles, the number of overnight stays in the accommodation establishments, an average hourly earnings, the rate of change in the producer prices of all the industry (except construction) of Lithuanian market, the imports and seasonally adjusted imports, the seasonally adjusted exports, the projected number of employees in the trade enterprises for the next 2–3 months, the industrial production (of all the industry except construction). DOI: http://dx.doi.org/10.5755/j01.ee.26.2.7003

Assessing the predictive power of labour-market indicators of inflation

This article examines two different measures of wages as predicators of prices in a Vector Error-Correction (VEC) framework using quarterly data for the United States for the period from 1947Q1 to 2008Q1. Based on cointegration and a series of exogeneity tests, it is found that (i) there is a stable, long-run relationship between the Consumer Price Index (CPI) and the Personal Consumption Expenditures Deflator (PCED) on the one hand and Unit Labour Cost (ULC) and Average Hourly Earnings per Unit of Output (AHE) on the other; (ii) ULC is weakly exogenous for both price indices while the two price indices are weakly exogenous for AHE; (iii) ULC is strongly exogenous for CPI but not for AHE; and (iv) ULC is super exogenous for CPI. Taken together, these findings lead to the conclusion that ULC is a reliable indicator of price inflation but productivity-adjusted hourly earnings is not. Thus, monetary policymakers are justified in using information about the behaviour of ULC in formulating policy actions for achieving the goal of price stability.

School-Entry Policies and Skill Accumulation Across Directly and Indirectly Affected Individuals

During the past half-century, there has been a trend toward increasing the minimum age a child must reach before entering school in the United States. States have accomplished this by moving the school-entry cutoff date earlier in the school year. The evidence presented in this paper shows that these law changes increased human capital accumulation and hence adult wages. Backing up the cutoff by one month increases average male hourly earnings by approximately 0.6 percent. The evidence also suggests that the majority of the cohort benefits from backing up the cutoff, not just those who must delay entry.

Education and Inequality: Introduction

Disparities in educational opportunities and attainments contribute a great deal to social and economic inequalities in the UK and other developed countries. First, it is well known that educational attainments are strongly positively related to employment rates and to pay. For example, among persons aged 25–59 in the UK, about 89 per cent of university graduates were employed in 2009 compared to 78 per cent of those whose highest qualifications were classified to Level 2 of the National Vocational Qualifications (NVQ) framework. At the same time average gross hourly earnings for 25–59 year old graduates in employment were roughly 80 per cent higher than for people in the same age group with NVQ Level 2 qualifications.

Incentive pay: Productivity, sorting, and adjacent rents

I model and empirically test the hypothesis that higher-quality workers prefer performance pay to time-rate based pay because they realize rent upon two different dimensions: Explicit and implicit rents. First, higher-quality workers are outright more productive than their lower-quality counterparts, earning them explicit rent ( Curme and Stefanec, 2007). Second, these same factors of production facilitate the unobserved heterogeneity for incentive workers, earning them implicit rent because they can produce a given level of output with less effort. I find strong empirical evidence to confirm that these implicit rents exist and I measure them at 1.5–3.4 percent of average real hourly earnings.

The Effects of Patient Function and Dependence on Costs of Care in Alzheimer's Disease

To estimate incremental effects of patients' dependence and function on costs of care during the early stages of Alzheimer's disease (AD) and to compare strengths of their relationships with different cost components. Multicenter, cross-sectional, observational study. Three university hospitals in the United States. One hundred seventy-nine community-living patients with probable AD, with modified Mini-Mental State Examination scores of 30 or higher. Patients' dependence was measured using the Dependence Scale (DS). Functional capacity was measured using the Blessed Dementia Rating Scale (BDRS). Total cost was measured by summing direct medical costs and informal costs. Direct medical costs included costs of hospitalization, outpatient treatment and procedures, assistive devices, and medications. Informal costs were estimated from time spent helping with basic and instrumental activities of daily living for up to three caregivers per patient using national average hourly earnings as wage rate. DS and BDRS were associated with higher total cost; a 1-point increase in DS was associated with a $1,832 increase in total cost, and a 1-point increase in BDRS was associated with a $3,333 increase. Examining component costs separately identified potential differences between DS and BDRS. A 1-point increase in BDRS was associated with a $1,406 increase in direct medical cost. A 1-point increase in DS was associated with a $1,690 increase in informal cost. Patients' dependence and function related differently to direct medical and informal cost, suggesting that measures of function and dependence provided unique information for explaining variations in cost of care for patients with AD, highlighting the value in measuring both constructs.

NEW EVIDENCE ON REAL WAGE CYCLICALITY WITHIN EMPLOYER–EMPLOYEE MATCHES

ABSTRACTIn the most thorough study to date on wage cyclicality among job stayers, Devereux's (2001) analysis of men in the Panel Study of Income Dynamics (PSID) produced two puzzling findings: (1) the real wages of salaried workers are noncyclical, and (2) wage cyclicality among hourly workers differs between two alternative wage measures. We examine these puzzles with additional evidence from other sources. Devereux's finding of noncyclical real wages among salaried job stayers is not replicated in the National Longitudinal Survey of Youth (NLSY) data. The NLSY data, however, do corroborate his finding of a discrepancy for hourly workers between the cyclicality of the two alternative wage measures. Evidence from the PSID Validation Study contradicts Devereux's conjecture that the discrepancy might be due to a procyclical bias from measurement error in average hourly earnings. Evidence from the Bureau of Labor Statistics establishment survey supports his hypothesis that overtime work accounts for part (but not all) of the discrepancy. We conclude that job stayers' real average hourly earnings are substantially procyclical and that an important portion of that procyclicality probably is due to compensation beyond base wages.

Econospinning: how to read between the lines when the media manipulate the numbers

Preface. Acknowledgments. Chapter 1: Eldercare Fraud. Chapter 2: Two Ways to Measure Employment. Chapter 3: Bush League Economics. Chapter 4: Long-Term Unemployment Myths. Chapter 5: The Case of the Phantom Dropouts. Chapter 6: Participation Rate Follies. Chapter 7: What Does the Employment-Population Ratio Tell Us? Chapter 8: May Average Hourly Earnings Rest in Peace. Chapter 9: Hourly Compensation and the Unemployment Rate. Chapter 10: Wages and Productivity. Chapter 11: The Record Profit Boom That Never Happened. Chapter 12: End the Monthly Madness: The Change in Payroll Employment Data. Chapter 13: End the Monthly Madness: The Unemployment Rate. Chapter 14: Greenspan Idolatry. Chapter 15: Best-Selling Myths: Freakonomics. Chapter 16:Best-Selling Myths: Nickel and Dimed. Chapter 17: Dobbs and Jobs. Afterword. Notes. Index.

The labor market consequences of experience in self-employment

Many public policies are designed to encourage self-employment. However, because self-employment experiences are typically brief, it becomes important to understand the long-term consequences of entering and then leaving self-employment. Using the Panel Study of Income Dynamics (PSID), we examine the effects of brief self-employment experience on subsequent labor market outcomes. We find that, relative to continued wage employment, brief spells in self-employment do not increase—and probably actually reduce—average hourly earnings upon return to wage employment. We also find that those who experience self-employment have difficulty returning to the wage sector. However, these consequences are small compared to similar experiences in unemployment.