Category Archives: Compensation

The Path to Performance Rewards: Perceptions Among Federal Employees on the Promise of Performance Appraisal

Source: Dennis M. Daley, Compensation & Benefits Review, First published online: August 24, 2018
(subscription required)

From the abstract:
Performance rewards are designed to incentivize individuals to obtain productivity. The performance appraisal process represents the organization’s efforts to introduce a formal plan alignment directing individual efforts. Performance appraisal techniques, for example, instrument, accountability, individual goals and priorities and training and development, should be perceived by federal employees as influencing the obtainment of organizational goals through extrinsic rewards. Using data from the 2013 Federal Employee Viewpoint Survey, regression analyses on perceptions of performance rewards are conducted with the performance appraisal process (appraisal fairness and accuracy, accountability for results, designated goals and priorities, feedback and training and development). The performance appraisal fairness and accuracy feedback and training demonstrate moderate effects.

Low Pay Has Teachers Flocking to the Sharing Economy

Source: Alia Wong, The Atlantic, August 17, 2018

One in 10 Airbnb hosts in the U.S. is a teacher, a new report shows.

Airbnb, the popular platform that lets people rent out their homes and apartments, released the results of a volunteer survey this week containing the striking statistic that nearly one in 10 of its hosts in the United States is an educator. In some states the trend appears to be even more pronounced—more than a quarter of all Airbnb hosts in Utah and Wisconsin, for example, work as teachers or in education (the company includes in that category administrators and college professors). This is especially noteworthy given that an analysis of census and National Center for Education Statistics figures suggests that just less than 2 percent of adults in the country work as full-time K–12 teachers.

Many of these 45,000-plus educators in the U.S. are presumably using Airbnb to supplement their regular income, as teachers struggle with stagnant, if not declining, pay. The average annual salary for K–12 public-school teachers is roughly $58,000, and they typically spend a sizable chunk of that on classroom supplies integral to their jobs. Teachers’ frustration with the situation has become so acute that it drove educators en masse to the picket lines in certain parts of the country this past spring.

Women and Men in the Low-Wage Workforce, State by State

Source: National Women’s Law Center, July 20, 2018

Nationwide, women are nearly two-thirds of the nearly 24 million workers in low-wage jobs that typically pay $11.50 per hour or less—and women outnumber men in the low-wage workforce in every state and the District of Columbia. In all but one state (Nevada), women make up at least 60 percent of the low-wage workforce, and women are more than two-thirds of the low-wage workforce in 29 states. View our interactive map to compare women’s and men’s representation in the low-wage workforce in your state.

Regional Price Parities by State and Metro Area

Source: Bureau of Economic Analysis, May 17, 2018

Across states, Hawaii had the highest all items RPP (118.4) and Mississippi had the lowest (86.4). Across large metropolitan areas – those with population greater than two million – San Francisco-Oakland-Hayward, CA had the highest all items RPP (124.7) and Cincinnati, OH-KY-IN (89.6) had the lowest.

What are Regional Price Parities (RPPs)?
Allows comparisons of buying power across the 50 states and the District of Columbia, or from one metro area to another, for a given year. Price levels are expressed as a percentage of the overall national level.

Unions and Nonunion Pay in the United States, 1977-2015

Source: Patrick Denice, Jake Rosenfeld, Sociological Science, August 15, 2018

From the abstract:
We provide the most extensive investigation into the connection between union power and nonunion worker pay to date. Leveraging nearly four decades of Current Population Survey (CPS) data on millions of U.S. workers, we test whether private sector union density, measured at the occupation and occupation region levels, helps raise average wages among unorganized private sector workers. We find stable and substantively large positive effects of private sector union strength on nonunion private sector workers’ wages, especially for men. These results are robust to the inclusion of controls for the risk of automation, offshoring, the related rising demand for skill, overall employment levels, industry, and the strength of public sector unions. Disaggregating the results by occupation reveals positive and substantively large union spillover effects across a range of occupations, including those not transformed by automation, offshoring, or rising skill demands. These disaggregated results also indicate that occupational segregation limits the positive spillover effects from unions to nonunion women workers: in highly organized occupations, nonunion women benefit, but there are comparatively few women in these segments of the labor market.

CEO compensation surged in 2017

Source: Lawrence Mishel and Jessica Schieder, Economic Policy Institute, August 16, 2018

What this report finds: This report looks at trends in chief executive officer (CEO) compensation, using two different measures. The first measure includes stock options realized (in addition to salary, bonuses, restricted stock grants, and long-term incentive payouts). By this measure, in 2017 the average CEO of the 350 largest firms in the U.S. received $18.9 million in compensation, a 17.6 percent increase over 2016. The typical worker’s compensation remained flat, rising a mere 0.3 percent. The 2017 CEO-to-worker compensation ratio of 312-to-1 was far greater than the 20-to-1 ratio in 1965 and more than five times greater than the 58-to-1 ratio in 1989 (although it was lower than the peak ratio of 344-to-1, reached in 2000). The gap between the compensation of CEOs and other very-high-wage earners is also substantial, with the CEOs in large firms earning 5.5 times as much as the average earner in the top 0.1 percent.

The surge in CEO compensation measured with realized stock options was driven by the stock-related components of CEO compensation (stock awards and cashed-in stock options), not by changes in salaries or cash bonuses.

Because the decision to realize, or cash in, stock options tends to fluctuate with current and potential stock market trends (as people tend to cash in their stock options when it is most advantageous to do so), we also look at another measure of CEO compensation, to get a more complete picture of trends in CEO compensation. This measure tracks the value of stock options at the time they are granted. By this measure, CEO compensation rose to $13.3 million in 2017, up from $13.0 million in 2016.

By either measure, CEO compensation is very high relative to the compensation of a typical worker—and an earner in the top 0.1 percent.

CEO compensation has grown far faster than stock prices or corporate profits. CEO compensation rose by 979 percent (based on stock options granted) or 1,070 percent (based on stock options realized) between 1978 and 2017. The corresponding 637 percent growth in the stock market (S & P Index) was far lower. Both measures of compensation are substantially greater than the painfully slow 11.2 percent growth in the typical worker’s compensation over the same period and at least three times as fast as the 308 percent growth of wages for the very highest earners, those in the top 0.1 percent….

The Productivity–Pay Gap

Source: Economic Policy Institute, updated August 2018

Most Americans believe that a rising tide should lift all boats—that as the economy expands, everybody should reap the rewards. And for two-and-a-half decades beginning in the late 1940s, this was how our economy worked. Over this period, the pay (wages and benefits) of typical workers rose in tandem with productivity (how much workers produce per hour). In other words, as the economy became more efficient and expanded, everyday Americans benefited correspondingly through better pay. But in the 1970s, this started to change. ….

Productivity–Pay Tracker Change: 
1973–2017: Productivity +77.0%
Hourly pay +12.4%
Productivity has grown 6.2x more than pay

Amid Legal and Political Uncertainty, DACA Remains More Important Than Ever

Source: Tom K. Wong, Sanaa Abrar, Tom Jawetz, Ignacia Rodriguez Kmec, Patrick O’Shea, Greisa Martinez Rosas, and Philip E. Wolgin, Center for American Progress, August 15, 2018

Note: The survey results can be found here. For more information on the survey, please contact Tom K. Wong.

Since it was first announced on June 15, 2012, the Deferred Action for Childhood Arrivals (DACA) policy has provided work authorization as well as temporary relief from deportation to approximately 822,000 undocumented young people across the United States.

From July 16 to August 7, 2018, Tom K. Wong of the University of California, San Diego; United We Dream; the National Immigration Law Center; and the Center for American Progress fielded a national survey to further analyze the experiences of DACA recipients. The study includes 1,050 DACA recipients in 41 states as well as the District of Columbia.

This research, as with previous surveys, shows that DACA recipients are making significant contributions to the economy and their communities. In all, 96 percent of respondents are currently employed or enrolled in school.

….Several years of data, including this 2018 survey, make clear that DACA is having a positive and significant effect on wages. The average hourly wage of respondents increased by 78 percent since receiving DACA, from $10.32 per hour to $18.42 per hour. Among respondents 25 years and older, the average hourly wage increased by 97 percent since receiving DACA. These higher wages are not only important for recipients and their families but also for tax revenues and economic growth at the local, state, and federal levels…..

US Cities Where Salaries Go Furthest: 2018

Source: Jed Kolko, Indeed, Hiring Lab, August 15, 2018

Money isn’t everything. Local markets with the highest adjusted salaries tend to have higher unemployment and weaker future job prospects.

That tempting big salary might not be all it seems. That’s because places where pay is high tend to be more expensive. Jobs offer a premium in the Bay Area, Boston, Washington and New York. But those extra dollars go right back out to pay for higher rents and pricier meals. Adjusted for living costs, salaries are highest not in the big coastal metros, but in less attention-getting locales like Brownsville, TX, Kingsport, TN, and Huntington, WV.

But before you reserve that one-way U-Haul to take you to Kingsport, know this: places where adjusted salaries are higher often serve up other challenges. They tend to have higher unemployment today and are projected to have slower job growth. If you want it all — high adjusted salaries, low unemployment today and good future prospects — look instead at Duluth, MN, Wilmington, NC, and Lubbock, TX.

And let’s be realistic. You might not want to trek across the country, far from family, friends or weather you love, to a place where jobs in your field are scarce. That’s fine. You can probably move somewhere not too far away with a similar mix of jobs and boost your standard of living at the same time — for example, by relocating from Tampa to Birmingham or from San Diego to Sacramento. Most places have relatively close-by sister cities where adjusted salaries are at least a bit higher.