Category Archives: Compensation

Compensating wage differentials and the impact of health insurance in the public sector on wages and hours

Source: Paige Qin, Michael Chernew, Journal of Health Economics, Volume 38, December 2014
(subscription required)

From the abstract:
This paper examines the trade-off between wages and employer spending on health insurance for public sector workers, and the relationship between coverage and hours worked. Our primary approach compares trends in wages and hours for public employees with and without state/local government provided health insurance using individual-level micro-data from the 1992–2011 CPS. To adjust for differences between insured and uninsured public sector employees, we create a matched sample based on an employee’s propensity to receive health insurance. We assess the relationship between state contribution to the health plan premium, state-level healthcare spending, and the wages and hours of state and local government employees. We find modest reductions in wages are associated with having employer-sponsored health insurance (ESHI), although this effect is not precisely measured. The reduction in wages associated with having ESHI is larger among non-unionized workers. Further, we find little evidence that provision of health insurance increases hours worked.

• We examine the trade-off between wages and health care benefits for public sector workers and the relationship between coverage and hours worked.
• We also assess the relationship between state contribution to the health plan premium, as well as state level health care spending, and the wages and hours of state and local government employees.
• There is weak evidence suggesting that the increased employer costs for health insurance have been shifted back to workers through reductions in wages.

Recent Declines in Labor’s Share in Us Income: A Preliminary Neoclassical Account

Source: Robert Z. Lawrence, National Bureau of Economic Research (NBER), NBER Working Paper No. w21296, June 2015
(subscription required)

From the abstract:
As shown in the 1930s by Hicks and Robinson the elasticity of substitution (σ) is a key parameter that captures whether capital and labor are gross complements or substitutes. Establishing the magnitude of σ is vital, not only for explaining changes in the distribution of income between factors but also for undertaking policy measures to influence it. Several papers have explained the recent decline in labor’s share in income by claiming that σ is greater than one and that there has been capital deepening. This paper presents evidence that refutes these claims. It shows that despite a rise in measured capital-labor ratios, labor-augmenting technical change in the US has been sufficiently rapid that effective capital-labor ratios have actually fallen in the sectors and industries that account for the largest portion of the declining labor share in income since 1980. In combination with estimates that corroborate the consensus in the literature that σ is less than 1, these declines in the effective capital ratio can account for much of the recent fall in labor’s share in US income at both the aggregate and industry level. Paradoxically, these results also suggest that increased capital formation would raise labor’s share in income.

College Police and Security Officer Pay Improving with the Economy

Source: Robin Hattersley Gray, Campus Safety, August 3, 2015

Public safety employee wages are higher than in 2011, but most police and security departments at U.S. institutions of higher education are grossly understaffed. … In 2011, 49 percent of novice sworn police officers on college campuses made more than $35,000 per year, while today, 63 percent make more than that amount. In fact, 9 percent make more than $50,000 per year. For their nonsworn brethren, nearly half (49 percent) who are just starting their careers now make more than $25,000 per year. In 2011, only 40 percent made more than that amount. The median pay rate for nonsworn security/public safety officers has also increased from $23,500 per year in 2011 to $25,000 today. It should be noted, however, that more nonsworn officers are now in the lowest pay bracket compared to four years ago. In 2011, only 11 percent were making $20,000 or less per year. Today, 17 percent make that amount. ….

Sworn Officer Pay
Sworn Officer Benefits

Nonsworn Officer Pay
Nonsworn Officer Benefits

Median Salaries of Other Positions
Police Chief Salary
Median Chief Salary by Student Population

Opinion of Department Staffing Levels
Student-to-Employee Ratios
Percentage of Sworn Officers
Department Gender Diversity
Department Racial Diversity

Weapons Carried by Officers

Payroll Cards Under Pressure: Seven Steps to Stay Out of Trouble

Source: Maureen Minehan, Employment Alert, Vol. 32 no. 12, June 12, 2015
(subscription required)

Intrigued by the idea of paying employees via debit cards? So are legislators around the country. According to the American Payroll Association (APA), seven states have introduced bills to regulate payroll cards just since January, with more expected over the next few months. …. A payroll card is a prepaid debit card used by employers to pay wages to employees. Each payday, a cardholder employee’s wages are deposited electronically into an account at a bank selected by the employer or by the payroll card vendor. The employee can obtain access to the funds in the account by using the payroll card. Similar to a bank-issued debit card, the payroll card can be used to withdraw funds from an ATM, make point-of-sale purchases, and electronically transfer funds, among other functions. …

Pinched by Plastic: The Impact of Payroll Cards on Low-Wage Workers
Source: New York State Attorney General, June 12, 2014

Employers in New York State and nationwide increasingly use payroll cards to pay wages. These cards can lead to numerous benefits for employers and employees, including cost savings for employers and convenience and lowered expenses for those employees who might otherwise use check cashing outlets. Payroll cards can be helpful for delivering wages in inclement weather or a disaster, and paperless payroll also brings environmental benefits. Despite these advantages, payroll cards can present serious problems for employees, especially low-wage or limited English proficient (LEP) workers, and those without internet or smartphone access. Virtually all payroll card programs charge fees for cardrelated activities, and these fees can add up, reducing the meager take-home pay received by the lowest paid workers in the state. In response to requests from the Office of the New York State Attorney General (“OAG”), 38 national and regional employers voluntarily submitted information on their use of payroll cards. A review of their responses revealed:
• Cardholder employees receive insufficient and confusing information about how to obtain their wages without paying a fee. Available information frequently comes in small type buried in a cardholder agreement, instead of as a clear, easyto-read list.
• Many payroll card programs charge fees for common transactions, including ATM use, point-of-sale transactions, and customer service. An overdraft of as little as $5.00 can trigger a fee as high as $25.00 in programs that charge for overdraft service. Employees without internet access can be charged simply to learn their account balance.
• Employers sometimes steer or require workers to receive wages by payroll card. Forty percent of employers surveyed did not provide employees the option to receive their wages through a traditional paper check and another 31% discouraged the selection of a paper check.
• In a subset of employers who provided particularly detailed fee information, three out of four cardholder employees incurred a fee of some kind. In some programs, the average per-employee fees ran as high as $20.00 per month.

Fair Pay For Quality Care: Fair wages for home care workers ensure economic stability and increase continuity of care

Source: Sabine Schoenbach, NC Justice Center’s Workers’ Rights Project, July 2015

From the summary:
North Carolina is rapidly aging – the population over 65 is projected to more than double by 2050. The aging of the state’s baby boomers will correspond with an increase in community members with functional and cognitive limitations, indicating a growing need for direct care that allows community members to continue to live with dignity.

Direct care occupations, including home care jobs, are some of the fastest growing occupations, as North Carolina rapidly ages. Yet these jobs offer some of the lowest wages in the state. Median wages in the caregiving occupations pay less than $10 an hour, compared to the state’s $15 an hour median wage. That means that half of all home healthcare workers aren’t earning enough to rise above the federal poverty line despite working full-time. And despite the high occupational injury rates, almost half of home care workers remain uninsured and the majority of workers have no earned paid sick days to take time to recover from injuries or illness.

Low wages increase worker turnover, increase long-run costs for providers, and interrupt the continuity of care for consumers. Additionally, making too little to pay for the basics such as food, housing, and health care can lead to increased dependence on public assistance programs.

Medicaid, administered by the state and jointly financed by the state and federal government, is the primary funding source for long-term services and supports (LTSS) for people with disabilities and seniors. Reimbursement by Medicaid programs, in large part, creates the framework in which employers set wages for direct care workers.

North Carolina’s reimbursement rates have been frozen or reduced since 2009 and the most recent reduction places North Carolina rates more than $4 per hour lower than the national average rate paid to provider agencies.

To address these challenges North Carolina must raise the wage floor for paid caregivers in the context of the state’s Medicaid program and look to best practices in states like Montana and Maine that tie wage-improvement strategies to reimbursement rates.

These include: An automatic update mechanism, such as a link to an annual inflation-adjustment; A way to ensure enforcement through mandatory reporting and data collection; A built-in mechanism for evaluating reimbursement rates, or the wage floor, over time to ensure that the rate remains competitive.

The State and Local Workforce: Analysis and Forecast

Source: Joshua Franzel, Government Finance Review, Vol. 31 no. 3, June 2015

The challenges of the past decade have required the state and local sector to make many significant adjustments to its workforce. …. Highlighting recent workforce survey findings, this article will provide an overview of the size of the state and local workforce, wage and benefit considerations, and workforce management issues….

Compensation Benchmarking Practices in Large U.S. Local Governments: Results of a National Survey

Source: Michael Thom and Thom Reilly, Public Personnel Management, OnlineFirst, first published on May 18, 2015
(subscription required)

From the abstract:
Growing competition over human capital has reiterated the importance of strategic practices to maintaining a high-quality public sector workforce. But how often does the public sector study pay and benefits among competitive peers? This study presents the findings of a national survey of human resource professionals regarding compensation benchmarking practices. Just over half of respondents indicated they conducted a benchmarking study within the last decade. A majority said their jurisdiction only compares compensation with other public employers, with a smaller number including both public and private competitors. Salaries were the most frequent topic of concern; fringe benefits and paid leave time were less often compared. Several jurisdictions conducted benchmarking studies for purposes other than compensation; about one quarter gathered data for purely informational purposes and 9% carried out a study in anticipation of labor negotiations. A series of best practices for benchmarking studies is offered in conclusion.

A Better Way to Set Public Pay
Source: Thom Reilly, Governing, Voices of the Governing Institute, June 29, 2015

Too few local governments are taking advantage of a valuable tool: benchmarking compensation among their public- and private-sector peers.

Registered nurses have highest employment in healthcare occupations; anesthesiologists earn the most

Source: Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, July 13, 2015

In May 2014, there were 11.8 million workers employed in healthcare practitioner, technical, and support occupations. Among those, 2.7 million were registered nurses, the largest occupation. Anesthesiologists earned the most, with an average annual wage of $246,320.

Compensation inequality: evidence from the National Compensation Survey

Source: Kristen Monaco, Brooks Pierce, U.S. Bureau of Labor Statistics, Monthly Labor Review, July 2015

From the abstract:
Using data from the National Compensation Survey, this article examines compensation inequality measures and trends over the 2007–2014 period. The analysis suggests that inequality measures based on total compensation (i.e., wages plus costs of employer-provided benefits) are higher than measures based solely on wages. It also points to an increase in inequality over the study period—an increase largely driven by a growing compensation gap between high- and low-earning occupations—and considerable intraoccupational inequality.

2014 Statistical Profile on Certified Physician Assistants

Source: National Commission on Certification of Physician Assistants (NCCPA), 2014

There were approximately 74,777 certified PAs at the end of 2009; the profession grew 36.4% over the next 5 years reaching 101,977 certified PAs at the end of 2014.Mississippi and Arkansas experienced the highest percentage growth between 2013 and 2014 (25.0% and 17.8% respectively). … The median age of certified PAs was 38 in 2014. In 1974, 16% of PAs were female (Perry, HB, Physician Assistants: An empirical Analysis of Their General Characteristics, Job Performance, and Job Satisfaction). Today 66.6% of all certified PAs are female….
Income from Physician Assistant Positions by Principal Clinical Position: A Supplement to the 2013 Statistical Profile of Certified Physician Assistants
2013 Statistical Report on Recently Certified Physician Assistants
2013 Statistical Profile on Certified Physician Assistants