Category Archives: Compensation

Executive Excess 2007

Source: Sarah Anderson, John Cavanagh, Chuck Collins, Sam Pizzigati, Institute for Policy Studies, and Mike Lapham, United for a Fair Economy, August 29, 2007

From press release:
With leading Presidential candidates turning up the heat on overpaid CEOs, a new report from the Institute for Policy Studies and United for a Fair Economy documents for the first time the extreme pay gaps that have opened up not just between U.S. business leaders and American workers, but between U.S. business leaders and leaders elsewhere in American — and European — society. CEOs of large U.S. companies last year averaged $10.8 million in total compensation, over 364 times the pay of the average U.S. worker, a calculation based on data from an Associated Press survey of 386 Fortune 500 companies. The top 20 private equity and hedge fund managers, pocketed an average $657.5 million, Forbes magazine estimates. That’s 22,255 times the pay of an average U.S. worker. Workers on the bottom rung of the economy have just received their first federal minimum wage increase in a decade. But the inflation-adjusted value of the new minimum, despite the hike, stands 7 percent below the minimum wage level a decade ago. CEO pay, in that decade, has increased over inflation by roughly 45 percent.

Foreign-Born Wage and Salary Workers in the US Labor Force and Unions

Source: Chuncui Velma Fan and Jeanne Batalova, Migration Policy Institute, August 2007

Labor unions have departed from their historical skepticism of immigrant workers as the overall number of wage and salary immigrant workers and their proportion in the labor unions have increased. Instead, labor unions have become an important force in support of proimmigrant policies.

This Spotlight looks at the available data on immigrant workers and unions, highlighting variations in union representation rates of immigrant workers across industrial sectors.

U.S.: Household Income Rises, Poverty Rate Declines, Number of Uninsured Up

Source: U.S. Census Bureau, CB07-120, August 28, 2007

From the news release:
Real median household income in the United States climbed between 2005 and 2006, reaching $48,200, according to a report released today by the U.S. Census Bureau. This is the second consecutive year that income has risen. Meanwhile, the nation’s official poverty rate declined for the first time this decade, from 12.6 percent in 2005 to 12.3 percent in 2006. There were 36.5 million people in poverty in 2006, not statistically different from 2005. The number of people without health insurance coverage rose from 44.8 million (15.3 percent) in 2005 to 47 million (15.8 percent) in 2006. These findings are contained in the Income, Poverty, and Health Insurance Coverage in the United States: 2006 report. The data were compiled from information collected in the 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC). Much more summary material in this news release.

Related from the Census Bureau:
• Numerous Documents and Tables Can Be Accessed Here
Income, Earnings and Poverty in the United States: 2006

Other related items:
Number And Percentage Of Americans Who Are Uninsured Climbs Again: Poverty Edges Down But Remains Higher, And Median Income For Working-Age Households Remains Lower, Than When Recession Hit Bottom In 2001
Source: Center on Budget and Policy Priorities, August 28, 2007
More Americans, Including More Children, Now Lack Health Insurance
Source: Center on Budget and Policy Priorities, August 28, 2007
U.S. Uninsured Rate Climbs Again
Source: Daniel C. Vock, Stateline.org, August 29, 2007
Number of Uninsured U.S. Residents Increases by 2.2M to 47M in 2006
Source: Kaiser Daily Health Policy Report, August 29, 2007

Keeping Score: A comparison of pay-for-performance programs among commercial insurers

Source: PricewaterhouseCoopers’ Health Research Institute, 2007

It is impossible to improve what cannot be measured or to measure what hasn’t been defined. Take, for example, the topic of healthcare quality. Everyone wants quality, but everyone’s keeping score differently. This conundrum was described in some detail in The Quality Conundrum, a book developed and distributed in 2007 by PricewaterhouseCoopers’ Health Research Institute (HRI). It explores practical approaches to improving the quality of patient care from the perspective of patients, physicians, payers, and employers.

One of these approaches is pay-for-performance (P4P), which attempts to define, measure, and reward quality. This represents a radical departure from traditional payment methods, which pay providers the same regardless of differences in quality. P4P has gained traction, largely because the Centers for Medicare and Medicaid Services (CMS) has told hospitals and physicians that future increases in payment will be linked to improvements in clinical performance. Commercial health plans are also responding to employers’ demands for quality improvement by developing “scorecards” that use quality metrics to grade care provided by hospitals and physicians. By tying providers’ scores to financial payments, non-financial rewards, and public reporting, both private and public payers intend to incent improvements in quality of care and outcomes.

The most mature P4P programs are more than 10 years old. However, among payers interviewed for this report, P4P programs are still evolving. As they’ve blossomed, providers have faced a host of new and varied reporting requirements-what some call a “virtual soup of different metrics.” This has caused some to question the value of P4P and whether the results are worth the administrative burden.
See also:
Pay-for-Performance: Will the Latest Payment Trend Improve Care?
Source: Meredith B. Rosenthal, R. Adams Dudley, JAMA: Journal of the American Medical Association, Vol. 297 No. 7, February 21, 2007 (subscription required)

Push For Merit-Based Teacher Pay Heats Up

Source: Hays Daily News, 8/26/2007

OKLAHOMA CITY (AP) — A merit-based teacher salary plan proposed by Republican state lawmakers could cause teachers’ paychecks to vary dramatically depending on how well their students perform in the classroom.

Supporters say tying teacher pay to performance will lead to increased accountability and more innovation and effort in the classroom. But opponents say teachers would be forced to compete instead of collaborate. And tying raises or bonuses to student test scores is not the best measure of what constitutes a good teacher, many say.

1995 – 2005: Foreign-Born Latinos Make Progress on Wages

Source: Rakesh Kochhar, Pew Hispanic Center, August 21, 2007

Foreign-born Latino workers made notable progress between 1995 and 2005 when ranked by hourly wage. The proportion of foreign-born Latino workers in the lowest quintile of the wage distribution decreased to 36% from 42% while many workers moved into the middle quintiles, according to a new analysis of Census Bureau data by the Pew Hispanic Center.

Newly arrived Hispanic workers also were much less likely to be low-wage earners in 2005 than in 1995, in part because they were older, better educated and more likely to be employed in construction than in agriculture. Yet despite the clear movement into the middle range of the wage distribution, many foreign-born Latinos remain low-wage earners. Even though the share of Latino workers at the low end decreased, in absolute numbers this population grew by 1.2 million between 1995 and 2005.

Foreign-born workers in general did well during that time period, though there were significant differences among them. While Latino workers moved out of the low end of the wage distribution and into the middle, Asians significantly boosted their presence in the high-wage workforce.

Coming Up Short: Resurrection Health Care’s Distorted Pay Priorities

Source: Council 31, American Federation of State, County and Municipal Employees (AFSCME), July 2007

From press release:
Council 31 of the American Federation of State, County and Municipal Employees (AFSCME) have issued a new report documenting low wage levels that keep patient-support staff art Resurrection Health Care hospitals mired in poverty and unable to support their families. Resurrection Health Care (RHC) is the second largest non-profit hospital system in the Chicago metropolitan area. It encompasses eight hospitals, as well as nursing homes, home health services, and outpatient clinics.

Entitled Coming Up Short: Resurrection Health Care’s Distorted Pay Priorities, the report depicts a starkly skewed pay structure in which the compensation of RHC hospital executives significantly exceeds national norms while the meager wages of patient-support staff (housekeepers, laundry and food service workers) fall far short of self-sufficiency standards in the Chicago area.

Hike in Federal Minimum Wage Has Minimal Impact in Most States

Source: CCH/Wolters Kluwer, July 19, 2007

Workers in most states will not be affected by the upcoming increase in the federal minimum wage to $5.85, according to CCH, a leading provider of human resources information and software and part of Wolters Kluwer Law & Business (hr.cch.com). CCH has been reporting on federal wage and hour law since the enactment of the first federal minimum wage in 1938. That’s because 32 states and the District of Columbia have minimum wages higher than the new federal level.

“Over the last ten years, while the federal minimum wage has been steady at $5.15 per hour, more and more states have set their minimum wages above that, and above the new minimum as well,” said Barbara O’Dell, JD, CCH workplace analyst.
+ Timeline of federal minimum wage rates 1938-2009

Correctional Officers: Hiring Requirements and Wages

Source: Corrections Compendium, Vol. 32 no. 3, May/June 2007

In a similar survey Corrections Compendium conducted early in 2004, 43 percent of the respondents in U.S. correctional systems noted that they experienced problems in recruiting qualified candidates for correctional officer positions. The current survey indicated that little has changed. Forty-four U.S. correctional systems and four Canadian systems responded to the survey, with 44 percent of them experiencing problems in recruitment. … The systems were asked to state the wage range paid to their correctional officers at entry level, after the first year of service, and for captains or their equivalent. The minimum starting wage in New Jersey is $45,549. Wages at the top of the entry level category were reported by Wisconsin as $50,759, Colorado as $52,368 and Nevada as $53,390.

2007 Total Compensation Benchmarking Survey

Source: International Public Management Association for Human Resources, May 2007

The focus of this survey is variable pay—what types of practices are government agencies utilizing to affect their workforces and how effective are these practices? Some highlights from the survey include:

• More than three-quarters of all organizations have a defined pay philosophy
• Most organizations use the traditional grade and step systems although a significant number are using other systems
• Three quarters of respondents offer uniform allowances
• Hiring bonuses are more common at the federal level than at the city or county level
• Less than half of respondents use variable pay
• Of those that do, pay for performance is the most common
• There is a strong correlation between funding levels and the perceived success of the variable pay program
• Fifteen percent of organizations utilize broadbanding
• Thirteen respondents have a gainsharing program in place.
+ Press Release