AFSCME Information Highway

Source: John Schmitt, Center for Economic and Policy Research, May 2008

From the summary:
A new report from CEPR shows that union membership increases the wages of all workers, with low-wage workers seeing the largest gains.

This report uses national data from 2003 to 2007 to show that unionization raises the wages of the typical low-wage worker (one in the 10th percentile) by 20.6 percent compared to 13.7 percent for the typical medium wage worker (one in the 50th percentile), 6.1 percent for the typical high-wage worker (one in the 90th percentile). The paper also produces results for the 50 states and the District of Columbia. Throughout the states, a similar pattern holds, with unionization raising the wages of the lowest-wage workers the most.

See also:
Press release

Posted by Info Center at 5:38 PM in Compensation | Labor Unions | Permalink

Source: State Health Access Data Assistance Center, University of Minnesota, April 2008

From the summary:
This article reveals how the cost of family health insurance nationwide is increasing dramatically for employees without anywhere near an equivalent increase in family income. If this trend continues, more workers are likely to become uninsured because of the expense.

Key Findings:

• The amount workers pay for family coverage nationwide has increased by 30 percent from $8,281 in 2001 to $10,728 in 2005.
• Employee income has increased by only 3 percent in the same time period.
• The average cost employers pay for their share of family coverage has increased by 28 percent from $6,360 to $8,143.

Seventy-six percent of insured individuals in the United States receive health insurance from their own or a family member's employer. It follows that the more employees and employers have to pay for that insurance, the more likely workers are to join the ranks of the uninsured. Risa Lavizzo-Mourey, M.D., M.B.A, president and CEO of the Robert Wood Johnson Foundation stated in a press release, "This study makes plain what every working parent knows--that providing insurance coverage takes a bigger bite from the family budget every year."

Posted by Info Center at 3:42 PM in Benefits | Compensation | Health Care | Permalink

Source: American Association of University Professors, March-April 2008

For many years now, colleges and universities have attempted to balance competing demands from students, legislators, and society at large. Students are enrolling in record numbers, legislators and employers are demanding greater skill levels from graduates, and higher education is increasingly being called on to do the work of economic development; at the same time, the share of institutional funding provided by state and federal governments continues to decline. Given these competing pressures on institutions, financial decision making has become a matter of determining priorities. In this year's report, we call into question the apparent priorities demonstrated by trends in relative spending on salaries for faculty, football coaches, and senior administrators and by the shifts in staffing that have reshaped colleges and universities so dramatically over recent decades.

Posted by Info Center at 3:33 PM in Compensation | Education | Permalink

Source: Office of Personnel Management, December 2007

From press release:
The U.S. Office of Personnel Management (OPM) has released a 2007 status report on performance-based pay systems within the federal government, which currently support over 298,000 federal employees. The report, Alternative Personnel Systems in the Federal Government - A Status Report on Demonstration Projects and Other Performance-Based Pay Systems, includes information based on agency data, evaluations and studies, and it demonstrates performance-based pay systems "work."

"This report shows performance-based pay systems drive improvements in managing performance, recruiting and retaining quality employees, and achieving results-oriented performance cultures," said OPM Director Linda M. Springer.

The report also includes profiles of demonstration projects currently operating under OPM authority, as well as independent and executive pay systems where employee pay is linked to performance.

Posted by Info Center at 5:29 PM in Compensation | Permalink

Source: U.S. Securities and Exchange Commission

From the press release:
Securities and Exchange Commission Chairman Christopher Cox today launched the first-ever online tool that enables investors to easily and instantly compare what 500 of the largest American companies are paying their top executives. The new database highlights the power of interactive data to transform financial disclosure.

The Executive Compensation Reader - available today on the SEC's Web site at http://www.sec.gov/xbrl - builds on the Commission's new requirements that went into effect earlier this year to dramatically enhance clarity and completeness of executive compensation disclosure.
...
By tagging the executive compensation figures in XBRL, the computer language of interactive data, the SEC has created a new online tool to help investors more efficiently view Summary Compensation Tables and certain other data in the proxy statements of large companies. Investors can quickly glimpse the total annual pay as well as dollar amounts for salary, bonus, stock, options and company perks. They can instantly compare those executive compensation figures with other companies by sorting according to industry or size.

The SEC's new Web tool includes information in XBRL for 500 large companies that have filed proxy statements with the Commission. The new tool includes direct links to companies' proxy statements, including footnotes and the companies' explanation of their compensation decisions.

Posted by Info Center at 11:42 AM in Compensation | Permalink

Source: RAND Corporation

Enhancing the performance of the civil service has been a central objective of the United States since the Civil Service Reform Act of 1978 authorized a performance-based component to federal salary structures. In 2003, the National Commission on the Public Service, also known as the Volcker Commission, recommended that explicit pay-for-performance (PFP) systems be adopted more broadly throughout the federal government. The authors compare several proposals aimed at enhancing the role of PFP in the federal government: a White House proposal (the Working for America Act), which recommends that the entire federal workforce be converted to PFP systems by 2010; and three bills in the 110th Congress. This occasional paper examines the advantages and pitfalls of explicit PFP schemes compared with the largely seniority-based salary system that still covers more than half of federal civil servants. The authors consider why using PFP in the public sector is challenging, what can be learned from the social science literature, recent practical experience, and growing congressional opposition to PFP.

Summary (PDF; 115 KB)
Full Document (PDF; 350 KB)
See also: Policy Insight, Volume 1, Issue 6, December 2007 -- Pay for Performance

Posted by Info Center at 12:03 PM in Compensation | Permalink

Source: Bureau of Labor Statistics

The National Compensation Survey (NCS) provides comprehensive measures of occupational earnings, compensation cost trends, benefit incidence, and detailed benefit provisions. This bulletin presents estimates of occupational pay for the nation. These national estimates originate from the NCS locality survey data and are weighted to represent the nation as a whole. Data for more than one-half of the 152 individual NCS localities used for national estimates have been previously published.

Posted by Info Center at 2:26 PM in Compensation | Permalink

Source: National Association of Social Workers, 2007

As with any profession, there are a number of factors that are commonly associated with higher earnings. The study found that social work salaries were highly variable.

This report highlights the role of salary in retaining professional workers, particularly newer workers. Of particular concern is the relationship between low salaries and agencies that are likely to provide services to the most vulnerable clients-- underscoring a long-held belief that social workers' salaries are closely linked to the societal value placed on their clients. Competitive and fair salaries are the first step to assuring that a competent social work workforce is going to be available to meet the needs of agencies and their clients in the coming decades.

Posted by Info Center at 4:43 PM in Compensation | Social Services | Permalink

Source: Bureau of Labor Statistics, Issues in Labor Statistics, Summary 07-07, August 2007

For people working in investment banking, especially those in and around Wall Street, it's hard to deny that late 2005 and early 2006 was very, very good to them. With steady employment totals, very handsome bonuses being handed out in fourth quarter 2005, and even larger ones awarded in first quarter 2006, it would seem to be an understatement to say that investment banking was thriving. In first quarter 2006, private sector investment banking and securities dealing recorded average weekly wages of $8,367, well above that of any industry with the exception of the other Wall Street bonus giant, securities brokerage. The investment banking industry's quarterly total wages ranged from $6 billion to $18.9 billion in late 2005 and early 2006 and the industry's average weekly wage was nearly 10 times the national average.

Within this industry a small number of counties accounted for a large proportion of the wages. Five counties were responsible for 71.8 percent of total wages in investment banking during the first quarter of 2006. Fairfield, Connecticut, New York, San Francisco, Los Angeles, and Cook County, Illinois, combined for wages of $13.5 billion from January through March 2006. During this time, 38.3 percent of March employment in investment banking was within these five counties.

Posted by Info Center at 1:44 PM in Compensation | Permalink

Source: PA Times, Vol. 30 no. 9, September, 2007

Salaries for state-employed professionals registered modest to health increases from 2006 to 2007, although most state employees still earn far less than their private sector counterparts, according to the 2007 AFT Public Employees Compensation Survey, the only national survey that tracks such trends. The median increase in average salaries across the 45 jobs surveyed was 5.7 percent from 2006 to 2007, the highest increase recorded in the last five years, the AFT study shows. ... Across all 45 occupations, the collective-bargaining advantage averages about 14 percent.

Posted by Info Center at 5:52 PM in Compensation | Public Sector | Permalink

Source: U.S. Bureau of Labor Statistics, USDL 07-1455, September 26, 2007

Average pay in the San Francisco metropolitan area was 19 percent above the national average in 2006, the highest among the 78 metropolitan areas studied by the National Compensation Survey (NCS), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. In contrast, pay was lowest in the Brownsville, Texas metropolitan area with a pay relative of 78, meaning Brownsville workers earned an average of 78 cents for every dollar earned by workers nationwide. Using data from the NCS, pay relatives-a means of assessing pay differences-are available for each of the 9 major occupational groups within 78 metropolitan areas, as well as averaged across all occupations for each area.

Posted by Info Center at 2:52 PM in Compensation | Permalink

Source: David G. Blanchflower and Alex Bryson, Institute for the Study of Labor, IZA DP No. 3055, September 2007

This paper draws attention to an increase in the size of the union membership wage premium in the UK public sector relative to the private sector. We find the public sector membership wage premium is approximately double that in the private sector controlling for a full range of individual, job and workplace characteristics. Using data from the Labour Force Surveys of 1993-2006 the gap between the membership premium in the public and private sectors closes with the addition of three digit occupational controls, although significant wage premia remain in both sectors.

However, using data from the Workplace Employment Relations Survey of 2004, the public sector union membership wage premium remains roughly twice the size of the private sector membership premium having accounted for workplace fixed effects, workers' occupations, their job characteristics, qualifications and worker demographics. Furthermore, the membership wage premium among workers covered by collective bargaining is only apparent in the public sector.

Posted by Info Center at 2:10 PM in Compensation | Labor Unions | Permalink

Source: Kansas City Star, August 26, 2007
(subscription required)

Alaska is the only state that pays its governor more money than its highest-paid coach. Of course, Alaska doesn't have college football.

In most states, the top-ranking official is paid significantly less. Here is a list of each state's governor and his or her salary (GOV), the highest-paid coach from a state-funded school (HPC) and the highest-paid football coach (HPFC), if he's not his state's highest-paid coach overall.

Posted by Info Center at 2:09 PM in Compensation | Elected Officials | Permalink

Source: Pauline Vu, Stateline.org, October 09, 2007

The controversial idea of paying teachers based not on how long they've been teaching but on how much their students learn got a boost when a key congressman recently proposed adding pay-for-performance money for teachers in high-poverty schools to the next version of the federal No Child Left Behind education law.

Posted by Info Center at 2:27 PM in Compensation | Education | Permalink

Source: Darin Lee, Nicholas G. Rupp, Journal of Labor Economics, Volume 25, Number 4, October 2007
(subscription required)

Since the days of Henry Ford, employers have argued that higher pay induces employees to provide additional effort. While the converse is also thought to be true, there is little empirical evidence testing this hypothesis. Not only are significant company-wide pay cuts rarely observed in practice but measures of employee effort are typically difficult to quantify. This article examines the effort responses of U.S. commercial airline pilots following a recent series of large, permanent pay cuts. Using airline on-time performance as proxy for unobservable pilot effort, we find only limited support for the hypothesis that pay cuts lower employee effort.

Posted by Info Center at 1:52 PM in Compensation | Permalink

Source: American Library Association, press release, August 28, 2007

Analysis of data from more than 800 public and academic libraries showed the mean salary for librarians with ALA-accredited Master's Degrees increased 2.8 percent from 2006, up $1,550 to $57,809. The median ALA MLS salary was $53,000. Salaries ranged from $22,048 to $225,000.

For the first time the non-MLS salary survey data, including 62 non-MLS positions, reported salaries for staff employed as librarians but who do not have ALA-accredited Master's Degrees in Library Science. Non-MLS salaries ranged $10,712 to $143,700. Both printed surveys also indicate the minimal educational requirement for each position.
See also: ALA-APA Rural Library Staff Salary Survey

Posted by Info Center at 12:36 PM in Compensation | Libraries | Permalink

Source: Jared Bernstein and Lawrence Mishel, Economic Policy Institute, EPI Briefing Paper #195, September 3, 2007

From the press release:
In a new report by the Economic Policy Institute, the nation's leading think tank on labor market trends, economists Jared Bernstein and Lawrence Mishel analyze the state of working America this Labor Day. Their report, Economy's Gains Fail to Reach Most Workers' Paychecks, shows the latest data on where workers stand and looks behind the numbers to the forces at work in an economy that doesn't seem to be playing by the rules.

Posted by Info Center at 12:20 PM in Compensation | Income Inequality/Gap | Permalink

Source: American City and County, September 4, 2007

State employees' salaries rose slightly from 2006 to 2007, but they still lag behind what the private sector pays for the same jobs, according a report by the Washington-based American Federation of Teacher's (AFT) Public Employees division. The median increase of 5.7 percent for the 45 jobs included in the "2007 AFT Public Employees Compensation Survey" is the highest increase in the past five years.

Posted by Info Center at 4:45 PM in Compensation | Public Sector | Permalink

Source: Fiscal Policy Institute, Labor Day 2007

From the press release: (scroll down)
Four years into an economic expansion, New Yorkers finally got a slight raise last year, according to this year's edition of The State of Working New York. In particular, the troubled upstate economy has experienced encouraging payroll growth, with Buffalo leading the way. But overall, these modest gains stand out against a backdrop of worrisome long-term trends.
See also:
Executive Summary
Recommendations

Posted by Info Center at 1:46 PM in Compensation | Workforce | Permalink

Source: John Schmitt, Margy Waller, Shawn Fremstad, and Ben Zipperer, Center for Economic and Policy Research, August 2007

From press release:
Unionization substantially raises wages and benefits even in typically low-wage occupations, according to "Unions and Upward Mobility for Low- Wage Workers", a report released today by the Center for Economic and Policy Research and Inclusion.

The report, which analyzed 15 of the lowest-paying occupations in the United States, found that unionized workers earned about 16 percent more than their non-union counterparts. Unionized workers in these same industries were also about 25 percentage points more likely to have health insurance or a pension plan.

For workers in these low-wage industries, unionization raised their wages, on average, about $1.75 per hour. In financial terms, the union effect on employer-provided health insurance and pensions was even larger.

Posted by Info Center at 11:57 AM in Benefits | Compensation | Labor Unions | Permalink

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.

Posted by Info Center at 11:56 AM in Compensation | Income Inequality/Gap | Permalink

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.

Posted by Info Center at 5:57 PM in Compensation | Immigration | Labor Unions | Permalink

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

Posted by Info Center at 2:07 PM in Compensation | Health Care | Income Inequality/Gap | Poverty | Permalink

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)

Posted by Info Center at 2:12 PM in Compensation | Health Care Workers | Permalink

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.

Posted by Info Center at 2:08 PM in Compensation | Permalink

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.

Posted by Info Center at 4:23 PM in Compensation | Immigration | Permalink

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.

Posted by Info Center at 6:01 PM in Compensation | Health Care Workers | Income Inequality/Gap | Permalink

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

Posted by Info Center at 11:55 AM in Compensation | Permalink

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.

Posted by Info Center at 11:08 AM in Compensation | Corrections | Permalink

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

Posted by Info Center at 2:32 PM in Compensation | Permalink

Source: Kristin Smith and Reagan Baughman, Carsey Institute, University of New Hampshire, Policy Brief no. 7, Summer 2007

One in every two direct care workers and one in every three child care workers live in a low-income family (below 200 percent of the poverty line), and many live in poverty. Hourly wages for the caregiving workforce are low and many lack health insurance. Despite work, these families struggle to make ends meet. Our society depends on the care work of many paid professionals-direct care and child care workers-to help meet the daily needs of our children and the elderly. To stem turnover and provide quality services to young children and the elderly, job conditions among the direct care and child care workforce must improve, and increasing wages is a promising place to start.

Posted by Info Center at 11:21 AM in Child Care Workers | Compensation | Home Health Workers | Permalink

Source: Thomas Lemieux, W. Bentley MacLeod, Daniel Parent, Institute for the Study of Labor, IZA DP No. 2850, June 2007

We document that an increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using bonuses, commissions, or piece-rates. We find that compensation in performance-pay jobs is more closely tied to both observed (by the econometrician) and unobserved productive characteristics of workers. Moreover, the growing incidence of performance-pay can explain 24 percent of the growth in the variance of male wages between the late 1970s and the early 1990s, and accounts for nearly all of the top-end growth in wage dispersion (above the 80th percentile).

Posted by Info Center at 12:27 PM in Compensation | Income Inequality/Gap | Permalink

Source: Internal Revenue Service, IR-2007-119, June 18, 2007

The Internal Revenue Service today announced the release of the spring 2007 issue of the Statistics of Income Bulletin. Highlights include articles on high-income individual income tax returns, taxpayers reporting noncash contributions, farm proprietorship returns, qualified zone academy bonds, international boycott reports and S corporations.

The article on farm proprietorship returns is the first published by IRS in more than 20 years. In addition, this issue of the Bulletin presents selected tax year 1990-2004 individual income tax return data that have been indexed for inflation and tax year 2005 individual income tax return statistics classified by state and size of adjusted gross income.

For tax year 2004, there were 3,021,435 individual income tax returns filed with adjusted gross income (AGI) of $200,000 or more and 3,067,602 returns with expanded income of $200,000 or more.
Download in sections or as full document

Posted by Info Center at 11:50 AM in Compensation | Statistics | Taxation | Permalink

Source: Isabel Sawhill of The Brookings Institution and John E. Morton of The Pew Charitable Trusts, Economic Mobility Project (Pew Charitable Trusts), 2007

From press release:
American men have less income than their fathers’ generation did at the same age, according to a new analysis released today by the Economic Mobility Project, an initiative of The Pew Charitable Trusts. Comprised of a Principals’ Group of experts from The American Enterprise Institute, The Brookings Institution, The Heritage Foundation, and The Urban Institute, the project seeks to investigate the health and status of economic mobility in America.
…
According to the report, men who were in their thirties in 1974 had median incomes of about $40,000, while men of the same age in 2004 had median incomes of about $35,000 (adjusted for inflation). Thus, as a group, income for this generation of men is, on average, 12 percent lower than those of their fathers’ generation. While factors other than cash income also contribute to economic mobility, these data challenge the two-century-old presumption that each successive generation will be better off than the one that came before. The findings rely on new analysis of U.S. Census Bureau data.

Posted by Info Center at 11:34 AM in Compensation | Income Inequality/Gap | Permalink

Source: Thomas A. Kochan, American Prospect, Vol. 18 no. 5, May 2007

From the end of World War II through the mid 1970s, the real wages of American workers nearly doubled, moving up in tandem with the growth in productivity. The United States benefited from an implicit social contract: By working hard and contributing to productivity, profits, and economic growth, workers and their families could expect improved living standards, greater job security, and a secure and dignified retirement. This social contract broke down after 1980, as employees lost their bargaining power. Since then, productivity has grown more than 70 percent while real compensation of nonmanagerial workers has remained flat.

Wages for the lowest-paid workers have collapsed even more than for average workers. While conventional explanations for stagnant wages and increased inequality— such as those that emphasize technological changes and increased premium for skills—may be part of the story, they fail to take into account the historical policy and institutional forces that created and sustained the postwar social contract, or to understand what needs to be done to restore it in a way consistent with the needs of today’s workforce and economy.

Posted by Info Center at 3:39 PM in Collective Bargaining | Compensation | Permalink

Source: Dick Grote, IPMA_HR News, March 2007
(subscription required)

True or false: Good workers should get paid better than bad workers. Sounds simple, doesn’t it? But the apparently obvious concept that those who do better work should receive better pay underlies one of the most puzzling public sector performance management issues: the notion of pay for performance. Before a pay for performance system can work, the tool to measure performance must be solidly in place. That’s why it’s a good idea to develop a good performance appraisal system before you tinker with the compensation system. But the conventional appraisal system used in most cities and state agencies doesn’t have the horse power to drive an effective pay for performance effort. The system has to be scrapped and recreated so that the city’s mission statement and vision and values are clearly linked to individual performance.

Posted by Info Center at 10:29 AM in Compensation | Public Sector | Permalink

Source: Frank Giancola, Benefits & Compensation Digest, May 2007
(subscription required)

Compensation experts agree that skill-based pay is the wave of the future for compensating employees. In this approach, the skills of employees, instead of their jobs, are used to determine base pay. What compensation professionals may not realize is that this is much more than a new way to deliver pay. Adoption usually requires major changes in training and employee development programs, as well as the methods used to select and evaluate employees. Employers considering this method of pay should take into account a number of factors.

Posted by Info Center at 10:17 AM in Compensation | Permalink