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BLS prepares to broaden scope of its white-collar pay survey.

BLS prepares to broaden scope of its white-collar pay survey Over the last 25 years, the Bureau of Labor Statistics' annual Survey of Professional, Administrative, Technical, and Clerical Pay (PATC survey) has become a key source of information on salaries for a number of occupations. For example, the 1985 survey reported on 25 occupations--ranging from file clerk and drafter to attorney and engineer--by salary and employment. Because occupations typically are divided by BLS into two or more work levels (defined by specific duties and responsibilities), pay variations related to level characteristics are readily identifiable.

An expansion of survey coverage over the 1986-87 period will increase the usefulness of PATC findings. Prior to 1986, the survey was limited to medium and large establishments. It covered most private sector industries but excluded important portions of the services industries, such as hotels, hospitals, and educational institutions. By mid-1987, the survey will have expanded to smaller establishments and all private services industries. In addition, BLS is planning test studies in 1987 and 1988 to assist in developing a new, broad-based survey of white-collar pay and benefits in the private and public sectors that will eventually replace the PATC survey.

The 1986-87 coverage enhances the occupational data reported previously in the PATC survey. The expansion also permits additional occupations to be surveyed, especially in the health-related field, and allows more intensive analysis of findings.

The 1987-88 test studies will address the following issues: the feasibility of including, in a broad-based survey of occupational pay levels and structures, such important jobs as teachers and salesworkers; ways to implement a probability-based selection of jobs for such a survey; approaches for measuring employee benefits as well as pay; and the feasibility of accounting in an establishment-based survey for the importance of employee characteristics, such as education and experience, as explanations for pay variation among employees in a given occupation.

Survey background

From its inception in 1959-60, the PATC survey has been closely related to the pay-setting process for white-collar employees of the Federal Government. The Federal Salary Reform Act of 1962 established the principle of making salary rates for these employees comparable to those in private industry for the same levels of work. The comparability principle was continued in the Federal Pay Comparability Act of 1970, which currently governs general pay adjustments for Federal white-collar employees.

Under the 1970 Act, a Pay Agent designated by the President (currently, the Secretary of Labor and the directors of the Office of Management and Budget and the Office of Personnel Management) sets up comparability procedures and reports annually to the President. The report compares salaries of Federal employees with those paid in private industry for the same levels of work, as determined by the PATC survey.

The Pay Agent calculates the Federal pay adjustment needed to achieve comparability with private industry. If the President decides on a comparability adjustment, it becomes effective automatically the first pay period on or after October 1; if a comparability adjustment is deemed inappropriate because of "national emergency or economic conditions affecting the general welfare," the President must submit an alternative plan to the Congress before September 1. The alternative plan becomes effective unless rejected within 30 days of submission by a majority vote in either the House of Representatives or the Senate. If the Congress rejects an alternative plan, the comparability increase calculated by the Pay Agent becomes effective in October.

The legislation governing the comparability process calls for a comparison of Federal salaries with those in "private enterprise," but does not define the scope of the comparison. It requires a survey of private industry by the BLS--the PATC survey--the design of which is determined by the President's Pay Agent. Therefore, the Pay Agent determines the industries and occupations to be studied and the minimum size of surveyed establishments.

In response to decisions of the Pay Agent, the scope of the PATC survey has changed over the years. In the early 1960's, for example, the survey was limited to establishments in specified industries employing at least 250 workers and located in metropolitan areas. Since then, the survey has expanded to nonmetropolitan areas, more nonmanufacturing industries, and to smaller establishments. (See exhibit 1.)

The occupations included in the PATC survey have also changed. (See exhibit 2.) Of the 19 occupations surveyed in 1960-61, 15 remained in the 1985 survey, although their definitions and work levels have been modified. Because of modifications in occupational structure and the needs of the comparability process, 10 more jobs were added by 1985.

The 1985 survey provided data for 107 work levels that span the 25 occupations studied. Industrial coverage and minimum establishment size were as follows: mining and construction, 250 workers; manufacturing, 100 or 250 workers; transportation, communications, electric, gas, and sanitary services, 100 or 250 workers; wholesale trade, 100 workers; retail trade, 250 workers; finance, insurance, and real estate, 100 workers; and selected services, 50 or 100 workers. Approximately 43,000 establishments were within scope of the survey. They employed a total of 22.7 million workers, 2.1 million of whom were in the surveyed occupations.

Expansion proposals

The adequacy of the scope of the PATC survey has long been a matter of controversy. In 1973, the U.S. General Accounting Office recommended legislative changes that would allow inclusion of State and local governments in the pay comparisons. The President's Panel on Federal Compensation echoed this suggestion in 1975, as did President Carter's Reorganization Project in 1978, the President's Private Sector Survey on Cost Control in 1984, and the Pay Agent in its report to the President in 1985. Some of these groups also recommended inclusion of private services industries not covered, while others suggested lowering the minimum employment size of surveyed establishments.

While some changes occurred in 1977 and 1979, several longstanding recommendations were not acted upon until 1985, when the President's Cabinet Council on Management and Administration reviewed Federal pay policy and issued a formal proposal for expanding the PATC survey. The proposal called for bringing within the PATC survey scope: small private sector establishments, that is, units employing as few as 20 workers; services industries, such as hotels, hospitals, and educational institutions; and State and local governments. As indicated in the 1985 Pay Agent's report, information from State and local governments cannot be used in the comparability process without enabling legislation, but can provide a basis for discussing the technical merits of such inclusion.

To conserve resources, the Cabinet Council's proposal called for splitting the PATC survey universe into two parts--(1) the existing (1985) survey scope and (2) all services industries plus State and local governments. These segments were to be surveyed on alternating biennial cycles, with data for the segment not surveyed in a given year estimated by adjusting the previous year's findings by the percentage change in an appropriate component of the BLS Employment Cost Index. This plan was subsequently revised by the Congress, as discussed later.

1986 coverage

In March 1986, BLS began the expansion of the PATC survey proposed by the Cabinet Council. The same industries were surveyed in 1986 as in 1985, but the minimum employment size of establishments covered by the survey was reduced to 50 workers.

Coverage of smaller establishments enhances the usefulness of findings for individual occupations and allows more detailed analysis of the effect of employment size on establishment pay levels. To permit comparisons with the 1985 survey findings, the 1986 report includes separate data for medium and large firms.

The 1986 data show that larger establishments (those with 2,500 workers or more) generally pay higher salaries to white-collar employees than do small firms (50 to 999 workers), although the pay advantage varies by occupation and skill level. In roughly three-fourths of the clerical occupational work levels analyzed, average salary levels in large establishments were 10 to 20 percent above those in small establishments. Among professional, administrative, and technical occupations, the large establishment pay advantage was generally less than 10 percent; differentials greater than 10 percent were usually in the lower levels of these occupations. Pay levels for workers in establishments with 1,000 to 2,499 workers generally fell between those of their counterparts in larger and smaller firms.

Expansion of survey scope also permitted study of additional occupations which, in terms of employment, are important in both the Federal Government and private industries. Additions to the 1986 survey included a general clerk occupation (with 4 work levels) and a new bottom level for the already surveyed purchasing clerk/assistant job.

1987 coverage

As mentioned earlier, plans for a 1987 survey covering all services industries plus State and local governments were revised as a result of congressional action. The Congress directed that the BLS develop a broad-based national white-collar salary and benefits survey ". . .that meets not only the needs of the Federal pay agent but also provides general information about the levels of compensation of all segments of the white-collar workforce." Furthermore, the BLS was requested to submit to the Congress, by August 1987, plans for implementing this new, broad-based white-collar survey.

As a result, the March 1987 PATC survey will be conducted in the private services industries only, but will cover all establishments with at least 20 workers. Additionally, a series of research and test studies will be conducted that address a wide range of issues and concerns pertinent to the development of a broad-based white-collar salary and benefits survey.

The 1987 PATC survey will permit, for the first time, separate analysis of occupational pay and staffing patterns in all private services industries. Where possible, data by size of establishment and for all metropolitan areas combined will be published. Also, data for two key service sectors--business services and health services--will be published. The 1987 survey will add the following occupations: registered nurse (4 levels), licensed practical nurse (3 levels), nursing assistant (4 levels), and civil engineering technician (5 levels).

There will be a dramatic increase in employment coverage stemming from PATC survey expansions. Consequently, data available to the Pay Agent will represent salaries in about 300,000 establishments (1986 plus 1987 survey coverage) that employ a total of 47 million workers, compared with 43,000 establishments and 23 million workers in 1985 (of which 2 million workers were classified in PATC survey occupations). At the time of the 1985 survey, 51 percent of the 23 million workers within the scope of the survey were employed in manufacturing industries and 49 percent in nonmanufacturing. After the 1987 survey expansion, the proportions will be 68 percent in nonmanufacturing and 32 percent in manufacturing, more closely paralleling the industrial composition of the U.S. private, nonfarm economy.

Test studies. The 1987 test studies will be coordinated with portions of ongoing Bureau surveys, such as the Employee Benefits Survey in State and local governments and, in the private sector, Area Wage Surveys which provide occupational pay data on a locality basis. These studies will examine such issues as: (1) pay, benefits, and work arrangements for white-collar jobs not currently surveyed; (2) testing methods to identify work levels (for example, trainee, fully qualified, supervisory) within a broad spectrum of professional/managerial occupations; (3) handling classification and pay practices (for example, commissions) for a wide variety of sales occupations; (4) determining whether employee characteristics, such as education and experience, can be readily identified in an establishment-based survey; and (5) evaluating which statistical methods and survey designs (for example, probability selection of occupations) are appropriate for the broad-based survey of occupational pay levels and structures.

PLANS FOR THE PATC SURVEY are indefinite beyond 1987, as the new broad-based white-collar survey develops to take its place. The scope of the PATC survey during the transition period will probably alternate between the 1986 and 1987 coverage; some adjustments will be made to the minimum requirements on establishment employments.
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Author:Morton, John D.
Publication:Monthly Labor Review
Date:Mar 1, 1987
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