...businesses and government agencies coveting approximately 400,000 individual worksites. The sample is drawn from a sampling frame of over 8 million unemployment insurance tax accounts. The active CES sample includes approximately one-third of all nonfarm payroll workers. From these data, a large number of employment, hours, and earnings series in considerable industry and geographic detail are prepared and published each month. Historical statistics are available at http://www.bis.gov/ees/home.htm.

Each month, BLS and the State agencies collect data on employment, payrolls, and paid hours from a sample of establishments. BLS has established a comprehensive program of new sample unit solicitation in the three BLS regional data collection centers (DCCs). The DCCs perform initial enrollment of each firm via telephone, collect the data for several months via computer assisted telephone interviewing (CATI), and, where possible, transfer respondents to a self-reporting mode such as touchtone data entry (TDE), FAX, or Web. In addition, the DCCs conduct an ongoing program of refusal conversion. Very large firms are often enrolled via personal visit and ongoing reporting is established via electronic data interchange (EDI).

EDI is the most frequently used collection mode (34 percent of respondents), while CATI and TDE are each used by about one-quarter of the respondents. Under EDI, the firm provides an electronic file to BLS each month in a prescribed file format. This file includes data for all of the firms' worksites. The file is received, processed, and edited by the BLS-operated EDI Center. Under the TDE system, the respondent uses a touchtone telephone to call a toll-free number and activate an interview session. The questionnaire resides on the computer in the form of prerecorded questions that are read to the respondent. The respondent enters numeric responses by pressing the touchtone phone buttons. Each answer is read back for respondent verification.

CATI and FAX collection through the regional BLS DCCs combined account for most of the remainder of the reports. For establishments that do not use the above methods, data are collected by the State agency using mail, FAX, transcript, magnetic tape, or computer diskette. About 5,200 firms provide data through the World Wide Web.

Chart 1 shows the percentage of the establishments using different data collection methods.

CONCEPTS

Industrial classification

All data on employment, hours, and earnings for the Nation and for States and areas are classified in accordance with the 2002 North American Industry Classification System (NAICS), U.S. Office of Management and Budget. The United States, Canada, and Mexico share this classification system, and thus it allows a direct comparison of economic data between the three countries.

Establishments are classified into industries on the basis of their primary activity. Those that use comparable capital equipment, labor, and raw material inputs are classified together. This information is collected on a supplement to the quarterly unemployment insurance tax reports filed by employers. For an establishment engaging in more than one activity, the entire employment of the establishment is included under the industry indicated by the principal activity.

Industry employment

Employment data refer to persons on establishment payrolls who received pay for any part of the pay period that includes the 12th day of the month.

The data exclude proprietors, the unincorporated self-employed, unpaid volunteer or family workers, farmworkers, and domestic workers. Salaried officers of corporations are included. Government employment covers only civilian employees; military personnel are excluded. Employees of the Central Intelligence Agency, the Defense Intelligence Agency, the National Geospatial-Intelligence Agency, and the National Security Agency also are excluded.

Persons on establishment payrolls who are on paid sick leave (for cases in which pay is received directly from the firm), on paid holiday, or on paid vacation, or who work during a part of the pay period even though they are unemployed or on strike during the rest of the period are counted as employed. Not counted as employed are persons who are on layoff, on leave without pay, or on strike for the entire period, or who were hired but have not yet reported during the period.

Industry hours and earnings

Average hours and earnings data are derived from reports of payrolls and hours for production and related workers in natural resources and mining and manufacturing, construction workers in construction, and nonsupervisory employees in private service-providing industries.

Production and related workers. This category includes working supervisors and all nonsupervisory workers (including group leaders and trainees) engaged in fabricating, processing, assembling, inspecting, receiving, storing, handling, packing, warehousing, shipping, trucking, hauling, maintenance, repair, janitorial, guard services, product development, auxiliary production for plant's own use (for example, power plant), recordkeeping, and other services closely associated with the above production operations.

Construction workers. This group includes the following employees in the construction division: Working supervisors, qualified craft workers, mechanics, apprentices, helpers, laborers, and so forth, engaged in new work, alterations, demolition, repair, maintenance, and the like, whether working at the site of construction or in shops or yards at jobs (such as precutting and preassembling) ordinarily performed by members of the construction trades.

Nonsupervisory employees. These are employees (not above the working-supervisor level) such as office and clerical workers, repairers, salespersons, operators, drivers, physicians, lawyers, accountants, nurses, social workers, research aides, teachers, drafters, photographers, beauticians, musicians, restaurant workers, custodial workers, attendants, line installers and repairers, laborers, janitors, guards, and other employees at similar occupational levels whose services are closely associated with those of the employees listed.

Payroll. This refers to the payroll for full- and part-time production, construction, or nonsupervisory workers who received pay for any part of the pay period that includes the 12th day of the month. The payroll is reported before deductions of any kind, such as those for old-age and unemployment insurance, group insurance, withholding tax, bonds, or union dues; also included is pay for overtime, holidays, and vacation, and for sick leave paid directly by the firm. Bonuses (unless earned and paid regularly each pay period); other pay not earned in the pay period reported (such as retroactive pay); and the value of free rent, fuel, meals, or other payment in kind are excluded. Employee benefits (such as health and other types of insurance, contributions to retirement, and so forth, paid by the employer) also are excluded.

Hours. These are the hours paid for during the pay period that includes the 12th of the month for production, construction, or nonsupervisory workers. Included are hours paid for holidays and vacations, and for sick leave when pay is received directly from the firm.

Overtime hours. These are hours worked by production or related workers for which overtime premiums were paid because the hours were in excess of the number of hours of either the straight-time workday or the workweek during the pay period that included the 12th of the month. Weekend and holiday hours are included only if overtime premiums were paid. Hours for which only shift differential, hazard, incentive, or other similar types of premiums were paid are excluded.

Average weekly hours. The workweek information relates to the average hours for which pay was received and is different from standard or scheduled hours. Such factors as unpaid absenteeism, labor turnover, part-time work, and stoppages cause average weekly hours to be lower than scheduled hours of work for an establishment. Group averages further reflect changes in the workweek of component industries.

Indexes of aggregate weekly hours and payrolls. The indexes of aggregate weekly hours are calculated by dividing the current month's aggregate by the average of the 12 monthly figures for 2002. For basic industries, the hours aggregates are the product of average weekly hours and production worker or nonsupervisory worker employment. At all higher levels of industry aggregation, hours aggregates are the sum of the component aggregates.

The indexes of aggregate weekly payrolls are calculated by dividing the current month's aggregate by the average of the 12 monthly figures for 2002. For basic industries, the payroll aggregates are the product of average hourly earnings and aggregate weekly hours. At all higher levels of industry aggregation, payroll aggregates are the sum of the component aggregates.

Average overtime hours. Overtime hours represent that portion of average weekly hours that exceeded regular hours and for which overtime premiums were paid. If an employee were to work on a paid holiday at regular rates, receiving as total compensation their holiday pay plus straight-time pay for hours worked that day, no overtime hours would be reported.

Because overtime hours are premium hours by definition, weekly hours and overtime hours do not necessarily move in the same direction from month to month. Such factors as work stoppages, absenteeism, and labor turnover may not have the same influence on overtime hours as on average hours. Diverse trends at the industry group level also may be caused by a marked change in hours for a component industry in which little or no overtime was worked in both the previous and current months.

Average hourly earnings. Average hourly earnings are on a "gross" basis. They reflect not only changes in basic hourly and incentive wage rates, but also such variable factors as premium pay for overtime and late-shift work and changes in output of workers paid on an incentive plan. They also reflect shifts in the number of employees between relatively high-paid and low-paid work and changes in workers' earnings in individual establishments. Averages for groups and divisions further reflect changes in average hourly earnings for individual industries.

Averages of hourly earnings differ from wage rates. Earnings are the actual return to the worker for a stated period; rates are the amount stipulated for a given unit of work or time. The earnings series do not measure the level of total labor costs on the part of the employer because the following are excluded: Benefits, irregular bonuses, retroactive items, payroll taxes paid by employers, and earnings for those employees not covered under production worker, construction worker, or nonsupervisory employee definitions.

Average hourly earnings, excluding overtime. Average hourly earnings, excluding overtime-premium pay, are computed by dividing the total production worker payroll for the industry group by the sum of total production worker hours and one-half of total overtime hours. No adjustments are made for other premium payment provisions, such as holiday pay, late-shift premiums, and overtime rates other than time and one-half.

Average weekly earnings. These estimates are derived by multiplying average weekly hours estimates by average hourly earnings estimates. Therefore, weekly earnings are affected not only by changes in average hourly earnings but also by changes in the length of the workweek. Monthly variations in such factors as the proportion of part-time workers, stoppages for varying reasons, labor turnover during the survey period, and absenteeism for which employees are not paid may cause the average workweek to fluctuate.

Long-term trends of average weekly earnings can be affected by structural changes in the makeup of the workforce. For example, persistent long-term increases in the proportion of part-time workers in retail trade and many of the services industries have reduced average workweeks in these industries and...

NOTE: All illustrations and photos have been removed from this article.



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