U.S. BUREAU OF LABOR STATISTICS COMPENSATION AND WORKING CONDITIONS

Page 1

The Relevance of Occupational Wage Leveling

by John E. Buckley

Bureau of Labor Statistics

Originally Posted: April 27, 2012

For more than 50 years, the Bureau of Labor Statistics (BLS) National Compensation Survey (NCS) and its predecessor

surveys were a principal source of occupational wage data broken out by work level. Occupational pay data by work level

provide more refined results than data rolled up to a higher aggregated level. Leveling is the process that reflects differences

in duties and responsibilities within the occupation. For example, the federal government recognizes eight levels of chemists,

from entry-level chemist to a chemist who may have responsibility for an entire chemical program or equivalent

responsibilities.

Having data without levels for an occupation—engineers, for example—would have limited value to a large company with

several hundred engineers from entry level to engineering department manager. The federal government has a 15-grade

General Schedule (GS) that covers a majority of its white-collar workers. This 15-grade system was used by the NCS to

develop a system to classify by level the occupational data obtained from survey respondents.

The locality pay portion of the NCS, which produced the occupational levels, was used by the designated federal authority,

the presidents pay agent, to adjust federal white-collar salaries. The publication of the 2010 NCS national estimates marked

the end of wage estimates based on the locality pay program. Instead, an alternative program will produce occupational

levels.

This article explains the importance of producing occupational wage level data, which are collected from sampled

establishments by BLS field economists. Typically, the initial data collection was conducted through personal visit to the

establishments’ representatives, and data were updated annually by a combination of email, regular mail, and telephone. The

publication National Compensation Survey: Occupational Earnings in the United States, 2010 presents published data for 10

aggregated (rolled up) levels of management occupations.1 To illustrate, table 1 shows overall aggregated levels 9 and 12,

along with data for four detailed management occupations at the same two levels.

Table 1. Mean hourly earnings in full-time management occupations, aggregated and detailed levels 9 and 12, private

industry workers, National Compensation Survey, July 2010

Occupation Level 9 Level 12 Level 12 as percent of level 9

Aggregated level $31.20 $63.57 204

Finance managers 30.01 84.18 281

General and operations managers 30.83 63.38 206

Education administrators, postsecondary 29.99 81.59 272

Medical and health services managers 27.55 51.86 188

The weighted average hourly earnings rate for all level-9 management workers, $31.20, was close to the rates for the four

detailed level-9 occupations, and, lacking detailed levels, could reasonably be a proxy for the detailed occupation. However,

the aggregated level 12 is not a good substitute for detailed occupational levels. Without data by level for medical and health

services managers, employers relying on the aggregated rate would be a paying a premium of approximately 23 percent, all

other things being equal: [($63.57÷51.86) × 100]−100 = 22.6 percent. Occupational earnings by level can also indicate the

career earnings path for different jobs. Table 2 shows average hourly earnings for selected level-5 (entry level), level-9

(midpoint career), and level-12 (journey level) management and professional jobs. In this example, average earnings of

level-5 engineers are considerably higher than those of accountants and financial analysts at the same level. The differences

in earnings are considerably narrower for level-9 professional jobs. The average hourly earnings of engineers and
U.S. BUREAU OF LABOR STATISTICS COMPENSATION AND WORKING CONDITIONS

Page 2

accountants are not significantly different at level 12, but at this level the average earnings of financial analysts and advisors

surpassed those of engineers by a significant amount.

Table 2. Mean hourly earnings in selected full-time management and professional occupations, levels 5, 9, and 12,

private industry workers, National Compensation Survey, July 2010

Occupation Level 5 Level 9 Level 12 Level 12 as percent of level 5

Accountants and auditors $17.93 $29.92 $52.27 192

Financial analysts and advisors 19.52 33.04 71.09 264

Engineers 28.00 34.36 53.16 90

As indicated by the percentage figures in the right-hand column in table 2, higher or lower earnings at the entry level do not

necessarily mean that the same patterns will be sustained at higher work levels. Level-5 engineers had considerably higher

earnings than the earnings of level-5 accountants and financial analysts. At level 12, however, engineers’ average earnings

were a modest 90 percent higher than level-5 engineers, while level-12 financial analysts’ earnings were 264 percent higher

than level-5 financial analysts.

The Future Of Occupational Leveling

As noted previously, with the replacement of the locality pay portion of the National Compensation Survey, no BLS program

will publish occupational wage data by level. The NCS is introducing a sample design under which it will continue to collect

data by occupational level, but the sample sizes will not be sufficient to produce occupational detail by level. The Bureaus 

Occupational Employment Statistics (OES) program provides annual data on employment and wages by occupation and

industry for over 800 occupations and for about 400 industries throughout the nation, as well as similar data for all states and

selected metropolitan areas. The occupational data are not broken out by level; however, both the NCS and the OES staff

are currently researching methods to incorporate the leveling data from the NCS with the OES data by means of modeling

techniques. This will result in producing more leveling data for more areas than was the case under the locality pay survey.

How Occupations Are Leveled

Before the locality pay portion of the National Compensation Survey was replaced, the Bureaus field economists evaluated

each sampled job, as the data were collected, using a point-factor method to determine its work level based on related duties

and responsibilities. Four factors—knowledge, job controls and complexity, contacts (nature and purpose), and physical

environment—were applied to each of the sampled jobs as they were slotted into one of 15 work levels based on the total

number of points attained. The Bureaus publication National Compensation Survey: Guide for Evaluating Your Firms Jobs

and Pay provides a full description of the leveling process with examples and worksheets.2

John E. Buckley

Economist (retired), Division of Compensation Data Analysis and Planning, Office of Compensation and Working Conditions,

Bureau of Labor Statistics.

Notes

1 See National Compensation Survey: Occupational Earnings in the United States, 2010, Bulletin 2753 (Bureau of Labor Statistics, May 2011), 

http://www.bls.gov/ncs/ncswage2010.htm. 2 National Compensation Survey: Guide for Evaluating Your Firms Jobs and Pay (Bureau of Labor Statistics, October 2003, http://

www.bls.gov/ncs/ocs/sp/ncbr0004.pdf. This publication will be updated to reflect the replacement of the 2000 version of the Standard

Occupational Classification system with the 2010 version. The basic leveling process remains unchanged. For a more in-depth discussion of

the National Compensation Survey and of the methods and mechanics of leveling occupations, see Richard E. Schumann, “Occupational

Selection and Leveling in the National Compensation Survey,” Compensation and Working Conditions Online (August 31, 2011), http://

www.bls.gov/opub/cwc/cm20110829ar01p1.htm; see also, John E. Buckley, “Fifty Years of BLS Surveys on Federal Employees Pay,” 

Monthly Labor Review (September 2009), http://www.bls.gov/opub/mlr/2009/09/art3full.pdf, which provides a summary of the federal pay

adjustment process and includes an example of how work levels are determined.
U.S. BUREAU OF LABOR STATISTICS COMPENSATION AND WORKING CONDITIONS

Page 3

U.S. Bureau of Labor Statistics | Division of Information and Marketing Services, PSB Suite 2850, 2 Massachusetts Avenue, NE Washington, DC

20212-0001 | www.bls.gov/OPUB | Telephone: 1-202-691-5200 | Contact Us