18 Compensation and Working Conditions Fall 1998

How Do Wages

in Alaska Compare

to Wages on the

Mainland?

Average weekly wages for full-time employees studied in

Alaska ranged from $427 for switchboard receptionists to

$1,457 for attorneys. Alaskan wages were about 24

percent above comparable mainland averages. All

sampled occupational groups in Alaska earned above the

mainland average.

Hilery Z. Simpson is an economist

in the Division of Compensation and Data

Estimation, Bureau of Labor Statistics.

Telephone (202) 606-6246.

E-mail: Simpson_H@bls.gov

Aprimary purpose of the Occupational CompensationSurvey (OCS) was to provide

an accurate measure of local labor

market pay levels in the United States

for the purpose of setting locality based

Federal wages and salaries.1 Prior to

OCS, the Federal Government usually

paid an identical wage for an occupation regardless of geographic location.

This system made it difficult to recruit

workers in certain higher paying areas. In response to this, Congress

passed the Federal Employees Pay

Comparability Act in 1990 that mandated the Bureau of Labor Statistics

(BLS) to collect the necessary wage

comparability data.

The Act only applies to Federal

workers within the contiguous 48

States (mainland). Federal wages in

Hawaii, Alaska, Puerto Rico, and other

areas such as Guam and the Northern

Mariana Islands, are adjusted using a

methodology based on the Consumer

Price Index (CPI). In response to litigation about pay adjustments in the

areas excluded from the Act, the OfHILERY Z. SIMPSON

fice of Personnel Management (OPM)

contracted with BLS to conduct occupational wage surveys in Alaska, Hawaii, and Puerto Rico in 1996. This

article presents selected survey results

for the State of Alaska and the Anchorage Metropolitan Statistical Area

(MSA).

Survey design

Standard OCS procedures were used

to complete the surveys for Anchorage and Alaska. As a result, data are

comparable between all published

OCS geographic areas. The major

objective of all OCS surveys was to

describe the level and distribution of

This is the second of three articles

dealing with a special wage study

completed in 1996 for Hawaii,

Alaska, and Puerto Rico. An article

on wages in Hawaii appeared in the

Summer 1998 issue of Compensation and Working Conditions and an

article on wages in Puerto Rico will

follow in the Winter 1998 issue.
 Compensation and Working Conditions Fall 1998 19

Wages in Alaska

occupational pay in a given labor market. In addition, the surveys provided

information on the incidence of employee benefits among and within local labor markets. However, because

the contract with OPM only included

funds for the collection of wages and

salaries, no benefit data were collected

for either the Anchorage or Alaska

surveys.

The OCS randomly sampled establishments employing 50 or more

workers in goods-producing industries

(mining, construction, and manufacturing); service-producing industries

(transportation, communications,

electric, gas, and sanitary services;

wholesale and retail trade; finance, insurance, and real estate); and State

and local governments.2 Private

households, the Federal Government,

the self-employed, and agricultural

employees are excluded from the survey. Unless specifically included in a

Bureau job description, working supervisors, trainees, and part-time employees are also excluded.3

Establishments in the Alaskan surveys were randomly sampled using

State unemployment insurance reports

for the State of Alaska and the Anchorage MSA as of 1994. From these

reports, establishments were classified

into strata (groups) based on industry

and employment size. The number

of employees expected to be found

(based on previous occupational pay

surveys) determined the number of establishments sampled from a stratum

in professional, administrative, technical, protective services, clerical, and

blue-collar occupations. In other

words, the larger the number of employees expected to be found in the

46 selected occupations, the larger the

number of establishments sampled in

that stratum. Establishment sampling

was also increased for certain industry strata expected to have relatively

high sampling errors.

A total of 663 establishments employing nearly 147,000 employees

were found in the State of Alaska (inclusive of the Anchorage MSA) to be

in scope of the two surveys.4 Of those,

232 establishments employing 94,275

workers were studied in the Alaska

survey, and 102 establishments employing 44,699 workers were examined in the Anchorage survey. Because the majority of sampled

establishments in Alaska are located

within the Anchorage MSA, there was

much overlap between the two surveys

in terms of establishments and workers surveyed. Data were gathered concurrently for the two surveys, starting

in July 1996 and lasting through October 1996. The average payroll reference month was July 1996.

Wage data were collected for all

employees in 46 pre-selected occupations5 that met OCS definitions.6 For

example, the OCS definition of a word

processor, in brief, is anyone whose

primary duties are to produce such

items as memos, forms, or graphs using word processing software packages. Excluded are typists who use

non-editing typewriters, key entry operators, and employees requiring subject matter knowledge, even if their

job title was word processor.

The purpose of using concise job

descriptions is two-fold. First, it helps

field economists classify workers into

appropriate occupations. Second, it

permits establishments to compare

their employees’ wages with the earnings of workers who do the same type

of work. Because of the emphasis on

comparability of occupational content,

the Bureau’s job description for an

occupation may differ significantly

from those used in individual establishments.

In addition to specific employee

occupational classifications, occupations are further classified into grade

levels. Just as the occupations are

clearly defined, so are grade levels.

For example, the definition of a level1 accounting clerk states that the incumbent “performs very simple and

routine accounting clerical operations....” The description then goes

on to explain the level of supervision

received and the specific procedures

incumbents are expected to be able to

complete, such as “verifying mathematical accuracy.” At level-2, accounting clerks are expected to “perform one or more routine operations

such as examining...transactions to

ensure accuracy....” At the next level,

they are expected to do double entry

bookkeeping. Finally, accounting

clerks level-4, the highest level surveyed, balance and reconcile accounts.

(Actual published occupational and

grade level definitions used are much

more detailed than shown in this example.)

As these definitions illustrate, the

responsibilities and knowledge needed

to complete the work rises from one

level to the next. The number of levels within an occupation depends upon

its range of complexity. For example,

the occupation of engineer has eight

levels, while receptionist has one

level.

The classification of workers

within an occupation into various levels allows true comparability of duties and skills. This is particularly

useful to wage and salary administrators and others who compare wage

rates among establishments for workers who do the same work, not just

workers who have the same job title.

Wages by establishment size

Establishments with more than 500

workers employed 46 percent of all

Alaskan workers, 5-percentage points

below the mainland average of 51 percent. Alaska had 48 large establishments, of which 40 were surveyed.

Previous BLS studies have shown

that average occupational wages in

larger establishments tend to be higher

than in smaller establishments.7 This

was also the case in the Alaska and

Anchorage surveys. (See table 1.)

Unless otherwise noted, wage data

presented in the rest of this article are

from all surveyed establishments regardless of size.

Different industry concentrations

Industry employment distributions

differed between the State of Alaska

and the mainland, particularly for the

State and local government sector, as
20 Compensation and Working Conditions Fall 1998

the tabulation below shows. (See also

chart 1.)

Alaska Mainland

Services ........... 49 55

Goods

 producing........ 20 24

State and local

 government .... 31 21

Occupational pay data

The occupational pay data presented

in this article are for full-time workers who work a regular weekly schedule as established by their employer

(approximately 40 hours, on average,

in Alaska). The published data exclude premium pay for overtime,

weekends, holidays, and late shifts.

Also excluded are nonproduction bonuses and lump-sum payments. Pay

increases under cost-of-living clauses

and incentive payments (production

bonuses), however, are included.

Unless otherwise noted, the pay

data presented are for employees in

private industry, as well as State and

local governments. Average pay data

were published in Alaska for 38 selected occupations; however, data for

only 16 occupations are presented in

this article. Occupations are included

based on their prevalence in the local

economy, their comparability with

mainland averages, and their suitability to illustrate a point.8

The earnings data presented are

the mean weekly or hourly wages of

all sampled workers in an occupation. Mean wages were computed

by totaling the pay for all workers

in each occupation and level and

then dividing by the total number of

employees in each category. Median

wages, the point at which half the

workers earned less and half earned

more, as well as middle ranges were

CHART 1. Percent of non-agricultural workforce by industry sector, Alaska and the mainland, 1996

Percent

0

20

40

60

80

100

Alaska Mainland

Goods Producing Service Producing Government

TABLE 1. Average weekly and hourly wages in Alaska by establishment size, selected

occupations, 1996

Accountants ....................................................... $943 $975

Attorneys ............................................................ 1,457 1,434

Engineers ........................................................... 1,371 1,430

Scientists ............................................................ 1,181 1,174

Computer programmers ..................................... 860 830

Computer systems analysts ............................... 1,143 1,156

Personnel specialists .......................................... 1,061 1,065

Accounting clerks ............................................... 535 547

General maintenance workers ............................ 17.16 19.49

Maintenance electricians .................................... 22.56 24.15

Janitors ............................................................... 10.86 12.33

Mean

All

establishments

surveyed

Surveyed

establishments

employing 500

workers or more

Occupation

Percent employment Sector

Goods producing Service producing Government

Weekly

Hourly
 Compensation and Working Conditions Fall 1998 21

Wages in Alaska

also published, but are not included

in this article.

Professional occupations

Accountants. Like most other occupations surveyed, accountants were

paid more in Alaska than in the 48

contiguous States.9 The average

weekly pay of accountants in the Anchorage MSA, the State of Alaska, and

on the mainland are presented in table

2.

To be classified as an accountant,

the employee must perform professional accounting work requiring

knowledge of financial transactions.

Public accountants are considered a

separate occupation.

As seen in many of the occupations

surveyed, the difference in pay between

Alaska and the mainland average varied by grade level. Generally, the

higher the grade level, the closer the

relative Alaskan wage was to the comparable mainland average. Similar

results were also found in the Anchorage survey.10

Engineers. With the exception of entry-level workers, who earned 32 percent more than the mainland average,

wages of Alaskan engineers were

roughly 20 percent greater than the

mainland average. (See table 2.) For

example, while a level 2 engineer

earns roughly $1,000 less per week

than a level 6, the ratios of the Alaskato-mainland average pay for both

grade levels are similar.

To be categorized as an engineer,

workers must hold a Bachelor of Science degree in engineering (or in rare

instances, equivalent experience or

education) and perform professional

work including development, design,

or testing of facilities, systems, or devices. As the knowledge required increases, the level of supervision required decreases.

Engineers in private establishments

are paid approximately $300 per week

more than State and local government

engineers in Alaska. This was the

largest pay gap between private and

government establishments for any

professional occupation studied.

Technical Occupations

Computer programmers. The primary duty of computer programmers

is to convert specifications into a sequence of detailed computer instructions. Even though the national market for people with these skills has

become increasingly tight in recent

years, differences in Alaska and mainland pay were less, on average, than

other professional occupations studied.

For example, a level-3 programmer

earned 11 percent more in Alaska, yet

the average difference in pay between

Alaska and the mainland for all occupations studied was 24 percent. A

possible reason for the relatively

smaller pay gap might be the limited

number of establishments in Alaska,

relative to the mainland, that can use

the skills of a computer programmer.

Computer systems analysts. While

computer programmers usually write

code that follows a set of specifications,

computer system analysts are more

likely to analyze overall business and

scientific problems and develop the

needed specifications. As illustrated

in table 2, analysts’ earnings in Alaska

are greater than the mainland average,

yet lag behind the average pay gap at

the higher grade levels.

Clerical occupations

Clerks. Alaskan accounting and general clerks and receptionists were

among the lowest paid occupations

studied. The wages of general clerks

have a tendency to be higher than the

other occupations in this group; they

also had the largest pay difference relative to the mainland. For example, the

wages of level-2 accounting clerks

were 116 percent of the mainland average for the same occupation, while

TABLE 2. Average weekly wages for various occupations and levels, 1996

 Occupation and level Anchorage Alaska Mainland Ratio1

Professional

 Accountants

 2 ............................................. $746 $760 $626 121

 3 ............................................. 972 958 811 118

 4 ............................................. 1,116 1,198 1041 115

 Engineers

 1 ............................................. - 892 675 132

 2 ............................................. 948 971 805 121

 3 ............................................. 1,125 1,124 959 117

 4 ............................................. 1,436 1,423 1,167 122

 5 ............................................. 1,732 1,696 1,411 120

 6 ............................................. 1,994 1,960 1,659 118

Technical

 Computer programmers

 2 ............................................. 739 764 639 120

 3 ............................................. 856 878 788 111

 Systems analysts

 1 ............................................. 978 976 779 125

 2 ............................................. 1101 1108 940 118

 3 ............................................. 1260 1262 1111 114

Clerical

 Accounting clerks

 2 ............................................. 450 439 379 116

 3 ............................................. 510 531 464 114

 4 ............................................. 607 654 549 119

 General clerks

 2 ............................................. 456 470 342 137

 3 ............................................. 494 558 429 130

 4 ............................................. 583 582 493 118

 Receptionists ............................. 424 427 355 120

 1 Ratio is Alaska to mainland wages.

 Note: A dash indicates that data are not available.
22 Compensation and Working Conditions Fall 1998

level-2 general clerks earned 137 percent of the mainland average. (See

table 2.) General clerks are responsible for a combination of clerical tasks

such as maintaining records and compiling information at each grade level;

accounting clerks are expected to perform one or more simple accounting

tasks in an entry level position, while

a level-4 accounting clerk maintains

ledgers and reconciles accounts.

These differences in responsibilities

might explain why lower level general

clerks earn more than accounting

clerks at the equivalent level, while

high level accounting clerks earn more

than high level general clerks.

Receptionists. This was the lowest

paid occupation found in the Alaska

survey, averaging $427 per week.

Workers in this occupation primarily

use telephone switchboards to relay

calls and greet visitors. Like many of

the other occupations studied, they

earned roughly 20 percent more than

the mainland average.

Protective services occupations

Police, firefighters, and corrections

officers. Employed almost exclusively

by State and local governments, protective services workers earned much

more in Alaska, on average, than on

the mainland. As shown in table 3,

workers in all three protective services

occupations earned wages that were

substantially above the equivalent

mainland average.

As on the mainland, Alaskan police officers earned more than their

protective services colleagues, and

close to $400 per week above the mainland average. Corrections officers,

however, enjoyed the largest wage advantage noted in the survey for Alaskan workers, earning a wage that was

170 percent of the mainland average.

Alaskan firefighters earned 131 percent of the mainland average.

Blue-collar occupations

Maintenance workers. Pay rates between maintenance workers in Anchorage and Alaska varied more than

in the other occupations studied. (See

table 4.) A possible reason for this

difference could be the large number

of highly paid blue-collar occupations

employed in the oil industry outside

of Anchorage.

Skilled multi-craft maintenance

workers were among the highest paid

blue-collar occupations studied.

Workers in these journey-level jobs

perform maintenance and repair work

in two or more craft trades such as masonry, plumbing, or carpentry. General maintenance workers, on the other

hand, perform work related to the repair and upkeep of buildings, equipment, and related fixtures. Although

a worker needs to have practical skill

and knowledge in two or more trades

to be included in this category, journey-level experience is not required.

As expected, general maintenance

workers are paid less than journeylevel skilled multi-craft workers.

Truckdrivers. Drivers of heavy trucks

and tractor-trailers earned more in

Alaska than their mainland counterparts.11 (See table 4.) As expected,

the hourly wages of Alaskan

truckdrivers, like those on the mainland, varied by the size of truck driven.

As the size of the vehicle increased

(and often the driver’s level of required

experience and education) so too did

the hourly wage rate.

Summary

Wage progression within most of the

sampled occupations was less in

Alaska than for comparable occupations on the mainland. Alaskans in

every occupation studied earned more

than their counterparts on the mainland, but entry and lower grade levels

had a tendency to earn more relative

to their counterparts in the 48 contiguous States than did higher grade levels within the same occupation. There

are many examples of this phenomenon. For example, entry level engineers in Alaska earned 132 percent of

the average mainland wage and level6 engineers, the highest grade published, earned 118 percent of the mainland average. Similar results were

found in each of the professional and

technical occupations studied. In addition, general clerks and truckdrivers

had the same pattern. The only occupation with published levels that did

not follow this tendency was accounting clerk; wages in this occupation

TABLE 3. Average weekly wages for protective services occupations, 1996

 Occupation Anchorage Alaska Mainland Ratio1

Corrections officers ...................... $914 $901 $529 170

Firefighters ................................... 1114 901 690 131

Police officers level 1 .................... 1131 1102 700 157

1

 Ratio is Alaska to mainland wages.

TABLE 4. Average hourly wages for selected blue-collar occupations, 1996

 Occupation and level Anchorage Alaska Mainland Ratio1

Maintenance workers:

 General

 1 ............................................. $11.32 $15.05 - -

 2 ............................................. 18.56 20.17 - -

 Electricians ................................ - 22.56 18.74 120

 Motor vehicle ............................. 18.59 19.98 15.91 126

 Skilled multi-craft ....................... 19.44 23.07 - -

Truckdrivers

 Heavy ........................................ - 15.85 13.38 118

 Tractor-trailer ............................. 17.11 16.51 14.24 116

1

 Ratio is Alaska to mainland wages.

 NOTE: A dash indicates that data are not available.
 Compensation and Working Conditions Fall 1998 23

Wages in Alaska

were the highest, compared to the

mainland average, for the most experienced grade level.

Average occupational wages in

Alaska tended to have a smaller range

in pay between the lowest and highest

skilled employees than on the mainland. For example, the average mainland weekly pay for entry level engineers was $675, while experienced

engineers (level 6) earned almost 2.5

times as much, or $1,659. Experienced engineers in Alaska, in comparison, earned 2.2 times as much as entry level engineers. Similar results are

seen for many of the occupations studied. The specific cause for Alaska’s

lower spread in occupational wages is

unknown.

Additional survey information

Publishing data by occupation and

grade level. Although the list of occupations and grade levels are known

prior to collection, the occupations and

grade levels which meet the necessary

requirements for publication are determined only after the survey is completed. For a specific occupation or

grade level to be published, it must:

(1) Be sampled from at least three establishments, (2) have a minimum of

6 weighted workers; and (3) not have

a single establishment contribute more

than 60 percent of the workers in that

occupation or grade level.

The prevalence of an occupation in

the surveyed area is the primary factor determining which occupations

will meet publication requirements.

For example, a State or MSA with

large numbers of engineers is more

likely to have all eight levels of engineers published than an area with relatively few engineers. In the Alaska

survey, 34 of the 46 occupations had

at least one level published, and 9 occupations had all possible levels published.

Occupational pay information is

published for both private industry and

State and local governments when possible. Within private industry, more

detailed information is presented to the

extent that the surveys’ establishment

sample can support such detail. In the

Alaska and Anchorage surveys, data

are also published for occupations regardless of establishment size (50 or

more workers) and for occupations

within establishments that employ 500

or more workers.

Survey nonresponse. Sample loss

rates were lower in the Alaska and

Anchorage surveys than for OCS in

general. (See chart 2.) Wage data were

not collected from 9.5 percent of the

sampled establishments in Alaska and

10.8 percent in Anchorage, primarily

due to lack of cooperation. The relative sample weights originally assigned to the establishments that chose

not to participate were redistributed

among the participating establishments. This ensures that published

average wages take into account industry variations, among other factors.

In addition to refusals, a small percentage of establishments were also excluded from the survey because they

were out-of-business or out-of-scope at

the time of collection.12

In addition to establishment losses,

certain participating respondents refused to provide wage data for each

0

5

10

15

20

25

Anchorage Alaska Mainland

Refusals Other losses Total sample loss

CHART 2. Sampled establishment loss rates for Anchorage, Alaska, and the mainland, 1996

Percent

Refusal Other losses Total sample loss
24 Compensation and Working Conditions Fall 1998

occupation requested. The proportion

of employees for whom wages were not

available was less than 5 percent in

both surveys. No weight adjustments

were made for those establishments

providing partial data.

Data quality. Estimates of relative

standard errors13 for these surveys

vary among occupational work levels,

and depend upon such factors as the

frequency with which the job occurs,

the dispersion of salaries for the job,

and the survey design. The tabulation

1

 In July 1997, BLS concluded 6 years of locality pay and Service Contract Act surveys collected under the umbrella of the Occupational

Compensation Survey (OCS) program. The OCS

program was discontinued as the first step in phasing in the new National Compensation Survey

(NCS) program. For additional information on

NCS, see Beth Levin Crimmel, “COMP2000:

Designing a New Wage Survey,” Compensation

and Working Conditions, December 1996, pp. 9-

11. 2

 For these surveys, an establishment is an

economic unit which produces goods or services,

a central administrative office, or an auxiliary

unit providing support services to a company. In

manufacturing industries, the establishment is

usually at a single physical location. In service

producing industries, all locations of a company

in a Metropolitan Statistical Area or nonmetropolitan county are usually considered an establishment. In government, an establishment is

generally defined as all locations of a specific

government entity. 3

 Working supervisors, apprentices, learners,

beginners, and trainees, as well as part-time, temporary, and probationary workers are excluded,

unless specifically included in the job description. 4

 Includes all workers in all establishments

with total employment at or above the minimum

limitations. 5

 The selected occupations are as follows: ProLess than 1 ....... 2.4 2.9

1 to 3 ................ 42.9 35.3

3 to 5 ................ 42.9 52.9

5 and over ....... 11.9 8.8

show the distribution of the published

work levels for one relative standard

deviation from both surveys.

fessional occupations—accountants, public accountants, attorneys, engineers, registered nurses;

administrative occupations—budget analysts,

buyers, computer programmers, computer systems

analysts, computer systems analysts supervisors/

managers, personnel specialists, personnel supervisors/managers, tax collectors; clerical occupations—accounting clerks, general clerks, order

clerks, key entry operators, personnel assistants,

secretaries, switchboard operators/receptionists,

word processors; protective service occupations—corrections officers, firefighters, police officers; technical occupations—computer operators, drafters, engineering technicians, civil engineering technicians, licensed practical nurses, nursing assistants; maintenance and powerplant occupations—general maintenance workers, maintenance electricians, maintenance electronics technicians, maintenance machinists, machinery maintenance mechanics, motor vehicle maintenance

mechanics, tool and die makers; custodial and

material movement occupations—forklift operators, guards, janitors, material handling laborers,

order fillers, shipping and receiving clerks,

truckdrivers, and warehouse specialists. 6 See, for example, Appendix B. Occupational

Descriptions, Occupational Compensation Survey: Pay Only, State of Alaska, Bulletin 3085-

32, Bureau of Labor Statistics, July 1996. 7

 See, for example, Robert W. VanGiezen,

“Occupational Pay by Employment Size,” ComPercent of

published

occupational

work levels

in

Alaska

Percent of

published

occupational

work levels

in

Anchorage

Relative

standard error

(in percent)

pensation and Working Conditions, Spring 1998,

pp. 28-36. 8

 Occupations and occupational levels with

fewer than 100 workers were not included in this

article. 9

 Occupational Compensation Survey: Pay

Only, State of Alaska, Bulletin 3085-32, Bureau

of Labor Statistics, July 1996; and Anchorage,

Alaska, Metropolitan Area, Bulletin 3085-30,

Bureau of Labor Statistics, July 1996. 10 Estimates of sample error were not available for many of the Anchorage jobs discussed in

this article. For this reason, most data comparisons made in this article for Anchorage jobs were

not evaluated for statistical significance. 11 BLS categorizes truckdrivers by the type

and rated capacity of the vehicle they drive as follows: Light trucks—under 1.5 tons, usually 4

wheels; heavy trucks—over 4 tons, usually 10

wheels; and tractor trailers—separable cab and

trailer, usually 18 wheels. 12 Out-of-scope establishments primarily include those in agriculture, private households, and

the self-employed. 13 The standard error indicates the precision

with which an estimate from a particular sample

approximates the average result of all possible

samples. The relative standard error is the standard error divided by the estimate. The smaller

the relative error, the greater the reliability of the

estimate.

The sampling errors mentioned

above are measurable, but nonsampling errors are not. Nonsampling errors stem from many sources, such as

the inability to obtain information

from some establishments, difficulties

with survey definitions, and the inability of respondents to provide accurate

data. While very difficult to measure,

such errors are expected to be minimal due to the high response rate, the

extensive training of field economists

who collect the data, and constant, rigorous review of both the occupational

definitions and the collected data.