Table 1. Pay relatives for occupational groups, private Industry, United States, 1994

Occupational group
Industry Division Admini Main- Material
Professional | {Mie | Technical | Clerical | ionance | Movement

100 100 100 100 100 100
100 102 99 103 9 96
102 - - - : -
100 101 99 103 99 96
99 100 99 103 99 97
103 103 101 102 98 a7
100 99 103 99 108 102
103 105 13 109 15 110

9 100 - 100 91
- - 97 - 93 - 96
France. insurance, and real estate ...... : 96 - 98 - -
99 99 100 98 1 82

NOTE: Dashes indicate that data did not meet publication crt-
teria. For each occupational group, average pay level for private
industry in the United States = 100.

Table 2. Average weekly eamings and relative! pay levels of selected professional, administrative, tochalent and
clerical occupations, private industry, goods-producing and service-producing Industries, September 1994

Occupation and levels Private industry ‘Goods-producing Service-producing
Professional
$774 $ 786 (102) $ 763 (99)
1368 1474 (108) 1343 (98)
1099 1094 (100) 4113 (101)
Administrative
647 647 (100) 644 (100)
624 643 (103) 617 (99)
892 912 (102) 886 (98)
765 787 (103) 751 (98)
Technical
434 445 (103) 431 (99)
479 464 (97) 506 (106)
739 731 (99) 760 (103)
Clerical

359 363 (101) 958 (100)
314 313 (100) 315 (100)
328 365 (111) 312 (95)
317 323 (102) 316 (100)
538 556 (103) 529 (95)
338 942 (101) 336 (99)
451 465 (103) 449 (100)

1 Relative pay levels, shown in parentheses, indicate the example, average pay for accountant Ill in goods-producing
relative pay of goods-producing and service-producing indus- industries is 2 percent higher than the nationwide average for
tries as a percent of all industry pay in the United States. For the job.

33. Compensation and Working Conditions June 1996



their service-producing counterparts.
This pay advantage is caused by
differences in the distribution of
workers in this job compared to that
of most other maintenance occupa-
tions. The relatively high-paying
transportation and utilities industry
employed over half of maintenance
workers in the occupations shown in
table 3 with one exception—less
than 3 percent of general mainte-
nance workers were employed in
transportation and utilities.

There was a dramatic difference,
however, in the earnings of janitors
and guards, level I, in the goods-
versus service-producing industries.
Janitors in goods-producing estab-
lishments enjoyed a nearly 50-
percent pay advantage, and guards,
level I, nearly a 40-percent advan-
tage over comparable workers in
service-producing industries. This is
in striking contrast to the pay
advantage of other blue-collar
workers found overall in the service-
producing sector.

Pay differences within goods-
producing Industries

Earnings were 2 percent higher in
the construction industry for
professional workers, the only
occupational group for which a

) Employment and Earnings, June 1995, page
"2 Employment and Earnings, June 1995,

comparison was available, than they
were for such workers elsewhere
within the goods-producing sector.
Pay relatives for occupational groups
studied separately within manufac-
turing industries were relatively
uniform, ranging from 3 percent
below to 3 percent above the
national average. (See table 1.)
Earnings were higher in nondurable
industries for professional, adminis-
trative, and technical workers. For
clerical and maintenance workers,
earnings were higher in durable
manufacturing industries.

Pay differences within service-
Producing industries
Comparisons of earnings differen-
tials between goods- and service-
producing industries often mask
differences within these major
industries. And, those within
service-producing industries were
larger than those between the goods-
Producing and service-producing
sectors. (See table 1.) Pay relatives
in transportation and utilities were
the highest of all occupational
groups studied. The earnings
advantage enjoyed by transportation
and utilities workers ranged from 4
percent for the professional workers
to 34 percent for material movement

—ENDNOTES—

pages 69-72.
¥ The survey excludes establishments with
fewer than 50 workers, the Federal Government,

occupations. Earnings advantages
were 8 percent for administrative
workers, 13 percent for the technical
workers, 17 percent for clerical
workers, and 26 percent for mainte-
nance workers. Pay relatives were
lowest in the services industries for
blue-collar and technical workers;
for administrative and clerical
workers, earnings were lowest in
retail trade.

Conclusion

Workers in goods-producing
industries generally enjoyed a pay
advantage in white-collar occupa-
tions while earnings for blue-collar
jobs were higher in service-produc-
ing industries. Most workers in
goods-producing industries were
employed in manufacturing. The
pay advantage enjoyed by workers in
service-producing industries masked
the wide dispersion between the high
earings of workers in transportation
and utilities and the low earings in
tetail trade and services. Service-
producing occupations which
enjoyed a pay advantage generally
were dominated by workers in
transportation and utilities. Pay in
service-producing industries was
lower where employment in retail
trade and services was predominant,

and private houscholds. Alaska and Hawaii are
also exchided.

Compensation and Working Conditions, June 1996 32



Tabie 3. Average weekly earnings and relative! pay levels of selected blue-collar: occupations, private industry, goods-
Producing and service-producing industries, September 1994

Occupation Private industry Goods-producing Sarvice-producing
Maintenance
$10.16 $10.84 (107) $ 9.86 (97)
17.73 17.63 (99) 18.19 (103)
17.52 16.75 (96) 17.92 (102)
16.58 16.12 (97) 19.62 (118)
16.28 15.87 (98) 18.95 (117)
15.33 14.71 (96) 15.58 (102)
18.94 19.11 (101) 17.46 (92)
Material Movement
$10.48 10.36 (99) $11.02 (105)
9.18 9.30 (101) 9.06 (99)
9.24 9.06 (98) 9.32 (101)
10.13 10.32 (102) 9.86 (97)
13.69 12.25 (89) 14.22 (104)
12.01 11.45 (95) 12.35 (103)
Service
6.62 9.04 (137) 6.47 (98)
7A7 10.31 (144) 6.79 (95)

* Relative pay levels, shown in parenthesis, indicate the rela- ample, average pay for general maintenance worker in goods-
tive pay of goods-producing and service-producing industries producing industries is 7 percent higher than the nationwide av-
‘88 a percent of all industry pay in the United States. For ex- ‘erage for the job.

Compensation and Working Conditions June 1996 34



Occupational Pay in
Private Goods- and

Service-

Producing Industries BY ROBERT W. VAN GIEZEN

ay advantages generally vary by occupational group—white-collar positions tend

to be higher paying in goods-producing industries, while blue-collar jobs are the

higher paid ones in service-producing industries. However, the pay advantage in
the service-producing sector masks the wide dispersion between the high earnings of
workers in transportation and utilities establishments and the low earnings in retail trade

and service outlets.

This article focuses on the
earnings differences between the two
sectors and the differences in
earnings within the sectors.

Introduction

The private sector of the economy
comprises the goods-producing and
the service-producing sectors. The
goods-producing sector consists of
three major industries—mining,
construction, and manufacturing.
Within manufacturing are two major
subcategories: durable goods and
nondurable goods manufacturing.
Durable goods manufacturers
produce such items as furniture,
machinery, and transportation
equipment. Examples of nondurable
manufacturing include food and
tobacco products, textiles and
apparel, and paper and petroleum
products. The service-producing
sector consists of transportation and
utilities; wholesale trade; retail

Robert W. Van Giezen is an economist in the
Division of Compensation Data Analysis and Plan-
ning, Bureau of Labor Statistics. Telephone (202)
606-6205.

This article and the following one,“Occupational Pay Across Regions
in 1994” by John Buckley, focus on selected occupational pay data
available from the Bureau’s Occupational Compensation Survey Program
(OCSP). A primary goal of the program is to produce detailed locality
pay data for selected occupations. Regional and national data are
obtained by sampling 90 metropolitan and 70 nonmetropolitan areas.
Each year the OCSP produces a national summary bulletin that contains
extensive tabular data from the surveys. The summary articles presented
here highlight aspects of the surveys nf treated in the national summary.
Robert Van Giezen’s article compares pay in goods-producing industries
to that in service-producing industries. John Buckley discusses pay
differences among the Nation’s four regions for selected high-incidence jobs.

For a more complete discussion of the scope of the OCSP and the
occupational definitions used in the survey, see Occupational Compensa-
tion Survey: National Summary, 1994, Bulletin 2479, Bureau of Labor
Statistics, June 1996.

-Editor’s Note-

trade; finance, insurance, and real dominated by manufacturing to one

estate; and services. Within the dominated by service-producing
service-producing sector are such industries. Data from the Bureau's
diverse industries as railroads, payroll series shed light on these
banks, schools, and hospitals. changes.

Employment and pay trends
The American economy has

undergone major changes over the

past half century, evolving from one

29 Compensation and Working Conditions, June 1996

In 1945, a little over half of the
34 million employees on nonfarm
payrolls in private industry were
employed in goods-producing
industries, with nearly 90 percent of



them working in manufacturing.'
By 1994, only 1 in 4 of the nearly 95
million private sector workers were
employed in goods-producing
industries, the manufacturing
component of which had declined to
a little over three-fourths of the
sector’s employment. In contrast,
the service-producing sector under-
went dramatic growth over the last
several decades and by 1994 ac-
counted for three-fourths of the
workers in private industry. Growth
has been especially strong in the
Tetail trade; finance, insurance, and
real estate; and service industries.
Workers in service industries
account for one-third of the private
economy’s workers compared with
one-eighth in 1945,

Average hourly earnings for all
private sector production or
nonsupervisory workers in 1964 was
$2.36 and ranged from a low of
$1.75 in retail trade to a high of
$3.55 in construction. Average
hourly earnings in 1994 had risen to
$12.68 for nonsupervisory workers
in goods-producing industries, 20
percent higher than the average
hourly pay of $10.48 received by
workers in service-producing
industries. Average hourly pay for
workers in service-producing
industries ranged from $7.49 in
Tetail trade to $13.66 in transporta-
tion and utilities.”

In the last 30 years, the pay
relationships between goods- and
service-producing occupations also
have changed. Relative earings for
construction and retail trade dropped
between 1964 and 1994. For
example, in 1994, retail trade
workers earned 67 percent of the
average pay of all private sector
workers, a drop from the 74-percent
level in 1964. (See chart 1.) The
earnings advantage of construction
workers dropped from 50 percent to
32 percent above all private workers
for the same period. Relative
earnings for other industry divisions
increased. This was especially tue
for service workers whose pay
disadvantage rose from 18 percent

below to 1 percent below the average
for all private sector workers.

Current employment levels

Employment data from the
Bureau’s Occupational Compensa-
tion Survey Program (OCSP) show
similar patterns.? In 1994, private
sector establishments covered by the
survey included nearly 50 million
workers, of whom approximately 16
million were in goods-producing and
34 million in service-producing
industries. Although goods-
producing industries account for
about 32 percent of total employ-
ment, the higher proportion of
workers in these industries recorded
by OCSP is due to the lower propor-
tion of these workers in smaller
establishments excluded from the
OCSP. (See chart 2.)

There are major differences in the
composition between goods- and
service-producing industries within
individual area economies which
heavily influence pay levels. Among
the largest 10 metropolitan areas, the
proportion of goods- to service-
producing industry employment
varies widely. The area with the
highest proportion of employment in
goods-producing industries is Detroit
with 37 percent, where nearly all
employees are in manufacturing.
The area with the largest percentage
of private industry workers in
service-producing industries is
Washington, with over 90 percent.
The average percentage of the work
force in service-producing industries
was 77.5 percent in the 10 largest
metropolitan areas.

Pay differences between
goods- and service-producing
industries

Surveys of occupational pay are
conducted in 160 different localities.
Data from these areas are sampled to
represent the United States, exclud-
ing Alaska and Hawaii. To facilitate
pay comparisons, the Bureau
developed measures of relative pay
for broad occupational groups.
These measures, or pay relatives,

express pay levels as a percent of the
national pay level. Pay relatives are
computed by dividing pay for an
occupational group in a particular
industry by the corresponding
national pay level and multiplying
by 100. For example, a pay relative
of 105 indicates that pay rates in the
industry averaged five percent above
national pay levels.

Pay differences between goods-
and service-producing industries
vary by occupational group. (See
table 1.) In goods-producing
industries, white-collar administra-
tive and clerical workers enjoyed a
Pay advantage of 3 and 4 percentage
Points, respectively, over their
counterparts in service industries.
While earning levels for professional
workers were nearly identical in
goods- and service-producing
industries, technical workers
averaged a 4-percent pay advantage
in the service-producing sector.
Among blue-collar occupational
groups, service-producing industries
were higher paid in general, with
material movement occupations
enjoying a 6-percentage point
advantage and maintenance workers
enjoying a 7-point advantage.

Differences also were found
among specific professional and
administrative occupations. Earn-
ings were generally higher in goods-
producing industries for white-collar
professional, administrative, and
clerical occupations. (See table 2.)
However, for the job with the
greatest number of workers, engi-
neer, level IV, there was a small pay
advantage to workers in service-
producing industries. (See box in the
following article regarding survey
occupations and work levels.)

Among the blue-collar occupa-
tions, the pay advantage of service-
producing workers described above
is generally consistent with that
described for the maintenance and
material groups described above.
(See table 3.) For general mainte-
nance workers, however, employees
in goods-producing industries enjoy
a 10-percent pay advantage over

Compensation and Working Conditions June 1996 30



Chart |. Relative earnings of private sector production
or nonsupervisory workers by industry division, 1964
and 1994

(All private Industry = 100 percent)

Chart 2. Workers covered by the Occupational
Compensation Survey program by private industry division,

September 1994
Transportation Manufacturing
and utilities
7%
Wholesale trade
4%
Mining and
construction
3%
Retail trade
20%
x
Finance
8%

(All private industry = 100 percent)

31 Compensation and Working Conditions June 1996