Including overtime hours and pay in payroll and hours reporting causes CES average hourly earnings estimates to be higher than a simple wage rate. As companies in the sample increase the use of overtime, there is also an increase in the gap between the average hourly earnings reported by CES and wage rates. Hence, in industry groups in which overtime premiums are commonly used, changes in the use of overtime by employers will have an important impact on CES hourly earnings estimates. Average weekly earnings estimates are produced by multiplying average weekly hours estimates by average hourly earnings estimates. Hence, average weekly earnings are affected by all of those factors that impact the component estimates.
Structural changes can have a particularly important impact on average weekly earnings.
This trend has reduced the average weekly hours in these industry groups. Since, average weekly hours is a component in producing average weekly earnings estimates, this change has had a significant impact on weekly earnings figures for affected industry groups. CES hours and earnings estimates do not undergo the same yearly benchmark process carried out on employment data. With no universe data available to establish new benchmark levels, both the base level and measures of change for hours and earnings estimates are produced solely from sample data. Changes in the composition of the sample may have an impact on both monthly rates of change as well as the over-all level of hours and earnings estimates for particular industry groupings.