Group and division averages are impacted by changes to the workweek of component industries, including an increase or decrease in the use of part-time workers or overtime hours. Average hourly earnings are based on gross earnings. As such, 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 using an incentive based plan. Averages for industry groups and divisions will be impacted by changes in earnings for the individual industries making up those groups and divisions. Average hourly earnings as reported by CES should not be interpreted as wage rates.
Wage rates are an amount of income stipulated for a given unit of work or time.
CES average hourly earnings are the actual gross return to the worker during a given period of time. CES estimates include premiums not included in wage rates. The most common difference is the inclusion of overtime premiums in CES average hourly earnings. 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.