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LMI Myth Busting Series

July 2018

LMI Myth Busting: The Source of Occupational Wage Estimates

Myth:

Occupational wage estimates available from LMIC reflect current wages being offered by employers, since they are based on wages listed in job openings.

Busted:

The occupational wage estimates available from LMIC and in the virtual labor market data system (via LMIC's Occupational Wages Menu) are NOT based on wages listed in current job openings. Although the virtual data system does have data available on current job openings, often including an average wage offered, a large number of employers choose NOT to list the starting wage. LMIC does not recommend using the wage data shown for current job openings, especially if the wage estimate is based on a low percentage of openings for which the wage was listed. (The virtual system indicates what percentage of openings included a wage.)

Instead, the occupational wage estimates available from LMIC are based on a statistical survey conducted in cooperation with the U.S. Bureau of Labor Statistics (BLS). Through the Occupational Employment Statistics (OES) program, LMIC collects wage data from South Dakota employers. For more than 800 occupations, the OES program produces estimates of the number of people employed in each occupation and the wages paid to them. Self-employed persons are not included in the estimates.

The OES survey uses a three-year data collection cycle; surveys are sent twice a year. Survey recipients are scientifically selected based on business activity, geographic location and worker levels (to ensure results reflect both small and larger employers). Wage data for prior years are aged to reflect current dollars using BLS’s Employer Cost Index. Over the three-year survey cycle, approximately 6,800 South Dakota establishments are contacted. For the most current survey year (2017), approximately 2,200 surveys were sent to establishments in South Dakota. More than 1,800 of the establishments responded, resulting in an 82 percent response rate, surpassing the BLS requirement of a 75 percent response rate. Those establishments responding accounted for 89 percent of the workers in the sample.

For more general information on the OES program, see frequently asked questions about OES on the BLS website. We would like to take this opportunity to thank all the South Dakota employers who voluntarily participate in the OES wage survey, making possible the availability of quality occupational wage estimates for South Dakota.

Check out other busted myths in our LMI Myth Busting Series.