U.S. Bureau of Labor Statistics

New England Information Office

OCCUPATIONAL EMPLOYMENT AND WAGES IN BOSTON-CAMBRIDGE-QUINCY, MASSACHUSETTS, MAY 2007

The Boston metropolitan area (1) had an overall average (mean) hourly wage of $24.87, significantly above the national average of $19.56 in May 2007, according to the U.S. Department of Labor's Bureau of Labor Statistics. Regional Commissioner Denis M. McSweeney noted that after testing for statistical significance, wages in the local area were measurably higher than their respective national averages for 21 of the 22 major occupational groups. In addition, when compared to the national distribution, local employment was more highly concentrated in 9 of the 22 occupational groups including 9 of the 10 management, professional, and related occupational groups(2)Eight occupational groups had local employment shares significantly below their national representation, while the remaining five showed no statistically significant employment share difference. (See table A and box note at end of release.)

These estimates of employment and wages are from the Occupational Employment Statistics (OES) Survey, a Federal-State cooperative program between BLS and State Workforce Agencies, in this case the Commonwealth of Massachusetts Division of Unemployment Assistance. The OES survey provides estimates of employment and hourly and annual wages for wage and salary workers in 22 major occupational groups and 801 non-military detailed occupations for the nation, states, metropolitan statistical areas, metropolitan divisions, and nonmetropolitan areas.

Management and legal occupations were the two highest-paid occupational groups in the Boston-Cambridge-Quincy area in May 2007, with those in management averaging $54.58 an hour and those in legal occupations, $47.96. (See chart A and table A.) Nationwide, these were also the two highest-paying groups with earnings of $46.22 in management and $42.53 in legal occupations.

Locally, two of the higher-paid occupations within the management group were chief executives and natural science managers earning hourly wages of $77.90 and $65.76, respectively. At the lower end of the wage scale were education administrators, preschool and child care center/program ($24.33) and food service managers ($26.04).

Lawyers, at $61.86 an hour, were among the better-paid legal occupations in the Boston area, while law clerks were at the lower end averaging $23.16. (Detailed occupational data are presented in table 1.)

(1) Statistical significance testing at the 90-percent confidence level.

Five occupational groups had average wages that were clustered between $35.00 and $41.00 an hour: life, physical, and social science; business and financial operations; healthcare practitioner and technical; architecture and engineering; and computer and mathematical science.

Chart A. Average hourly wage in the United States and the Boston metropolitan area by major occupational group

Workers in the construction and extraction occupational group in Boston were also well paid, averaging $25.03 per hour, more than 28 percent above the national average of $19.53. Some of the better-paid occupations within this group included plumbers, pipefitters, and steamfitters ($28.56); electricians ($27.03); and carpenters ($24.80).

With an average local wage of $11.28 per hour, food preparation and serving related occupations were one of the lower-paid occupational groups in Boston. Nationwide, food preparation and serving related was also among the lowest-paying occupational groups with an average wage of $9.35. Chefs and head cooks, averaging $21.72 an hour, were among the higher-paid occupations in this group. On the other end of the wage scale, combined food preparation and serving workers, including fast food earned $9.21 per hour in Boston.

With more than 2.4 million employed in the Boston metropolitan area, the largest major occupational group was office and administrative support with 424,860 jobs representing 17.2 percent of area employment. (See chart B and table A.) This group's local employment share did not differ significantly from the U.S. average of 17.3 percent. Nationally, this was also the largest occupational group.

As noted, 9 of the 22 occupational groups had higher-than-average concentrations in the Boston area. More specifically, 9 of the 10 occupational groups classified as management, professional, and related had higher employment shares locally than nationally, with education, training, and library being the only exception. For example, the healthcare practitioner and technical occupational group accounted for 6.3 percent of the Boston area employment, but 5.1 percent of United States employment. Similarly, the management occupational group made up 6.2 percent of local employment, but 4.5 percent nationally. The computer and mathematical science group had a local employment share of 4.5 percent compared to the 2.4 percent national share.

Chart B Employment distribution in the United States and the Boston metropolitan area by major occupational group

In contrast, 8 of the 22 occupational groups had lower-than-average concentrations of employment within the Boston metropolitan area. Production and transportation and material moving jobs accounted for 5.0 and 4.9 percent, respectively, of local area employment, compared with 7.6 and 7.2 percent, respectively, nationally. Within the production group, three occupations accounted for nearly one-fifth of local employment- team assemblers, electrical and electronic equipment assemblers, and inspectors, testers, sorters, samplers, and weighers. Laborers and freight, stock, and material movers, hand made up one-quarter of the local employment in the transportation and material moving occupational group. The construction and extraction occupational group made up 3.3 percent of local employment, measurably below this group's national employment share of 5.0 percent. Within the construction and extraction occupational group, three occupations accounted for 42 percent of local employment: carpenters, construction laborers, and electricians.

The Boston metropolitan area has a higher-than-average concentration of several occupational groups commonly found in "high-tech" industries which employ scientific, engineering, and technician workers: computer and mathematical science; architecture and engineering; and life, physical, and science. For convenience, these three occupational groups have been labeled "high-tech" occupations(3)Among this high-tech grouping, it can easily be seen that the computer and mathematical science occupational group accounted for a significantly larger share of local employment in the Boston area (4.5 percent) when compared to the national average (2.4 percent). Likewise, in the architecture and engineering group the local employment share was 2.8 percent versus 1.9 percent nationally, and in the life, physical, and science group, it was 1.7 percent locally versus 0.9 percent nationwide.

Though the Boston area has one of the largest concentrations of high-tech occupations in the country, there are other metropolitan areas with similar high employment shares in the three occupational groups being examined. Two of these areas - San Francisco and Washington, D.C.(4) - were chosen for comparison with Boston, not only because of the higher-than-average presence of high-tech occupations, but because of their similarity in employment size. The following examines average hourly wages for the three "high-tech" occupational groups in these three metropolitan areas.

Like Boston, the San Francisco and Washington, D.C. metropolitan areas reported average hourly wages that were significantly above the national averages of the three high-tech occupational groups. (See table B.) For instance, hourly wages for the computer and mathematical science occupational group in San Francisco ($42.27) was nearly 22 percent higher than the national average and in both Boston ($40.94) and Washington, D.C. ($40.90), it was almost 18 percent higher. The life, physical, and social science occupational group earned 32 percent more in Washington ($39.47), nearly 23 percent more in San Francisco ($36.65), and approximately 18 percent more in Boston ($35.06) than it did nationally.

* Indicates a wage that differs significantly from the national wage at the 90-percent confidence level.

In a comparison of high-tech occupational wages across the three areas, San Francisco and Washington had significantly higher wages than Boston in two of the three occupational groups-architecture and engineering and life, physical, and social science. (See table C.) For example, the average hourly wage for architecture and engineering occupations in San Francisco, at $39.39, was 4.5 percent higher than the wage in Boston ($37.71). For workers in life, physical, and social science occupations, the average wage earned in Washington ($39.47) was 12.6 percent more than the comparable wage in Boston ($35.06). In the remaining occupational group, computer and mathematical science, the average wage in San Francisco surpassed that in Boston by 3.2 percent, but the average wage for such workers in Washington did not differ significantly from that in Boston.

* Indicates a wage that differs significantly from the Boston, MA wage at the 90-percent confidence level.

TECHNICAL NOTE

The Occupational Employment Statistics (OES) survey is a semiannual mail survey measuring occupational employment and wage rates for wage and salary workers in nonfarm establishments in the United States. Guam, Puerto Rico, and the Virgin Islands also are surveyed, but their data are not included in this release. OES estimates are constructed from a sample of about 1.2 million establishments. Forms are mailed to approximately 200,000 establishments in May and November of each year for a 3-year period. The nationwide response rate for the May 2007 survey was 77.9 percent based on establishments and 73.5 percent based on employment. The survey included establishments sampled in the May 2007, November 2006, May 2006, November 2005, May 2005, and November 2004 semiannual panels. The sample in the Boston-Cambridge-Quincy metropolitan area included 19,950 establishments with a response rate of 73 percent.

The OES survey uses the Office of Management and Budget's (OMB) occupational classification system, the Standard Occupational Classification (SOC) system. The SOC system is the first OMB-required occupational classification system for Federal agencies. The OES survey categorizes workers in 1 of 801 detailed occupations. Together, these detailed occupations make up 23 major occupational groups, 22 of which are covered in this release. The one exception is military specific occupations which are not included in the OES survey.

For more information about the SOC system, please see the Bureau of Labor Statistics (BLS) Web site at http://www.bls.gov/soc/.

The OES survey uses the North American Industry Classification System (NAICS). For more information about NAICS, see the BLS Web site at http://www.bls.gov/bls/naics.htm.

BLS funds the survey and provides the procedures and technical support, while the State Workforce Agencies (SWAs) collect most of the data. BLS produces cross-industry and industry-specific estimates for the Nation, States, and metropolitan statistical areas (MSAs). Industry-specific estimates are produced at the NAICS sector, 3-digit, 4-digit, and selected 5-digit industry levels. BLS releases all cross-industry and national estimates; the SWAs release industry-specific estimates at the State and MSA levels.

State Unemployment Insurance (UI) files provide the universe from which the OES survey draws its sample. Employment benchmarks are obtained from reports submitted by employers to the UI program. The OES survey sample is stratified by metropolitan and nonmetropolitan areas and industry. Samples selected in panels prior to May 2005 were stratified using MSA definitions based on the 1990 Metropolitan Statistical Area standards. Beginning with the May 2005 panel, the sample was stratified using new MSA definitions based on the 2000 Metropolitan Statistical Area standards.

Occupational employment is the estimate of total wage and salary employment in an occupation across the industries surveyed. The OES survey defines employment as the number of workers who can be classified as full- or part-time employees, including workers on paid vacations or other types of paid leave; workers on unpaid short-term absences; salaried officers, executives, and staff members of incorporated firms; employees temporarily assigned to other units; and employees for whom the reporting unit is their permanent duty station regardless of whether that unit prepares their paycheck.

Wagesfor the OES survey are straight-time, gross pay, exclusive of premium pay. Base rate, cost-of-living allowances, guaranteed pay, hazardous-duty pay, incentive pay including commissions and production bonuses, tips, and on-call pay are included. Excluded are: back pay, jury duty pay, overtime pay, severance pay, shift differentials, non-production bonuses, employer cost for supplementary benefits, and tuition reimbursements.

Mean hourly wage.The mean hourly wage rate for an occupation is the total wages that all workers in the occupation earn in an hour divided by the total employment of the occupation. To calculate the mean hourly wage of each occupation, total weighted hourly wages are summed across all intervals and divided by the occupation's weighted survey employment. The mean wage for each interval is based on occupational wage data collected by the BLS Office of Compensation and Working Conditions for the National Compensation Survey (NCS).

Annual Wage. Many employees are paid at an hourly rate by their employers and may work more than or less than 40 hours per week. Annual wage estimates for most occupations in this release are calculated by multiplying the mean hourly wage by a "year-round, full-time" figure of 2,080 hours (52 weeks by 40 hours). Thus, annual wage estimates may not represent the actual annual pay received by the employee if they work more or less than 2,080 hours per year. Some workers typically work less than fulltime, year round. For these occupations, the OES survey collects and reports either the annual salary or the hourly wage rate, depending on how the occupation is typically paid, but not both. For example, teachers, flight attendants, and pilots may be paid an annual salary, but do not work the usual 2,080 hours per year. In this case, an annual salary is reported. Other workers, such as entertainment workers, are paid hourly rates, but generally do not work full time, year round. For these workers, only an hourly wage is reported.

Hourly versus Annual Wage Reporting. For each occupation, respondents are asked to report the number of employees paid within specific wage intervals. The intervals are defined both as hourly rates and the corresponding annual rates, where the annual rate for an occupation is calculated by multiplying the hourly wage rate by a typical work year of 2,080 hours. The responding establishment can reference either the hourly or the annual rate for full-time workers, but they are instructed to report the hourly rate for part-time workers.

Each OES panel includes approximately 200,000 establishments. The OES survey is designed to produce estimates using six panels (3 years) of data. The full six-panel sample of 1.2 million establishments allows the production of estimates at detailed levels of geography, industry, and occupation.

Wage Updating. Significant reductions in sampling errors are obtained by combining six panels of data, particularly for small geographic areas and occupations. Wages for the current panel need no adjustment. However, wages in the five previous panels need to be updated to the current panel's reference period.

The OES program uses the BLS Employment Cost Index (ECI) to adjust survey data from prior panels before combining them with the current panel's data. The wage updating procedure adjusts each detailed occupation's wage rate, as measured in the earlier panel, according to the average movement of its broader occupational division. The procedure assumes that there are no major differences by geography, industry, or detailed occupation within the occupational division.

May 2007 OES survey estimates. The May 2007 OES survey estimates are based on all data collected from establishments in the May 2007, November 2006, May 2006, November 2005, May 2005, November 2004 semiannual samples.

Reliability of the estimates. Estimates calculated from a sample survey are subject to two types of error: sampling and nonsampling. Sampling error occurs when estimates are calculated from a subset (that is, a sample) of the population instead of the full population. When a sample of the population is surveyed, there is a chance that the sample estimate of the characteristic of interest may differ from the population value of that characteristic. Differences between the sample estimate and the population value will vary depending on the sample selected. This variability can be estimated by calculating the standard error (SE) of the sample estimate. If we were to repeat the sampling and estimation process countless times using the same survey design, approximately 90 percent of the intervals created by adding and subtracting 1.645 SEs from the sample estimate would include the population value. These intervals are called 90-percent confidence intervals. The OES survey, however, usually uses the relative standard error (RSE) of a sample estimate instead of its SE to measure sampling error. RSE is defined as the SE of a sample estimate divided by the sample estimate itself. This statistic provides the user with a measure of the relative precision of the sample estimate. RSEs are calculated for both occupational employment and mean wage rate estimates. Occupational employment RSEs are calculated using a subsample, random group replication technique called the jackknife. Mean wage rate RSEs are calculated using a variance components model that accounts for both the observed and unobserved components of the wage data. The variances of the unobserved components are estimated using wage data from the BLS National Compensation Survey. In general, estimates based on many establishments have lower RSEs than estimates based on few establishments. If the distributional assumptions of the models are violated, the resulting confidence intervals may not reflect the prescribed level of confidence.

Nonsampling error occurs for a variety of reasons, none of which are directly connected to sampling. Examples of nonsampling error include: nonresponse, data incorrectly reported by the respondent, mistakes made in entering collected data into the database, and mistakes made in editing and processing the collected data.

The May 2007 OES national data by occupation, comparable to data in table 1, are available on the BLS Web site at http://www.bls.gov/oes. Users also may access each occupation's definition and percentile wages. The May 2007 cross-industry data for States and metropolitan areas are also available on the BLS Web site, as are the industry staffing patterns at the sector, 3-, 4-, and selected 5-digit NAICS levels. These data include industry-specific occupational employment and wage data. A more detailed technical note for OES is available at http://www.bls.gov/oes/#news.

OES data are available on our regional web page at http://www.bls.gov/ro1/. If you have additional questions, contact the BLS New England (Boston) Economic Analysis and Information Unit at 617-565-2327. This information will be made available to sensory impaired individuals upon request. Voice phone: (617) 565-2072, Federal Relay Services: 1-800-877-8339.

Upcoming Reduction in Sample Size of Occupational Employment Statistics Survey Due to budget constraints, Occupational Employment Statistics has reduced the sample size of the May 2008 panel by 20 percent. Because OES estimates are produced from 3 years of pooled data, this one-time sample reduction will affect estimates for May 2008, May 2009, and May 2010. This reduction is expected to decrease the number of published employment estimates by at least 5 percent, or about 25,000 estimates, and will decrease the accuracy of the remaining estimates. The number and quality of wage estimates also are expected to decline. These cutbacks are being implemented in response to a reduction in funding to the BLS that resulted from The 2008 Consolidated Appropriations Act enacted on December 26, 2007.