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Earnings of Employees in the Woods & Poole Database

Earnings of Employees in the Woods & Poole Database

January 7, 2019

Earnings of employees are the sum of wages and salaries, other labor income, and proprietors’ income.  Earnings also include personal contributions for social insurance.  Historical earnings data are from the U.S. Department of Commerce, Bureau of Economic Analysis.  As with employment, earnings data are by place of work, so that earnings of an employee who works in one county but resides in another are counted in the county where the job is.

The two-digit NAICS sectors for earnings are defined in the 2002 North American Industry Classification System Manual.  Earnings data in the 2018 Woods & Poole database are no longer based on the Standard Industrial Classification (SIC) system definitions.  For the years 1969-2000 BEA provided earnings industry data by SIC rather than by NAICS;  Woods & Poole has estimated the NAICS industry data for 1969-2000 from the BEA SIC 1969-2000 earnings industry data and the NAICS earnings industry data for the years 2001 forward.  Current BEA data, based on the 2016 BEA revision, created a discontinuity in total earnings for the years 1969-2000 compared to 2001 forward;  earnings data in the Woods & Poole database retain this discontinuity.

As a rule, earnings (and employment) are classified in a given industry depending on the primary activity of the establishment.  For example, earnings of employees of a large oil company are classified in many different sectors depending on the specific establishment in which they worked, even though the company as a whole would be considered a mining company: earnings of employees at a refinery are in manufacturing;  earnings of employees at the company headquarters are in management;  pipeline operators earnings are in transportation;  and oil field workers earnings are in mining.  If a given establishment is engaged in activities in different sectors, the earnings of all employees are classified according to the primary activity of the establishment regardless of their actual occupations;  thus, the earnings of an administrative assistant for a trucking company are in transportation and the earnings of an accountant at a small plumbing company are in construction.  The main exception to this rule is the classification of earnings of government in the Woods & Poole database:  the earnings of all government employees are classified in Federal civilian, Federal military, or state and local government sectors, regardless of the usual classification of the establishment in which they work.

Earnings relates to workers’ compensation and is not a measure of company earnings or profits. Earnings-by-sector data are sometimes used as a surrogate variable for output by sector at the regional level where output data are not generally available.

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