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PayScale Releases Inaugural Compensation and Salary Index

New Quarterly PayScale Index tracks whether the price of workers, as represented by the wages they are paid, is changing over time; Index provides most accurate view on what employees are earning amidst turbulent economy
Seattle - October 12th, 2010 - PayScale, Inc. today announced the inaugural release of The PayScale Index that tracks quarterly compensation trends. Specifically, The PayScale Index follows changes in total cash compensation for full-time, private industry employees in the United States.

The PayScale Index utilizes a unique approach to trend measurement. Unlike indices such as the Consumer Price Index, which measures the prices of certain goods and services (periodically updated to reflect changes in buying habits of Americans), The PayScale Index uses data on all private sector full-time employees working in a given time period.

PayScale has performed a detailed analysis of how various compensable factors, like work experience, education, employment setting and job responsibilities affect pay. This analysis is based on PayScale's extensive data of over 23 million employee profiles, accounting for 250 compensable factors for 7,000 unique job titles, which show how the pay of actual workers varies with each of these factors.

"The greater accuracy of The PayScale Index is critical for understanding consumer confidence: for those lucky enough to still have a job, The PayScale Index shows that getting a pay cut or no raise over the last two years has been the typical experience," says Al Lee, Director of Quantitative Analysis at PayScale.

The PayScale Index also examines quarterly changes in the pay of employed workers across 15 private industry categories separately, 20 metropolitan areas, and across company sizes of less than 100 employees, 100-1500 employees, and more than 1500 employees. These industries include: Arts, Entertainment & Recreation; Business Operation Support Services; Construction; Finance & Insurance; Food Services & Accommodation; Healthcare & Social Assistance; Information, Media & Telecommunications; Manufacturing; Mining; Professional, Scientific & Tech Services; Real Estate; Retail; Transportation & Warehousing/Storage; Utilities; and Wholesale Trade.

Index highlights include:
  • Since 2006, wages are up only 4.0% for private sector employees, while the core Consumer Price Index has increased 7.5%
    • In 2009 actual (nominal) wages dropped 1.5%, and have been flat since; core CPI has continued to rise
    • The typical private sector workers earns 3.5% less in real buying power now, while doing the same job, than they earned in 2006.
    • Wages in only one industry, Mining and Oil & Gas Extraction (9.1%), have outpaced inflation since 2006. 
  • Over the last 12 months through Q3 2010, nationally wages are up only 0.1%
    • Only 5 of 20 metros have 12 month wage increases greater than 0.1%
      • Baltimore (1.6%), St. Louis (0.6%), Washington DC (0.5%), New York City (0.4%), and Phoenix (0.4%)
    • Only 6 of 15 industries have 12 month wage increases greater than 0.1%
      • Utilities (0.8%), Mining & Oil & Gas Extraction (0.6%), Finance (0.5%), Healthcare (0.2%), Transportation (0.2%) and Retail (0.2%)
  • The worst period for full-time private sector employee wages since 2006 were the six months between Q4 2008 and Q2 2009, when wages dropped 1.3%.
  • In the latest quarter, Q3 2010, there is no sign nationally of increases in actual wages or buying power:
    • Actual wages are down 0.1% from the previous quarter
    • Buying power is down 0.2% from the previous quarter
"The PayScale Index shows the US private sector workforce is subject to the laws of supply and demand: typical wages as measured by the PayScale Index dropped as unemployment rose in the current recession. The unique market based real-time approach of The PayScale Index makes it uniquely capable of identifying these important trends in the economy," said Lee.

About PayScale ( is the leading online provider of employee compensation data. With the world's largest database of individual compensation profiles, PayScale provides an immediate and precise snapshot of current market salaries to employees and employers. PayScale's patent-pending, real-time profiling technology collects and indexes employee pay attributes worldwide and makes this compensation data available through its online salary tools and salary benchmarking

 reports. PayScale was founded in 2002 and is headquartered in Seattle. For more information, visit: About PayScale.

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