Question 1

1. Actual Wages & Salary Check

Accepted Answer

The actual wage data is used to develop the Salary Check tool, providing precise and updated salary information for different occupations. The quality of the Salary Check increases with the growing popularity of the WageIndicator websites and the number of submitted surveys.

Question 2

1.1 How are the actual wages of low-, medium-, high-skilled workers arrived at?

Accepted Answer

The application Wages in Context contrasts the assessment of the income situation of working individuals and to the cost of living of their families. Reported monthly earnings of workers in low-, medium-, and high-skilled occupations are obtained from the WageIndicator voluntary web surveys from the last five years. The definition of groups follows the one-digit ISCO-classification of occupations from 2008, where ISCO 1-3 are clustered into high-skilled, ISCO 4-8 into medium-skilled and ISCO 9 into low-skilled groups. The minimum and maximum values represent a typical wage range per occupation given by a variety of characteristics which influence the wage of workers.

Question 3

1.2 How does WageIndicator collect the data for the actual salary indications?

Accepted Answer

WageIndicator collects data by means of a voluntary web-based survey available at national WageIndicator sites. The WageIndicator questionnaire is offered (in 2021) in 47 languages and is operational in 140 countries. The survey questionnaire is similar to those used by statistical agencies for standard labor force surveys, it is user-friendly and consists of multiple-choice questions only. The collected data is anonymized and subject to strict security measures, safeguarding the privacy of the participating individual. In 30 countries with less strong internet WageIndicator also collects salary data on the basis of face-to-face surveys. This data is used for salary indications as well.

Question 4

1.3 Is the wage information reliable?

Accepted Answer

The wage information used for the calculation of Salary Checks and as presented in Wages in Context is based on voluntarily submitted data. Therefore 100% accuracy cannot and will not be guaranteed. WageIndicator encourages its respondents to provide accurate and precise information about their personal and employment characteristics, pointing out that they provide their professional peers with an improving Salary Check-tool, which they themselves profit from as well. And all along WageIndicator guarantees their anonymity. The Salary Check is updated twice a year. Wages in Context is updated four times a year. Through increasing participation in the Salary Surveys results improve so that they provide the most timely, accurate and actual wage information. In addition, before calculation the dataset is cleaned and compared to other relevant datasets applying universally accepted statistical methods. In this way WageIndicator eliminates from its datasets most non-trustworthy cases, such as for example extremely high or low hourly wages, and highly unlikely combinations such as starters boasting of astronomical earnings etc.

Question 5

1.4 What is an occupation? And what is an occupation group?

Accepted Answer

WageIndicator recognizes more than 1700 different occupations. Its classification of occupations is based on the International Standard Classification of Occupations (ISCO) provided by the International Labour Organization (ILO). WageIndicator follows the latest classification ISCO-08 released in March 2008, amending it whenever a more detailed classification is necessary. ISCO-08 classification is a tool for organizing jobs into a clearly defined set of groups according to the tasks and duties undertaken on the job. ILO classifies occupations into smaller and larger occupation groups (either 4-digit, 3-digit, 2-digit or 1-digit ISCO code). The smallest occupation groups are referenced with a 4-digit ISCO-08 code. At the top level occupations are clustered into 10 major occupation groups described by the 1-digit ISCO-08 code. For example the occupation group Professionals includes the occupations: Biotechnologist, Aircraft engineer, Translator, University professor in social sciences, etc. Each of these occupations is then broken down into more narrowly defined ones, e.g. University professor in social sciences, into sociologist, politicologist, and the like. In addition to these ILO-defined groups WageIndicator defines exact occupations with 13-digit ISCO-08 codes, in such a way that the first 1,2,3 or 4 digits of the 13-digit ISCO-08 occupation code exactly match the ILO-defined occupation groups under which a certain occupation falls.

Question 6

1.5 How many observations suffice for a reliable estimate?

Accepted Answer

On the country level experience suggests that a minimum of 2000 observations is necessary to get reliable estimates to base the first Salary Checks on for a limited number of occupation groups. Observations must be reliable and wage records must comply with the definition of minimum wage. WageIndicator uses modern statistical methods to test whether the estimates are statistically meaningful, realistic and sufficient to base the wage profiles in a particular country on. This practice means there should be enough reliable observations - 20 minimum - for each of the 1700 exact (13-digit ISCO-08 code) occupations. However, if there are already some but not yet 20 observations for a particular occupation, it may be grouped on a higher level of aggregation in accordance with the ISCO-system: i.e. from the 4-digit up to the 1-digit ISCO-08 code, to the level with the minimum 20 observations. However, one should keep in mind that even though statistically tested, all salary indications are estimates and therefore include an element of uncertainty.

Question 7

1.6 How does data in a Salary Check differ from official national data?

Accepted Answer

From the experience gathered since the year 2000 it appears that WageIndicator data are comparable in quality with those from other surveys. However, they offer the additional advantage of becoming available more timely. WageIndicator data are on a half year basis used to calculate and update the online Salary Checks which reflect actual earnings in hundreds of occupations in all countries where WageIndicator has operations. The survey itself is versatile and detailed. Its results can be used to monitor and address significant developments in the labour market as they emerge. However, the survey is not based on a representative sample of the labour force, and therefore no conclusions can be drawn regarding the working population as a whole. In some countries groups in certain wage brackets, or of a certain age, may not visit the Internet as frequently as other groups. This accounts especially for those with very high pay and equally for those who are paid very low. * In developed countries the web survey participants are also younger, and they are more often full-timers and persons working in non-manual occupations. **Yet, WageIndicator data is proven to be highly apt for research into the income situation of specific occupational groups in the labor market.* Tijdens KG, Steinmetz S (2015) Is the Web a promising Tool for Data Collection in Developing Countries? Comparing Data from ten Web and Face-to-face Surveys from Africa, Asia and South America, International Journal of Social Research Methodology, DOI:10.1080/13645579.2015.1035875** Steinmetz S, Raess D, Tijdens KG, De Pedraza P (2013) Measuring wages worldwide – exploring the potentials and constraints of volunteer web surveys. In Sappleton N: Advancing Research Methods with New Media Technologies, p 100-119, IGI Global, Hershey PA

Question 8

1.7 How often are the Salary Check and wages in context updated?

Accepted Answer

Salary Checks are updated twice a year for all countries. The information in the Wages in Context application is updated four times a year.

Question 9

1.8 What happens with outdated data?

Accepted Answer

WageIndicator securely stores the data that have been collected. The outcomes shown are always the latest, replacing the older ones, based either on fresh data or on indexing data if no or not enough new data is available. The calculation of the national Salary Check is based on uninterrupted series of data collected over the last five years.

Question 10

1.9 Is the wage information in the Salary Check and Wages in Context controlled for inflation?

Accepted Answer

The calculation of the Salary Check is based on data collected over the last five years. In countries with low data intake earlier wage information may be adjusted by official data, if available by data on wage increases and if not by the official annual inflation rate. In some countries Statutory Minimum Wages or national poverty lines are updated very irregularly. These figures are enforced by law and hence adjusting for inflation would be pointless. The Wages in Context application always presents the latest Minimum Wages or national poverty lines. The estimates of Living Wages are based on data collected over the last 36 months. The adjustment for inflation is applied only exceptionally for countries with a very high inflation rate or after the currency re-denomination.

Question 11

1.10 Which period do the data for the Salary Check cover?

Accepted Answer

The calculation of the Salary Check tool is based on data collected over the last five years.

Question 12

1.11 Are overtime and bonuses included?

Accepted Answer

WageIndicator adjusts calculations for hours worked. Bonuses are not included in the calculation of wages.

Question 13

1.12 What about the difference between gross and net wages?

Accepted Answer

The calculations in the Salary Check represent gross hourly wages. The number of hours worked determines the gross monthly wage. Some respondents report only their net earnings and others report gross earnings, while some workers report both. Given such a variety of wage information WageIndicator applies the statistical techniques needed to impute gross earnings for every worker.

Question 14

1.13 Why are questions about personal characteristics included in the survey?

Accepted Answer

Personal characteristics significantly affect the wages individuals earn. Therefore, knowing these characteristics is essential to apply the statistical rules that assign wages to any occupation and worker’s profile.

Question 15

1.14 Why is gender important for wages?

Accepted Answer

WageIndicator outcomes show that men and women earn different wages, also when their occupations look similar. Even if men and women seem to carry out work of equal value, gender wage gaps show up that are mostly detrimental for women. If measured by weekly or monthly wages, these gaps may be caused by differences in hours worked. Yet differences often continue to exist to some extent when wages are measured in hourly wages. Such remaining differences may be due to differences in individual characteristics such as years of experience, educational attainment or skills. Other gender wage differences may be caused by differences in paid allowances and bonuses, or may be rooted in job classification and job evaluation systems. In the latter cases elements of discrimination of women may be assumed. Disentangling the various personal characteristics and wage elements available in the WageIndicator dataset may contribute to proof whether such assumptions are justified. Thus, by providing reliable information about empirically observed gender pay differences WageIndicator contributes to a more transparent and equitable labour market.

Question 16

1.15 Why is education important for wages?

Accepted Answer

The wage profiles in the WageIndicator dataset are among other things influenced by the level of education of the respondents. In general, the level of education is an important factor influencing the productivity of an individual. More educated individuals may be assigned more complex tasks, more responsibility, or simply use their working time more efficiently. Differences in educational attainment give rise to wage differentials even within the same occupation and for individuals sharing other characteristics. Therefore controlling for education is crucial for the reliability of WageIndicator data.

Question 17

1.16 Why are years of experience important for wages?

Accepted Answer

In general, more productive workers earn higher wages, and more experienced workers tend to be more productive. With years of experience workers learn how to perform their tasks more efficiently. In particular in the early years of one’s career this will translate into higher wages though this effect diminishes over time. Therefore controlling for years of experience and taking these effects into account is crucial for the reliability of WageIndicator data.

Question 18

1.17 Why is it important for wages whether the employee has a supervisory position?

Accepted Answer

In general, a supervisory job comes along with more responsibility which translates into higher wages for workers in such positions.. Also, the most productive workers (next to other personal characteristics) tend to be selected for supervisory positions. Therefore controlling whether workers have supervisory positions is crucial for the reliability of WageIndicator data.

Question 19

1.18 What is the meaning of minimum and maximum wages in the salary check?

Accepted Answer

The minimum and maximum wages indicated in the Salary Check illustrate how the earned wage varies for a given occupation and with years of experience. The maximum wage is the upper bound of earned wages reported in the Salary Check for a given occupation. Statistical methods are used to construct occupation-specific wage profiles.

Question 20

1.19 Is the physical attractiveness of a person reflected in the salary check?

Accepted Answer

Researchers explored whether one’s physical appearance matters in occupations where attractiveness can be economically important. In most cases the impact on wages of physical attractiveness seems to be overestimated and personal characteristics such as self-confidence, diligence or creativity may well be of greater importance. In the Salary Check one’s physical appearance is not reflected in the wage information.

Question 21

1.20 Why does the salary check indicate a far higher/lower salary than my actual one?

Accepted Answer

The Salary Check predicts one’s wage for a given profile of individual characteristics. It answers the question how much an individual of given characteristics can expect to earn. Clearly, the quality of the prediction depends on the accuracy of information entered into the Salary Check. First of all, it is very important that respondents correctly report their occupation. WageIndicator has a database containing 1,700 occupations. Although some occupational titles are almost similar, they may differ substantially in the tasks and duties performed. If the wage information in the Salary Check does not match one's current salary, it is possible that one has not chosen the proper occupation. WageIndicator tries to capture the most important determinants of wages, but discrepancies between one's actual and predicted wages may remain due to factors not covered by the Salary Check. If one's salary is higher than that reported by the Salary Check, the person in question may have specific characteristics or talents that have been rewarded in the labour market and have remained outside the scope of the WageIndicator. Conversely, if one's salary is lower than that predicted, this may point to underpayment and be an impetus to look for another job. Alternatively, it may be that the respondent’s employer offers benefits that compensate for the lower pay such as free child care or other secondary benefits.

Question 22

1.21 Why does the salary check not mention my profession?

Accepted Answer

If the Salary Check does not mention one’s profession, the respondent may try to refine the occupation search. Currently WageIndicator recognizes some 1,700 different occupations and is busy scaling up to 4,000 occupations, making the occupation search engine a truly encompassing tool. That said, the fact may remain that one's profession is very specialized and unique, and therefore may not yet have been defined in the WageIndicator. In that case, please get in touch with the WageIndicator office to have such an occupation included in the Salary Check Mail: office@wageindicator.org .

Question 23

1.22 Can the outcome of the Salary Check be used for a pay rise?

Accepted Answer

The aim of the Salary Check is to provide the most accurate information about the expected wage for a worker in a specific occupation with a given set of individual characteristics. However, the calculation of wage information in the Salary Check does not include performance aspects such as effort, creativity, work attitude, and the like. These characteristics are part of an individual’s human capital and may also determine one's pay. Against this backdrop it may be clear that wage predictions from the Salary Check have great informative value but that they can only be part of an individual’s input in wage negotiations with an employer. However, it is definitely worthwhile trying to convince the employer that a pay rise is justified, referring to the wage of one's occupational peer group is paid.

Question 24

1.23 How is the median wage calculated?

Accepted Answer

The median wage is the wage value in the middle where a number of observed wages is sorted into ascending order. Nearly everywhere more people earn low wages than wages above average: in statistical terms, such a wage distribution is skewed. In countries with high income inequality the wage distribution is highly skewed and the median wage ends up substantially lower than the average wage.

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