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6102.0.55.001 - Labour Statistics: Concepts, Sources and Methods, Apr 2007  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 19/04/2007   
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Contents >> Methods >> Business Collections >> Chapter 28. Survey of Major Labour Costs

CHAPTER 28. SURVEY OF MAJOR LABOUR COSTS


INTRODUCTION

28.1 The Survey of Major Labour Costs (MLC) has been conducted on an irregular basis since 1985–86 and was most recently conducted in respect of 2010–11. The survey produces statistics on the main costs incurred by businesses as a consequence of employing labour. Data from the survey are used by a wide range of users for labour market analysis. In particular, they are used by governments for employment, prices and income policy development, for monitoring changes in the cost of labour, and for wage determination purposes.


SURVEY OUTPUT

28.2 Estimates are published in
Labour Costs, Australia (cat. no. 6348.0). More detailed estimates are available on request.

28.3 The population of interest is civilian employee jobs based in Australia, for which payments in relation to certain labour costs were made during the survey reference period (the financial year ending 30 June). The reference period for fringe benefits tax is for the 12 months ending 31 March. A number of key items are compiled from the survey based on various components of employer labour costs:

        • employee earnings;
        • superannuation;
        • payroll tax;
        • workers' compensation; and
        • fringe benefits tax.

28.4 Costs are measured on a cash accounting basis, net of any reimbursements, subsidies or rebates.

28.5 Data can be classified by state or territory, sector (public/private), level of government, public institutional sector, industry and employer size. Data are available as either total costs or costs per employee.

28.6 Data from the survey are available on an original basis only.

28.7 Data collected in the survey are compiled according to concepts and definitions outlined in
Chapter 12: Employee remuneration. All labour costs reflect actual payments made in the survey reference period. As such they do not reflect costs incurred in the reference period for which payments are made in a later period, but they include payments made in the survey reference period for costs incurred in a prior period.

28.8 Earnings estimates from the survey are broader than, and are not directly comparable with, earnings estimates from the Survey of Average Weekly Earnings (AWE). For more details on the earnings definition in MLC, see
Chapter 12: Employee remuneration.

28.9 A number of other labour costs are not covered by this survey. These include training costs, costs associated with employee welfare services, and recruitment costs. With the exception of training costs, these items are not considered to make a significant contribution to total labour costs. Training costs were collected in the Training Expenditure and Practices Survey, conducted for the financial year 2001–02, and in the earlier Training Expenditure Survey conducted for September quarters of 1989, 1990, 1993 and 1996. Costs covered in these former surveys are specifically for structured training provided by employers. For further information see
Employer Training Expenditure and Practices, Australia (cat. no. 6362.0).


SCOPE

28.10 The scope of the survey is restricted to employing organisations in Australia. The standard scope exclusions for ABS labour-related business surveys (outlined in
Chapter 25: Methods used in ABS business surveys) apply to this survey.


SURVEY METHODOLOGY

28.11 Detailed information is obtained about labour costs from selected employers using a mail-out/mail-back collection methodology.

28.12 Respondents who do not mail back their completed questionnaire within a reasonable period of time after the survey reference date are followed up by mail and then telephoned if necessary. The response rate for the 2010–12 survey was 89.5%.


SAMPLE DESIGN

28.13 A sample of employing businesses is drawn from the ABS Business Register using the process outlined in
Chapter 25: Methods used in ABS business surveys. Employing units are stratified by:
        • state or territory;
        • sector - the public and private sectors are stratified separately;
        • industry - industry stratification is based on ANZSIC division; and
        • employment size - the ranges used vary between states and territories, sectors and industries.

28.14 Strata on the survey frame that are completely enumerated include those containing selection units with benchmark employment greater than a set cut-off (this cut-off will vary for different states/territories) and strata with a very small number of selection units in the population.

28.15 In addition to constraints outlined in
Chapter 25: Methods used in ABS business surveys, sample selection is constrained by ensuring there is minimal overlap with other labour-related business surveys.

SAMPLE SIZE AND ALLOCATION


28.16 For the 2010–11 survey, approximately 7,000 employer units were selected to ensure adequate industry and state/territory representation. Of these, approximately 5000 units were in the private sector and 2000 were in the public sector.

SAMPLE RESELECTION


28.17 The ABS reselects the sample for the Survey of Major Labour Costs each time it is conducted. At the same time the overall design of the sample is examined to ensure that it remains efficient and cost-effective.


ESTIMATION

28.18 Number-raised estimation is used to generate population estimates from survey responses. For more information on number-raised estimation, refer to
Chapter 17: Overview of survey methods.

28.19 Aggregate Ratio imputation is applied to all non-responding units that are not identified as being defunct. The unit is imputed by applying the aggregate ratio of each item to benchmark from respondent units of a similar type (e.g. state, industry, size) as relevant to each item.

28.20 Partial clerical imputation is carried out for units that can only provide part data. The missing item(s) is imputed using the relationship between that item and a relevant provided item as per responding units of similar type. Where relevant and available, employment and earnings data obtained from the Survey of Employment and Earnings or AWE are used to assist clerical imputation.


28.21 Adjustments are made to survey estimates to account for births and deaths of businesses that have occurred up to the end of the survey reference period but which are not reflected on the survey frame.

28.21 For further information on estimation methods used in ABS Business Surveys, refer to
Chapter 25: Methods used in ABS business surveys.


RELIABILITY OF THE ESTIMATES

28.23 Estimates from the survey are subject to both sampling and non-sampling error. The relative standard errors of survey estimates are available in the publication.

28.24 The bootstrap approach is used to calculate estimates of variance for this survey. For further information on variance estimation techniques, or on sampling and non-sampling error, refer to
Chapter 17: Overview of survey methods.


DATA COMPARABILITY OVER TIME

28.25 In order to provide a high degree of consistency and comparability over time, changes to survey methods, survey concepts, data item definitions, and frequency of collection, are made as infrequently as possible. However care should be taken in using data from this survey as a time series. The survey is designed to give an accurate 'snapshot' of data rather than an ongoing series of observations over time.

    1985–86
    Annual survey commenced for this reference year.

    1991–92
    Last year for which survey was conducted on an annual basis.

    1993–94
    Survey output reclassified on an ANZSIC industry basis. Collection methodology for superannuation coverage and collection of fringe benefits/fringe benefits tax commenced.

    1996–97
    Introduction of Live Respondent Mean imputation for the sampled sector. Change in reporting arrangements for superannuation by Commonwealth general government organisations. Introduction of Aggregate Ratio imputation for all units.

    2002–03
    Estimates published in 6348.0.55.001 for the first time. Employer superannuation costs excluded superannuation contributions made under an employee's salary sacrifice arrangement for the first time. Earnings estimates included, for the first time, the value of salary sacrificed. The derivation of earnings included the ungrossed value of fringe benefits, whereas the grossed up value of fringe benefits was used in 1996–97.

    2010–11
    Estimates published in 6348.0. Output classified on ANSZIC 2006 industry basis.

FURTHER INFORMATION

28.26 For further details contact the Labour Market Statistics Section in Canberra on (02) 6252 7206 or email <labour.statistics@abs.gov.au>.


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