CHAPTER 29. SURVEY OF AVERAGE WEEKLY EARNINGS
29.1 The Survey of Average Weekly Earnings (AWE) is a survey of business units which has been conducted since 1981. Prior to August 1981 the AWE series was based principally on information from payroll tax returns. The survey is currently conducted biannually, and was conducted on a quarterly basis until May 2012.
29.2 The purpose of the survey is to measure the level of average gross weekly earnings associated with employees in Australia. Estimates of average weekly earnings, and changes in average weekly earnings, are produced each cycle. Estimates are used in commercial contracts and more broadly by the private sector for economic and labour market analysis and in Commonwealth, State and Territory legislation, for adjusting a variety of government payments, for supporting minimum wage claims, monitoring wage equity, and as an indicator of change in underlying wage rates for economic or taxation policy analysis.
29.3 While the survey provides the headline series for levels of earnings, the Wage Price Index (WPI) is a more relevant indicator for changes in the rates of pay for many purposes, as it is unaffected by changes in the composition of the labour force or changes in the characteristics of employees. For further information on the WPI, please refer to the Explanatory Notes of Wage Price Index, Australia (cat. no. 6345.0) and Wage Price Index: Concepts, Sources and Methods (cat. no. 6351.0.55.001).
29.4 Data are collected and published biannually (relating to the May and November reference periods) in Average Weekly Earnings, Australia (cat. no. 6302.0), released approximately three months after the reference period. Prior to May 2012 the series was released quarterly. More detailed data are available on request. Up until the November reference period 2000, preliminary results were released three weeks earlier in Average Weekly Earnings, Australia, Preliminary (cat. no. 6301.0).
29.5 The population of interest is civilian employees, who received pay for the survey reference period, excluding employees based outside Australia. Three main series are published:
- Average weekly ordinary time earnings (commonly referred to as AWOTE) for full-time adult employees (refer to Chapter 12 for further information on ordinary time, overtime and other components of earnings);
- Average weekly total earnings for full-time adult employees (comprising weekly ordinary time earnings plus weekly overtime earnings); and
- Average weekly total earnings for all employees.
29.6 Earnings in AWE is broadly defined as current and regular payments in cash to employees for work done. Earnings series from the AWE survey have historically excluded amounts salary sacrificed, as these were considered as payments in kind. Under the conceptual framework for measures of employee remuneration, as revised in 2006 in Information Paper: Changes to ABS Measures of Employee Remuneration (cat. no. 6313.0), amounts salary sacrificed are now considered conceptually to be wages and salaries in cash, with information collected on this basis from August 2007. Time series inclusive of salary sacrifice were first published in the May 2011 issue of Average Weekly Earnings, Australia (cat. no. 6302.0), with the time series available back to May 2010. This is an additional (not replacement) series and the ABS continues to publish the AWE series on the former basis (i.e. exclusive of amounts salary sacrificed) to maintain long term comparability of the time series.
29.7 Estimates of the percentage change in average earnings (from both the previous period and from the corresponding period of the previous year) are published for each series. Estimates from the survey are cross-classified by sector, state or territory and by industry at the Australian level, for males, females and persons.
29.8 Estimates are published on the following bases: original; seasonally adjusted; and trend (see Chapter 17 for further explanation of original, seasonally adjusted and trend estimates). Seasonally adjusted and trend estimates are available by Australia and State/Territory for each of the three main series listed above.
29.9 Data collected in the survey are compiled according to concepts and definitions outlined in Chapter 4 (Employment measures and classifications) and Chapter 12 (Employee remuneration).
29.10 The scope of the survey is restricted to employing businesses. The standard scope exclusions for ABS labour related business surveys (outlined in Chapter 25) apply to this survey.
29.11 The following persons are not regarded as employees of the sampled business for the purposes of this survey, and are excluded:
- casual employees who did not receive pay during the reference period;
- employees on leave without pay who did not receive pay during the reference period;
- employees on strike, or stood down, who did not receive pay during the reference period;
- directors who are not paid a salary;
- proprietors/partners of unincorporated businesses;
- self-employed persons such as subcontractors, owner/drivers, consultants (however these persons are separately enumerated as part of their own business if in sample);
- persons paid solely by commission without a retainer;
- employees on parental leave who are receiving payments solely under the Australian Government's Paid Parental Leave Scheme; and
- employees on workers' compensation who are not paid through the payroll.
29.12 Details of numbers of employees (full-time adults and other employees), total gross weekly earnings (for full-time adults and other employees), and weekly overtime earnings of full-time adults are obtained on a biannual basis from a sample survey of employer units, using a mail-out/mail-back collection methodology. Data for some Commonwealth and State/Territory Government organisations, and a small number of large private businesses are collected electronically. Businesses which do not mail back their completed questionnaire within a reasonable period of time after the survey reference period are followed up by mail and then phone if necessary. A minimum response rate of 96% is achieved for the survey as a whole and for each state, sector and industry.
29.13 The survey reference period is the week ending the third Friday of each May and November. Due to the wide variety of pay arrangements and systems which exist, most employers are not able to report for this exact period. Therefore employers are requested to report for the last pay period ending on or before this date, and where a pay period is fortnightly or monthly (etc.), the employer is requested to report only one week's proportion.
29.14 Although the historical estimates of earnings from the AWE survey (as well as current information provided on the same basis) should exclude amounts salary sacrificed, in practice there is evidence that some amounts salary sacrificed are sometimes inadvertently included. The ABS works closely with data providers to identify any instances of mis-reporting, and to amend their reporting practices where necessary.
29.15 A probability sample of employing business units is drawn from the ABS Business Register using the process outlined in Chapter 25. Variables used to stratify the survey frame each period are:
- state or territory;
- sector - the public and private sectors are stratified separately;
- industry - within the private sector, industry stratification is based on Australian and New Zealand Standard Industrial Classification (ANZSIC) division; within the public sector ANZSIC divisions are aggregated to form four broad industry groupings; and
- employment size - the ranges used vary between States and Territories, sectors and industries.
29.16 Strata on the survey frame that are completely enumerated include those containing business 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 employing business units. Strata which are completely enumerated because they contain a low number of business units may become sampled strata if the number of such units in those strata increases sufficiently.
29.17 In addition to constraints outlined in Chapter 25, sample selection is constrained by the need to ensure that there is minimum overlap with other labour related business surveys and with non-labour related business surveys.
29.18 A sample redesign was undertaken in 2009 to incorporate the 2006 version of ANZSIC. Additional details about the implementation of ANZSIC 2006 in AWE can be found in the Information Paper: Changes to Average Weekly Earnings, Australia, Aug 2009 (cat. no. 6302.0.55.002).
SAMPLE SIZE AND ALLOCATION
29.19 Approximately 5,550 business units are selected in the sample to yield a live sample of approximately 5,050 business units.
29.20 The sample is allocated optimally across sampled strata using a technique designed to minimise the variance of average weekly earnings estimates at both the national and state/territory level.
29.21 The sample is updated each period to reflect changes in the ABS Business Register. Approximately 16% of the sample selected from the non-completely enumerated strata is replaced each period. Refer to Chapter 25 for further information.
29.22 Sample rotation is implemented for the majority of sampled strata, but is not implemented where the population of a stratum is so small that units rotating out of the sample would be rotated back in after only a short interval.
29.23 Estimates of total weekly earnings and number of employees are computed for various combinations of state or territory, sector and industry. Average weekly earnings measures are the quotient of the respective earnings and employment measures. Ratio estimation is used in all sampled strata, except in small sized strata, in which case number raised estimation is used.
29.24 In both completely enumerated and sampled strata an automatic imputation procedure is used for units not responding, by applying imputed growth rates to the most recently reported employment and earnings data for these units, provided that data have been reported in either of the two previous periods. This is referred to as Beta imputation. Otherwise, the Live Respondent Mean method is used to impute for missing data items.
29.25 Significance editing was introduced in September 1992. This technique means that editing is only performed on those survey values which will significantly impact on the survey estimate if left unaltered.
29.26 Survey outliers are handled by using the 'surprise outlier' technique. For further information on outliers and the 'surprise outlier' technique, refer to Chapter 17.
29.27 For the purposes of ABS statistics, the privatisation of Telstra Corporation (from public sector to private sector) was effective from March quarter 2007. The effect of this change was significant for both the private sector and public sector series. As a result, a trend break was applied to both series between November 2006 and February 2007. For more information please see Information Paper: Future Treatment of Telstra in ABS Statistics, 2007 (cat. no. 8102.0).
TIME SERIES ESTIMATES
29.28 Both seasonally adjusted and trend estimates are produced for key series from this survey.
29.29 Seasonally adjusted estimates were introduced from September 1983. The change in frequency in 2012 resulted in a new seasonally adjusted series from May 2012. While seasonal factors remain present in AWE and can be calculated on a biannual basis, calculating seasonally adjusted estimates using only two points of measurement each year, rather than the four points available in a quarterly survey, resulted in a change in the level of this series. For more information, refer to Information Paper: Changes to Average Weekly Earnings, Australia, April 2012 (cat. no. 6302.0.55.002).
29.30 Trend estimates were introduced from August 1993. The change in frequency in 2012 resulted in a new trend series from May 2012. While seasonal factors remain present in AWE and can be calculated on a biannual basis, calculating trend estimates using only two points of measurement each year, rather than the four points available in a quarterly survey, resulted in a change in the level of this series.
RELIABILITY OF THE ESTIMATES
29.31 Estimates from the survey are subject to both sampling and non-sampling error (see Chapter 17 for further information). The relative standard errors of survey estimates are published in Average Weekly Earnings, Australia (cat. no. 6302.0).
29.32 The 'jack-knife' approach is used to calculate estimates of variance for this survey. For further information on the jack-knife technique for estimating variances, or on sampling and non-sampling errors, refer to Chapter 17.
DATA COMPARABILITY OVER TIME
29.33 In order to provide a high degree of consistency and comparability over time, changes to survey methods, survey concepts, data item definitions, frequency of collection, and methods of time series analysis, are made as infrequently as possible. Significant changes have included:
Average weekly earnings collection commenced, based principally on information from payroll tax returns.
Survey of businesses conducted quarterly from ABS Business Register.
Interim survey from 1981 replaced; sample increased, selected from upgraded ABS Business Register.
Number of employees redefined to those receiving pay in the reference period, rather than those that are on the payroll. Overtime redefined as overtime hours paid for in reference period, rather than overtime hours worked during the reference period.
Seasonally adjusted estimates introduced.
Sample reallocated based on sample data previously received.
First data collected electronically from selected survey respondents, including Commonwealth Government departments.
AWE survey data (up to 1990) linked with data from previous sources and back-cast to 1941 (cat. no. 6350.0, not available online).
Trend estimates introduced.
Industry estimates by Australian Standard Industrial Classification (ASIC) introduced.
Survey redesigned on an ANZSIC 1993 industry basis.
Publication of preliminary estimates (cat. no. 6301.0) discontinued.
Separate collection of salary sacrificed amounts from August 2007.
Trend break applied to private sector and the public sector estimates between November 2006 and February 2007 due to privatisation of Telstra Corporation.
Survey sample redesigned on an ANZSIC 2006 industry basis.
Sample redesign and improvements to the business survey frame implemented, historical series backcast on the new basis back to August 1994.
The average weekly cash earnings series inclusive of salary sacrifice is introduced, with the time series available back to May 2010. For further information relating to the average weekly cash earnings series, refer to Information Paper: Release of Average Weekly Cash Earnings Series (cat. no. 6302.0.55.003).
Frequency changed from quarterly to biannual (May and November reference periods). For full details on the change in frequency, refer to Information Paper: Changes to Average Weekly Earnings, Australia, April 2012 (cat. no. 6302.0.55.002).
29.34 For further details contact the Labour Market Statistics Section in Canberra on (02) 6252 7206 or email <email@example.com>.