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QUESTION:  How does ERI compute National Average values?

 

The pre-defined national averages (for all countries listed) for wages/salaries represent weighted averages (if mean salaries are selected for display) or median salaries (if selected) of all survey-reported data for each position, industry and area.  Larger cities' pay data are automatically weighed more heavily than small towns' (in keeping with work force populations), due to the relatively larger number of incumbents reported by each survey for each position.

 

For cost-of-living, the national average definition varies according to cost category.  Rather than being weighed by population (as with wage/salary National Averages), the major cost categories are analyzed for a median level, "typical" American spending pattern.  For example:

 

•Effective Income Taxes at the United States Average represent a median effective income tax (varies by spending level) for all cities and states (roughly the taxes of the twenty-fifth and twenty-sixth states, ranked by taxes, and adjusted slightly for the relatively few counties and cities that collect income tax).

 

•Home Costs at the United States Average represent a median annual home rental cost (varies by spending level) for the thousands of cities tracked and reported by the Assessor Series databases.

 

For countries other than the United States, the country average cost-of-living assumptions represent a spending pattern consistent with the US and are adjusted for the generally higher provincial individual income taxes and lower provincial employee health care costs.

 

 

QUESTION:  An alternate source that I'm using shows a different salary for 'X City' and a different salary for the National Average.  How do you explain this?

 

Please remember that there is no empirical national average.  As with city data, the particular definition and methodology of any source's national average must be reviewed.  For example, if a source surveys twenty cities in fifteen states, its "national average" may or may not provide a relevant comparison point for cities in the remaining thirty-five states.  

 

Because different surveys cover different data populations (number of companies, location of companies, company size, industry, etc.), it would be unusual to find consistent across-the-board survey results between any two, separately administered surveys.  An important value of the Salary Assessor databases is the blending and smoothing of all published survey data to derive ERI's best calculation for a given position, area and/or industry.