Additional Common Topics (Listed Alphabetically) > Area Related Topics > Definition of Geographic Area (Salary / Wage Analyses)

ERI's definition of geographic area for salary/wage analyses can be explained by answering the following question:

How are the geographic areas defined for salary and wage analyses? When I look at wage data for "Minneapolis, MN" is this Minneapolis, the Twin Cities, the MSA?

ERI defines Minneapolis, MN as "within the city limits of Minneapolis". Generally speaking, when Wage Surveys are conducted, the survey company will ask major employers in the labor market or area to participate in the wage survey. In a city where the city limits are broad, the area contained in the Wage Survey and the city limits are nearly one and the same, as in Houston, for example. In metropolitan areas such as Los Angeles where the market consists of a core city and many cluster cities, the wage surveys will generally be conducted by major employers in the greater area. As such, the Wage Survey would be broader in area than just the city limits of the City of Los Angeles itself. There are also different survey boundaries for different surveys of any one market place. For example, ERI analyses include data for wage surveys of the greater Los Angeles Area and also surveys that break the wage data out by each major city within the greater Los Angeles area.

There are also adjacent cities for which separate wage surveys may not be available each year. In such cases, the source of ERI structures may be from combined area wage surveys, such as greater metropolitan area surveys that would encompass areas like Phoenix, Arizona and Mesa, Arizona, for example. In such cases, when you bring up Mesa, AZ in the Geographic Assessor or the Salary Assessor you may notice wage differentials that are quite close to Phoenix, due to the cities being part of the same metropolitan area wage surveys and the relative lack of individual city data for Phoenix and Mesa.

In cases where the Geographic Assessor or the Salary Assessor report similar pay levels for adjacent cities, ERI analyses have identified these adjacent cities as effectively part of the same labor market. That is, the demand and supply for labor in these cities is similar. In many cases, however, ERI analyses find that "downtown" pay rates are highest, with pay dropping significantly in surrounding suburbs. This will explain why ERI pay data is relatively low for smaller cities and towns outside of some major cities. In these cases, distance is an economic variable for pay.

In reviewing our database, there are over 8,000 combinations that occur in terms of geographic wage areas in North America alone. We use individual city wage data in every case where it is available and model wage data for "within city limits" estimates for our geographic area structures for the smallest cities and towns. Each ERI city's structures may thus be considered "within city limits" data. If you need to review pay levels for a greater metropolitan area, the Geographic Assessor and the Salary Assessor allow for a user-defined combinations of cities. It is also possible to combine cities within counties or entire counties with other counties in order to review regional pay. Please note: Canadian "counties" are equivalent to US counties. That is, they are "Census Divisions" that exclude Indian Government Districts, Reserves, Settlements, Terres, and Villages.

As a final note, the Salary Assessor databases contain over 300 US and Canadian areas. When subscribing to both the Salary Assessor and the Geographic Assessor, the Geographic Assessor greatly expands the database utilized by the Salary Assessor and the data accessible to the subscriber. Thus, for subscribers who create "user-defined averages" of multiple cities, it is recommended that you subscribe to both the Salary Assessor and the Geographic Assessor, as the addition of the Geographic Assessor (with over 9,000 cities in North America, the UK, Europe, and other countries around the world) provides greater flexibility in fine-tuning geographic area definitions. The more closely you are able to define your organization's labor market, the better the data will serve your needs.