Assessing sectoral capacity for wage increase: a multidimensional analysis using CPS ASEC data

Roudy Sassine ()
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Roudy Sassine: Cliffside Park

Business Economics, 2024, vol. 59, issue 4, No 6, 243-257

Abstract: Abstract We analyze sectoral resilience for wage increase by constructing a multi-ratio composite index using the 2023 CPS ASEC data. The Unemployment Ratio measures labor market slack, with a 3% unemployment rate as a baseline. Sectors meeting this rate are assigned a ratio of 1, while sectors with higher or lower unemployment rates are adjusted proportionally. The Wage Ratio evaluates sectors based on their median wage levels, using the national median wage as a baseline, with adjustments made for sectors with above or below median wages. Further breakdowns include the Educational Wage Ratio and the Regional Wage Ratio, which assess how education and regional differences influence wage dynamics across sectors and within the same sector. A formula that combines the Unemployment Ratio, the Educational Wage Ratio, and the Regional Wage Ratio produces the multi-ratio composite index to assess sectoral resilience in a more granular fashion. Scores above 1 indicate a sector's capacity to manage wage increases effectively, while scores below 1 highlight potential pressure points that may require cost-saving measures. The multi-ratio composite index provides business leaders with valuable insights into strategic decision-making in a rapidly changing economic landscape.

Keywords: Sector; Resilience; Wage; Unemployment; Education (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1057/s11369-024-00380-4

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