Which states have the highest average workers' compensation tax rates? And which have the lowest?
The answer is presented visually below:
We've posted an interactive version of the chart above, and we've also made the data publicly available through IBM's ManyEyes data visualization site.
We used this data in our "How Much Does It Cost to Employ You? (2011-12 Edition)" tool, as it's the most recent we have available. We'll be exploring the other data behind the tool later this week!
Data Source
Manley, Mike and Dotter, Jay. 2010 Oregon Workers' Compensation Premium Rate Ranking Summary. Oregon Department of Consumer and Business Services. October 2010.
Labels: data visualization, work
Now that we've looked at why teenagers and students in college are going to be very unlucky in finding jobs this summer, we thought that it might be fun to look at what kind of money those who have just obtained college degrees can reasonably expect as they enter the U.S. workforce!
The dynamic table below summarizes recent average starting salary by academic degree, which we've compiled from recent data published by CNN (HT: Mark Perry) and the National Association of Colleges and Employers.
To sort the data in the table, you just need to click the column headings - you can sort either alphabetically by college major or numerically by average starting salary. To re-sort the data in reverse order, just click the column heading again!
| 2008 Starting Salaries for Recent College Graduates |
|---|
| Degree / Major | Average Starting Salary |
|---|---|
| Accounting |  $47,413 |
| Chemistry | $52,125 |
| Communications | $35,196 |
| Computer Science | $56,921 |
| Economics | $52,926 |
| Engineering - All | $56,336 |
| Engineering - Chemical | $63,749 |
| Engineering - Civil | $49,427 |
| Engineering - Electrical | $56,512 |
| Engineering - Mechanical | $56,429 |
| English | $34,757 |
| Finance | $48,795 |
| History | $35,956 |
| Human Resources | $40,250 |
| Journalism | $32,250 |
| Liberal Arts - All | $33,258 |
| Management | $43,823 |
| Marketing | $43,459 |
| Nursing | $52,129 |
| Political Science | $43,594 |
| Psychology | $30,877 |
| Public Relations | $30,667 |
Having sorted the data by salary, we noticed an interesting trend - namely, that liberal arts majors fall into the bottom of the barrel when it comes to making a decent amount of money upon entering the workforce.
In fact, if we draw the line right above History majors, we find that there is a significant gap between these college graduates and their more business and technically-oriented peers. So, what's the difference between the educations that can be obtained through these programs that might account for the large discrepancies that we observe in the table above?
Could it be productivity? Since we would expect people who are more productive to have higher earning power and consequently, a greater ability to command a higher starting salary when entering the workforce, could this explain the difference?
We find the answer here is no. Consider that every academic major graduates students who have never obtained real world work experience, and therefore, have never demonstrated their relative level of productivity compared to other students. Yet, the students in the business and technical fields will still outmatch their liberal arts peers in starting salaries, even with identical grades. So we see that productivity doesn't factor in much at this level - although, we should note that it does play a factor within majors. Students who do obtain real world experience in their fields through internships, co-op programs or other employment are able to command higher starting salaries than their peers within their fields who do not.
Let's take a step backward. The primary purpose of an accredited college education is to provide students with a means of demonstrating to others that they have acquired a given body of knowledge. So there must be something inherent in the body of knowledge that the student acquires that accounts for the discrepancy in starting salaries. What is it that the students in business and technically-oriented degrees are getting that the graduates of liberal arts are not?
The answer may be found by considering just what it takes to be successful in life. The two things anyone needs to achieve great success are: great ideas and great execution.
Here, an individual can have the greatest idea ever, but unless they can turn it into something real (execution), they'll never achieve great success. Likewise, someone can have a lousy idea, but through great execution, achieve a moderate amount of success.
The ideal combination, of course, is to blend a great idea with great execution.
Where this applies to starting salaries for students with recently minted college degrees is that the technical and business-oriented degress all share a common characteristic - they demand the ability to execute ideas into reality.
Meanwhile, the liberal arts programs are big on ideas, but are not so much when it comes to execution. And therein we find why liberal arts majors just don't fare very well in the salary department when entering the job market.
How Much Is That Idea Worth?
We featured the following tool some time ago, and since it relates to this discussion, we present it here so you can find out for yourself how much various combinations of awful-to-brilliant ideas and lousy-to-great execution matters in determining how much value an idea potentially has:
Update 18 June 2008: Made the 2008 starting salary data table look "prettier." (Okay, make that "less clunky!")
Labels: education, ideas, income, jobs, tool, wages, work
How much does having you on the payroll really cost your employer?
You can thank or blame King Banaian for the brand new tool we're featuring today, in which we seek to answer that very question!
To answer the question, we're focusing on those things that represent the recurring cost of compensating you for your boss and those things that are required for all employers by law, such as all those taxes your employer has to pay just because you're on the payroll. Things like hiring you in the first place and training you to do your job aren't included, since these often reflect one-time only costs and can't really be counted at all as part of your compensation.
The tool will also not consider such factors as overtime pay and bonuses mainly for the sake of keeping things simple (it's complex enough already!) While these factors will influence things like how much your employer pays for its portion of Social Security and Medicare taxes, they don't influence things like your company's matching contribution to your 401(k) retirement plan or how much your health insurance would cost.
That said, our tool is designed to find out how much you actually cost your boss per hour, taking into account what benefits you may have and things like how big your company is and the state in which you work. Ideally, the tool will give you a good idea what your employer pays you beyond what you see on your paycheck:
Some Observations
The portion of your pay for actually working and the portion of your pay for time-off benefits will, when added together, equal the amount of your basic hourly pay.
For the lowest incomes, and particularly for small businesses, the administrative costs of actually processing the payroll and delivering your pay to you in the form of a check or by direct deposit to your bank can represent the largest component of expenses beyond your actual pay! We estimated these effective costs per hour for you based upon the prices listed by payroll processing firm Corporate Payroll Services, which we assume to be either competitive with or less than what your employer actually pays for these administrative expenses.
You may be absolutely amazed by the percentage of base pay represented by the non-visible portion of what your employer has to pay beyond your paycheck, especially if you earn the minimum wage in the U.S. and your employer provides health insurance for your family and you opt for the PPO option, which 60% of all employees covered by their employers do. We adjusted the average cost for each type of health insurance plan for each U.S. state based upon the relative percentage of health insurance costs in each state with respect to the U.S. national average using the data summarized by the Public Policy Institute of New York State.
We likewise used the average unemployment insurance tax rate per state and the average workers compensation tax rate per state as well in computing these figures. Workers compensation, in particular, can vary wildly based upon an individual's occupation in addition to varying by state. Meanwhile, the amount a company may pay in unemployment insurance taxes can vary based upon the age of the business, which we did not take into account. Here, new business typically pay higher rates. California provides a good example of this factor as it charges new employers a 3.4% tax rate before lowering it after three years. California's average unemployment insurance tax rate for employers is 0.91%.
Employers have an incentive to have their employees contribute to Health Care Flexible Spending Accounts, which they can use to reimburse their health expenses with pre-income tax dollars. Employers can reduce the amount of FICA taxes they pay in proportion to what their employee sets aside in this type of account.
Finally, the results our tool provides above only covers your contribution to your employer's cost of doing business! There's also the matter of what your boss pays for land, equipment, material, etc. in setting the threshold of what it takes for the business to actually be profitable!
Update 12 February 2008: Our thanks to a sharp-eyed reader who noticed that our calculation for the employer's cost of direct deposit was incorrect! It turned out that our code was simply missing a set of parentheses, which has now been fixed!
Labels: business, health care, paycheck, tool, wages, work
Are you one of those people for whom sick leave is just one more employee benefit to be fully maximized? Sure, you could go in and work, but that might mean missing a crucial live game during March Madness.
Then again, you do have that car payment that you need to make later this month and your boss and co-workers are counting on you to help them hit the target that will give everyone a bonus this month. What should you do?
Don't wonder any more! Garth Sundem, the author of Geek Logik
In the results above, if your "Hooky" factor is greater than 1, you should call in sick. Of course, the real reason we provide this output is so you can play with the input data to find your personal "hooky" frontier - the combination of factors that would result in you opting to stay home!
Here's what Garth had to say about the math behind this tool:
The terms that drive this equation are the fun you could have at home compared to the fun you could have at your job, minus your chance of getting fired. If it's not going to be more fun at home and you might get fired for skipping work, why play hooky? This equation assumes that if you are too sick to think about going to work no matter the consequences, then you should probably call a doctor...
Now, whether or not you should call a doctor, well, that's a different question....
Labels: geek logik, tool, work
Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:
ironman at politicalcalculations
Thanks in advance!
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