VOL. 60 SEPT EMBER 1968 NO.9. Survey of Compensation of Water Utility Personnel. United States and Canada, 1968

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1 Durnal AMERICAN WATER WORKS ASSOCIATION VOL. 60 SEPT EMBER 1968 NO.9 I Survey of Compensation of Water Utility Personnel. United States and Canada, 1968 Committee Report A preliminary report oj the Committee on Compensation and Benefits oj Water Utility Personnel, presented Jun. 4, 1968, at the Annual Conjerence, Cleveland, by Garvin H. Dyer (Chairman) Vice-Pres. M~ssouri Water c«, Independence, Mo. Other members' oj the com~ mutee are C. R. Erickson (Vice-Chairman), J. C. Luthin, J. M. Brown, and W. R. Gelston. N 1958 and again in 1963, the A WW A Committee on Compensation of Water Utility Personnel made surveys of salaries being paid to managers of water utilities in the United States and Canada. The results of these surveys were published in the December and October JOURNALS, respectively, along with salary recommendations and other related material. Realizing that employee benefits are an integral part of intelligent wage and salary administration policies, the committee made an extensive survey of the policies and costs of employee benefits of water utilities in the United States and Canada as of Jan. 1, This report was published in the February 1963 S JOURNAL. 985 Problems Involved For several years, the committee has had numerous requests to make a survey of salaries paid to water utility personnel other than managers. As there is no uniformity in either job titles, classifications, or work done by personnel of water utilities of even similar size, the setting up of such a survey is most difficult. The task is further complicated by the different types of work performed by employees of utilities of different size. In a large utility, each employee may specialize in one particular job, while in a small operation, an individual may do many jobs. Other variables are the difference in wages paid in various sections of the country and the difference in

2 986 COMMITTEE REPORT Jour.AWWA compensation policies of publicly owned and investor-owned utilities. For several years, A WWA had an active committee studying uniform job descriptions and titles. The Bureau of Labor Statistics was also involved in producing a dictionary of job titles and descriptions for various industries including the water utility industry. The A WW A committee was disbanded in hopes that some uniformity could be established by the BLS dictionary. The Committee on Compensation of Water Utility Personnel delayed the salary survey in anticipation of the establishment of uniform job titles and descriptions. When the prepublished job descriptions adopted by BLS were obtained, however, it was discovered that they were not suitable for use in such a survey. Conduct of the Survey After extensive study, it was concluded that the only practical way to make such a survey would be to limit it to those jobs which were most common to the average size utility and to set up very simple, broad, and concise job descriptions. Accordingly, descriptions were formulated for the nine most common office and supervisory positions and for the eight most common construction, maintenance, and service jobs. The covering letter instructed the recipients to report those jobs which most nearly conformed to the designated job descriptions. It was realized that the smaller utility might have only one or two of these jobs, while the larger utility might have a number of jobs that did not fall within any of the job descriptions. These they were asked not to report. For comparative purposes, it is only natural that each utility would want their own jobs surveyed. Owing.to the lack of uniformity in the industry, however, the complications involved would make such a survey impractical. Even with the seventeen jobs surveyed, the task of assembling, tabulating, studying, and printing the results of this survey has proven to be time consuming and expensive. As it was desired to update the 1963 Survey on Compensation of Water Utility Managers, a questionnaire similar to that used in previous managerial salary surveys was included. The questionnaire format for the other seventeen jobs surveyed was similar to that used by many other organizations in making their salary surveys. In making the survey, 3,500 questionnaires were sent to water utilities in the United States and Canada. Questionnaires were sent to all utilities serving a population of over 10,000. Six hundred thirty-eight were sent to utilities serving populations of less than 10,000 on a random sampling basis. Approximately 1,500 (43 per cent) usable questionnaires were returned. Related Available Material It was not the intent that this survey should cover every job any utility might have, but that it cover only the more common ones. Professional and technical men such as engineers, chemists, laboratory technicians, and so on were purposely omitted because the various professional societies, as well as the Bureau of Labor Statistics, make adequate surveys of the salaries of such employees. These surveys are readily available. For instance, the National Society of Professional Engineers makes a comprehensive survey of engineering salaries.

3 Sep.1968 COMPENSATION SURVEY 987 It may be of interest to note that the 1967 NSPE survey 4 revealed that the median income of engineers in 1967 was $14,310, representing a 19 per cent increase over 1964 (the date of the last survey). Engineers employed by public utilities received a median salary of $13,610. Those employed by county or municipal government received a median salary of $12,960. Chemical engineers were the best paid, with a median income of $16,350. Civil engineers had a median income of $13,670. The American Society of Civil Engineers makes periodic surveys of salaries paid to civil engineers. The full report of the 1968 survey is scheduled for publication in the June 1968 issue of the "Journal of Professional Activities." The Association of Professional Engineers of the Province of Ontario makes surveys of engineering salaries in Canada. The median in 1967 was $12,000, representing an increase of 5.1 per cent over Other engineering organizations make similar surveys of their memberships. The Bureau of Labor Statistics makes an annual survey of professional, administrative, technical, and clerical pay. This survey covers salaries paid to accountants, auditors, attorneys, job analysts, directors of personnel, chemists, engineers, engineering technicians, draftsmen, and such clerical classifications as accounting clerks, file clerks, keypunch operators, office boys, stenographers, switchboard operators, tabulating machine operators, typists, and so on." The BLS is currently conducting a survey on compensation of employees in the gas and electric industries. The results of this survey are to be published around the middle of 1968 and should provide interesting material for water utility management. Periodic employee benefit surveys are also conducted by various organizations, including the US Chamber of Commerce and the American Gas Assn. Most of these surveys are available to water utility management and can be important tools in establishing sensible and competitive salary policies. The committee now has under consideration the updating of the A WW A Employee Benefits Survey of Many water utility managers and personnel directors make their own surveys. These are confined to the jobs they are particularly interested in and to comparable utilities. Such surveys have the advantage of being specific and being current. The 1968 A WW A salary survey, along with the three previous surveys of the committee and the great amount of material available from other sources, should provide water utility management with the information necessary to establish salary policies which are competitive with salaries being paid in other industries and which will attract and retain qualified personnel for the industry. Results of the Survey The tabulations of the 1968 survey results have been completed, but it has not been possible to make a thorough analysis of the results. Therefore, this report will be of a preliminary nature and subject to changes and corrections. The survey was broken down into three sections: ( 1) salaries of managers, (2) weekly salaries of office and supervisor personnel, and (3) hourly earnings of construction, maintenance, and service personnel.

4 988 COMMITTEE REPORT Jour.AWWA The questionnaire for the managerial salary survey was designed to facilitate comparison with previous surveys. One group of fourteen tables relates the manager's salary to country, regions within the country, population served, and type of ownership. The second group of fourteen sets of tables relates the manager's salary to country, regions within the country, population served, and the number of employees supervised. The survey indicated that in the United States the weighted average annual managerial salaries varied from $5,778 for utilities serving less than 1,000 population to $20,500 for utilities serving over 250,000 population. The weighted average salary for all respondents in the United States was $10,540, with publicly owned utilities showing a weighted average salary of $10,364 and the investor-owned utilities showing $12,182, a difference of $1,818 or almost 18 per cent. The median salaries varied from $5,789 to $20,409 for the various population ranges. The annual median salary for all respondents was $9,801, with the publicly owned utilities paying a median salary of $9,667 and the investorowned utilities paying $11,042. If all the smaller utilities had been surveyed, both the weighted average and median salaries would have been considerably less. The annual median salary of $9,801, when compared to the annual median salary of $7,943 reported in the 1963 survey," would indicate an increase in managerial salaries of 23 per cent in the 5-year period, or an average of a little over 4.5 per cent per year. The increase in managerial salaries for water utility managers from 1957 to 1963 averaged 8 per cent per year. It would seem, therefore, that water utility managerial salaries have not increased as rapidly in the past 5 years as they did in the preceding 6 years, nor has the increase kept pace with the increase in engineering salaries." The weighted average managerial salaries in Canada range from $2,000 to $16,250 for the various population ranges. The median annual salary for all respondents in Canada was $10,437, as compared to $5,465 in 1963, indicating a 91 per cent increase or 18 per cent per year. Evidently water utilities in Canada are doing a much better job in bringing their managers' salaries up to a competitive position than are water utilities in the United States. In the United States, the Western area (Alaska, California, Hawaii, Oregon, and Washington) reported the highest median salary, $12,166. Second highest median salary, $10,000, was reported from the Northeastern region of the United States (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont). The lowest median salary, $8,531, was reported from the South- Central region (Arkansas, Louisiana, Oklahoma, and Texas). The second section of the survey deals with the weekly salaries of the nine most common office and supervisory classification, that is, division superintendent, foreman, accountant, bookkeeping machine operator, general office clerk, secretary, stenographer, telephone operator-receptionist, and cashier. The report will include tables relating the salaries of each classification to country, region in the country, population served, and type of ownership. Each table will show the number of employees reported for that

5 Sep.1968 CO;\fPENSATION SURVEY 989 classification under the appropriate salary bracket and for the population served and type of ownership. Each table will also show the total number of employees reported for that classification under each salary bracket. On the right hand side of each table will be a column showing the total number of employees reported for each population range; this is further broken down into the type of ownership. Four other columns will show the weighted average salary, the lower quartile, the median and the upper quartile salary for the same breakdown, as well as totals. As an example of the information obtainable from the tabulations, there were a total of 1,756 division superintendents reported in the United States, 1,516 working for publicly owned water utilities and 240 for investor-owned utilities. The weighted average weekly salary for these division superintendents ranged from $87 per week for utilities serving populations of 1,000 to 2,500 to $237 per week for those utilities serving over 250,000 people. The weighted average weekly salary for all division superintendents was $196. The total weighted average salary for all division superintendents working for publicly owned utilities was $193, while for those working for investor-owned utilities, the figure was $214, a difference of 11 per cent. All the other classifications are broken down in the same way, thus giving a great deal of valuable information. The third section of the survey concerns the hourly earnings of construetion, maintenance, and service personnel. Eight of the most common job classifications were selected for the survey. These were pipe fitter, maintenance mechanic, equipment operator, laborer, service man, meter repairman, plant operator, and meter reader, the most common jobs found in the average utility. The information reported for these eight classifications is tabulated in exactly the same manner as described for office and supervisory personnel, except the breakdowns are by hourly earnings rather than by weekly salaries. An inspection of the results for meter readers, a classification common to practically all water utilities is of interest. There were 3,150 meter readers reported in the United States, of which 2,803 were employed by publicly owned water utilities and 347 by investor-owned utilities. The weighted average hourly earnings of all meter readers reported in the United States was $2.65. Again, the investorowned utilities paid the highest salaries, or $2.94/hr while the publicly owned utilities paid $2.61/hr. The weighted average rate for laborers in the United States was $2.27/ hr, with the investor-owned utilities paying $2.65/hr and the publicly owned utilities paying $2.26/hr. In sixteen of the eighteen classifications surveyed, the investor-owned utilities paid higher wages. In the other two, the wages were the same. This would indicate that the investorowned utilities have done a much better job of meeting the competitive labor market than the publicly owned utilities. Unless many of the publicly owned utilities take steps quickly to correct this situation, they can expect to be staffed by employees who do 110t have the qualifications essential to this age of rapid expansion in service requirements and techniques. All salaries and wages were considerably higher in the West Coast re-

6 990 COMMITTEE REPORT Jour.AWWA gion than in any other. This caused the average and median pay for all classifications to be higher than it otherwise would have been. As a result, the average and median salaries of some office classifications were apparently higher than the national average for these jobs as shown by other surveys. Implications of Survey This survey demonstrates, as have the preceding ones, the extremely low and inadequate salaries being paid to the personnel of many water utilities. This is especially true in the publicly owned water utilities. Time will not permit a detailed comparison of the salaries reported in this survey with those reported in numerous other surveys showing salaries paid by other utilities and by other industries. The fact that many water utility managers are engineers, or their equivalent, but are paid 39 per cent less than engineers employed by public utilities, demonstrates the point (median 1968 salaries of water utility managers $9,801 as compared to 1967 median salaries for engineers in public utilities of $13,610).4 As pointed out by this committee previously, in many instances water utilities are being manned by unqualified personnel, simply because a lowwage policy cannot attract or retain qualified and technically trained people in today's competitive labor market. This low-wage policy may well account for the precarious position in which many water utilities find themselves today. The industry can expect to deteriorate further as long as it follows such a policy. Because poor wages appeal to neither the better college graduates nor to qualified, experienced personnel, these men are naturally going to more lucrative fields. This can only result in depriving the industry of the leadership and personnel it needs in this day of rapid expansion and improved techniques. It has been demonstrated time and again throughout industry that realistic salaries paid to attract and retain competent employees are a good investment. It is dangerous to follow any other policy, as sooner or later the community will be deprived of the good and efficient water service so essential to health, welfare, and growth. In one way or another, the public must eventually pay dearly for a shortsighted wage policy. Owners, customers, and regulatory bodies must realize that water rates must be adequate to insure good service and continued advancement-that is, adequate to pay the salaries that 'Will interest people who are qualified. The industry has a responsibility to its customers to appraise them of the value and cost of good water service. In many communities, the industry is already reaping the disastrous results of the "cheaper than dirt" policy. Recommendations The committee recommends that all water utilities make a careful study of their wage and salary policies, that they study not only the results of this survey, but other available material and determine if they are paying salaries competitive with those paid in other utilities and in other industries. and if they are paying salaries that will attract and retain qualified personnel. Of the 1,500 respondents, 23 per cent stated that the previous managers' salary surveys had been of value to them in obtaining a salary increase.

7 Sep.1968 COMPENSATION SURVEY 991 These surveys can be valuable tools if properly used. References 1. COMMITTEEREPORT. Survey on Compensation of Water Utility Managers. Jour. AWW A, 51 :1473 (Dec. 1959). 2. COMMITTEEREPORT. Survey on Compensation of Water Utility Managers. Jour. AWWA, 56:1245 (Oct. 1964). 3. COMMITTEEREPORT. Employee Benefits Paid by Water Utilities in the United States and Canada, Jour. Af,-VWA, 55 :125 (Feb. 1963). 4. Professional Engineers' Income and Salary Survey National Society of Professional Engineers, Washington, D.C. (1968). S. ASSN. OF PROFESSIONALENGRS. OF THE PROVINCE OF ONTARIO Salary Survey. The Professional Engineer and Engineering Digest (Toronto) (Feb. 1968). 6. National Survey of Professional, Administrative, Technical and Clerical Pay, June 1967, Bulletin No US Govt, Printing Office, Washington, D.C Water Utility Compensation Report Available Water Utility Salaries and Wages, 1968, is a 329-page, spiral-bound book, published by A WW A. It reports the results of the survey conducted earlier this year by the AWW A Committee on Compensation of Water Works Personnel and discussed in the preceding article. Copies are available from Publication Sales, AWWA, 2 Park Ave., New York, N.Y , $10 for AWWA members and $20 for nonmembers.