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REPORT TO CONGRESS

SALINAS-MONTEREY, CALIFORNIA, FEDERAL WAGE SYSTEM WAGE AREA

As mentioned earlier in this report, the Civil Service Commission defined the original FWS wage area boundaries in 1972 based on recommendations of FPRAC. FPRAC developed criteria for establishing and maintaining FWS wage areas on a consistent basis across the country. These criteria allow for a reasonable degree of flexibility, but are applied consistently throughout the pay system to ensure that similarly situated FWS employment sites are treated in as similar a manner as possible.

OPM has abolished FWS wage areas in the past based on the advice of FPRAC only when a lead agency no longer has the ability to conduct local wage surveys in the area or the lead agency consistently is unable to collect sufficient wage data in the area to meet survey adequacy requirements set by OPM. The criteria for establishing a wage area take into account FWS employment and private sector employment in an area.

Under 5 CFR 532.211(c), OPM establishes wage areas when–

(1) A minimum of 100 wage employees of one agency are subject to the regular schedule, and the agency involved indicates that its local installation has the capacity to do the survey; and

(2) There is, within a reasonable commuting distance of the concentration of Federal employment–

     (i) A minimum of 20 establishments (within survey specifications) having at least 50 employees each or 10 establishments having at least 50 employees each, with a combined total of 1,500 employees; and

     (ii) The total private enterprise employment in the industries surveyed in the survey area is at least twice the Federal wage employment in the survey area.

Salinas-Monterey meets criterion (1) because–

• The Salinas-Monterey wage area's host activity, the Naval Postgraduate School in Monterey, CA, has approximately 120 FWS employees and has the capacity to conduct local wage surveys in the Salinas-Monterey wage area.

Salinas-Monterey meets criterion (2) because–

• Within the survey area of the Salinas-Monterey wage area–

     (i) 69 private industrial establishments exist with 50 or more employees (within survey specifications), with a combined total of approximately 19,686 employees; and

     (ii) The total private enterprise employment in industries surveyed in the survey area is 247 times greater than the FWS employment in the survey area.

• The Salinas-Monterey survey area has more than a sufficient amount of private industrial establishments and private enterprise employment in the surveyable industries to qualify as an FWS wage area.

The two maps on the following pages show the distribution of FWS employees in and around the Salinas-Monterey wage area.

Based on the recommendations of FPRAC, OPM provides guidelines for determining the adequacy of wage survey data at 5 CFR.532.239(b)(1). Ordinarily, we consider a survey to provide adequate wage survey data when the results include data for–

• 1 survey job in the WG-1 through WG-4 range with 20 or more samples,
• 1 survey job in the WG-5 through WG-8 range with 20 or more samples,
• 2 survey jobs in the WG-9 through WG-15 range with 20 or more samples, and
• 6 other survey jobs with 10 or more samples in any grade range.

  The chart below provides the wage survey data for the Salinas-Monterey wage area obtained by DOD during its most recent survey.

  Wage Survey Data for the Salinas-Monterey Wage Area
  Job Title	Federal Grade	Observations
  Janitor (Light)	1	34
  Janitor (Heavy)	2	63
  Material Handler	2	18
  Forklift Operator	5	372
  Mat. Hand. Equip. Oper.	5	26
  Warehouse Worker	5	45
  Truckdriver (Medium)	6	16
  Truckdriver (Heavy)	7	155
  Automotive Mechanic	10	45
  Electrician	10	20
  Welder	10	25

  Local wage surveys in the Salinas-Monterey wage area have consistently met the criteria agreed upon by the labor and management members of FPRAC to remain a separate wage area. However, if local wage surveys in the Salinas-Monterey wage area prove to be inadequate under these criteria in the future, OPM has regulatory flexibilities to address survey adequacy problems. As a last resort, OPM may abolish a wage area and combine its constituent counties if, over a period of time, it proves impossible for DOD to determine local prevailing rates in the wage area.

  While OPM has never abolished a wage area with a viable host installation that continues to meet survey adequacy requirements, OPM has made certain minor changes in wage area boundaries from time to time. In prior system-wide reviews of FWS wage area boundaries, the members of FPRAC have used OPM's regulatory criteria to analyze individual counties to determine whether minor changes in wage area definitions are appropriate.

  Under 5 CFR 532.211(d), OPM may combine adjacent economic communities or political units meeting the separate wage area criteria by considering the following factors:

  (1)  Distance, transportation facilities, and geographic features.
  

  A distance of 115 miles (185 kilometers) separates the city of Monterey from the city of San Francisco. The major FWS employment sites, Camp Roberts and the Naval Postgraduate School, are 200 miles (322 kilometers) and 115 miles (185 kilometers), respectively, from San Francisco.

  An Interstate highway connects the Salinas-Monterey and San Francisco survey areas, and no geographic features present significant obstacles to travel between the two wage areas.

  (2)  Commuting patterns.

  The following two maps show the percentage of workers commuting into the Salinas-Monterey and San Francisco survey areas based on 1990 commuting patterns census data. The maps show very little linkage between the Salinas-Monterey and San Francisco FWS wage areas based on commuting pattern data.

  Commuting patterns indicate that 92 percent of the resident workforce in the Salinas-Monterey survey area lives and works in the Salinas-Monterey survey area (Monterey County) and that only 2 percent of the resident workforce in the Salinas-Monterey survey area commutes to work in the San Francisco survey area. Sixteen counties not currently included in the San Francisco wage area have similar or higher percentages of their resident workforces commuting to jobs in the San Francisco survey area when compared to Monterey County.

  We received information from representatives of employees at the Naval Postgraduate School that larger numbers of people are expected to commute within the four-county area of Monterey, San Benito, Santa Clara, and Santa Cruz Counties in the future. The Association of Monterey Bay Area Governments predicts that the Monterey Bay area will experience a steady increase in population, jobs, and housing through 2020. OPM's review of commuting patterns is hampered at this time because of the lack of available data on commuting from the 2000 census. While we do not have sufficient information to indicate that there is a significant linkage between the Salinas-Monterey and San Francisco FWS wage areas at this time, we will be able to assess this factor more completely after we receive new census data next year.

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  (3)  Similarities in overall population, employment, and the kinds and sizes of private industrial establishments.

  The chart below compares the overall population, employment, and the kinds and sizes of private industrial establishments in the Salinas-Monterey and San Francisco survey areas.

  Overall Populations, Employment, and the Kinds and Sizes of Private Industrial Establishments in the Salinas-Monterey and San Francisco Survey Areas
  Survey Area	Population	Manufacturing			Transportation/ Communications/ Utilities		Wholesale Trade
  	Total Workforce	Employment All Size Groups	# of 50+ Establish- ments		Employment All Size Groups	# of 50+ Establish- ments	Employment All Size Groups	# of 50+ Establish- ments
  Salinas-Monterey, CA	355,660	6,751	24		4,935	19	8,000	26
  	99,599
  San Francisco, CA	5,635,355	387,704	1,276		156,607	471	189,555	671
  	2,810,721

  These data show that the survey areas are markedly different, with the San Francisco survey area having a population more than 15 times greater and a total workforce more than 28 times greater than the Salinas-Monterey survey area. Employment in manufacturing establishments in the San Francisco labor market is more than 57 times greater than in the Salinas-Monterey labor market; employment in transportation, communications, and utilities establishments is more than 31 times greater; and employment in wholesale establishments is more than 23 times greater.

  In addition, the following chart shows the survey area's distribution of private sector employment in the manufacturing, transportation, and wholesale trade sectors.

  	PERCENTAGE OF SURVEYABLE EMPLOYMENT IN:
  	MANUFACTURING	TRANSPORTATION AND PUBLIC UTILITIES	WHOLESALE TRADE
  Salinas-Monterey Survey Area	34%	25%	41%
  San Francisco Survey Area	53%	21%	26%

  These data show that the survey areas also have different distributions of private sector employment in surveyable industries. The Salinas-Monterey survey area has a higher proportion of employment in the wholesale trade sector than the San Francisco survey area, while the San Francisco survey area's proportion of employment in the manufacturing sector almost doubles that of the Salinas-Monterey survey area. With such dissimilar industrial and employment patterns, we do not believe it would be appropriate to base pay rates for FWS employees in the Salinas-Monterey wage area on prevailing rates in the San Francisco survey area.

  The Local Wage Survey Committee for the Salinas-Monterey wage area expressed concern that there are not enough private industrial establishments in the Salinas-Monterey wage area to serve as a viable survey base and that the establishments in the wage area are primarily associated with the manufacture and distribution of food products. However, FWS wage surveys in the Salinas-Monterey and San Francisco wage areas include establishments in the manufacturing; transportation, communications, electric, gas, and sanitary services; and wholesale trade industries. As can be seen in the chart above, the Salinas-Monterey wage area does not have the same industrial base as the San Francisco wage area, but the number of establishments in the Salinas-Monterey wage area is sufficiently varied to meet OPM's regulatory criteria for determining local prevailing rates. The Local Wage Survey Committee's position in this respect is in conflict with OPM's criteria for wage survey adequacy. While OPM could change its criteria for system-wide survey adequacy based on an FPRAC recommendation, we have not had an indication from the Committee that the criteria are flawed. Any changes in these criteria would have system-wide ramifications for the pay system which are beyond the scope of this report. The Committee has not expressed a desire to revisit the appropriateness of the survey adequacy criteria.

  In reviewing FWS wage areas, OPM considers changes in Metropolitan Statistical Areas (MSAs) and Primary Metropolitan Statistical Areas (PMSAs). Under OPM's regulations, wage area boundaries will not split MSA boundaries except in unusual circumstances. The next map shows the current metropolitan areas as defined by the Office of Management and Budget (OMB) in and around the Salinas-Monterey wage area. The Salinas-Monterey wage area includes one MSA-the Salinas, CA MSA. The Salinas-Monterey wage area boundary does not split the boundary of any MSA. As shown on the following map, the OMB MSA and PMSA definitions consider the primary portions of the Salinas-Monterey and San Francisco wage areas to be separate entities.

   

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