The Wall Street Journal Article, “How Big Data Is Creating a Detailed Picture of U.S. Earnings” discusses Glassdoor, the job “review” site, on a whole, with an emphasis on the salary data it collects as a required entry for site users, and how it uses those estimates to create an unbiased, non-government issued, forecast of American wage growth.
As an Economics major (and junkie), I find Glassdoor’s analysis of wage growth based upon its (vast) user-base’s data to be a very efficient—and honest—use of the data. Allow me to explain this perspective.
Glassdoor users utilize the website to write an anonymous “review” of their employer compare their employment title and salary against those of similar employees within their same company, peer companies, or across their respective industry. In order for these users to get accurate answers (answers that raise their awareness), they need to input their information correctly, and the disclosure of their salary is required. This builds to the previously made point on honesty.
As an applied macroeconomist, I frequently interact with wage data, especially the data issued from the Bureau of Labor Statistics (BLS); I often get confused with what data series to analyze and how to interpret it (and I study this field, so imagine the confusion of people without sufficient economics training). Moreover, this data only talks about hourly and weekly earnings, not salaries on a whole.
Glassdoor’s salary data provides a very insightful, and easily interpreted, view into the direction of salaries, all derived directly from mining their user’s information. And since it can be localized and refined to focus on only certain industries, it allows people the ability to more easily see the trend of wages in different parts of the country and job markets, components that are often left out of BLS data.
All this said, Glassdoor’s also data serves as a “check” for government-issued statistics. Since some people—for one reason or another—are skeptical of government data and whether or not its been “massaged”, Glassdoor’s data can serve as a cross-reference.
Glassdoor’s forecasting of salaries is just one of many uses of the Web’s data that benefits both the public and private sectors in efficient planning and decision-making. Data, and forecasts, like those provided by Glassdoor can become very useful and telling when discussing an appropriate course of action for, say, monetary policy. If the government is for the people, then it should utilize the actual, real-time, data of its people in designing and implementing effective policy. But,not to be so humorous in a post discussing wages and labor, that might put folks out of a job!
Article Source: http://blogs.wsj.com/economics/2016/11/04/how-big-data-is-creating-a-detailed-picture-of-u-s-earnings/