Question

The department of labor has two ways of counting the employed: the Establishment (Or Payroll) Survey and the Household Survey. Which of the following are characteristics of the Establishment Survey?

- Covers all workers including self-employed

- Only counts wage and salary workers on payrolls

- Tends to undercount job creation among newly created companies

- tends to overstate the robustness of the economy

Answer 1

An establishment survey only counts wages and salary workers on the payroll. Tends to understate the robustness of the economy and undercount job creation among newly created companies.

Establishment survey only counts the employees which are getting paid for the job. If the person is working from home or if it's self-employed it is left out. It understates the robustness of economy because it doesn't count agriculture jobs which are not on a payroll, house helps etc. It also didn't count jobs in newly created companies if they are not salaried (main reason maybe they are not making enough profit at that point like startups Family business etc.)

The characteristics of the establishment survey are, count only wage and salaried workers, Tends to undercut job count.