How the American Worker Index Works

The Four Domains

Every input series belongs to one of four domains, and every domain carries the same weight. The weight rule is structural, not fitted: equal domains: full-coverage weight = 1/len(DOMAIN_IDS); published composite = unweighted mean of present domains; zero hand-typed weights.

The Math

Percentile normalization

Each series is converted to a percentile within its own full quarterly history, in one pass. That is the Hazen percentile: rank every quarter of the series, average tied ranks, subtract half a rank, divide by the series length. The engine’s own statement of the rule: Hazen percentile per series over its entire available quarterly history in one pass: (average_rank - 0.5) / n * 100, ties averaged. One yardstick, shared with the ADI/SDI/CDI family.

Direction is read from each input’s data file, never assumed: Every input's direction field is read from its JSON; lower_is_worse values are negated before ranking so higher always means worse for the worker. A missing or unexpected direction aborts the build.

De-trended pay

The paycheck series would drift upward forever on a raw-level percentile — a record real wage would read as favorable. So the three Paycheck members enter as growth, not level: the three Paycheck members (real production wage, real median weekly earnings, productivity-pay wedge) enter as 5-year annualized % growth before ranking — de-trending the wage series so a record real level does not read as favorable, and answering the trending-percentile critique

Aggregation

A domain’s score at quarter T is the mean of its member percentiles present at T. The composite is the mean of the four domain scores. There are no fitted weights anywhere in the chain.

What the composite is, and is not

The composite is a mean of input percentiles. It is not itself a percentile of quarters. The two read differently on purpose: the current composite of 65.8 carries the gloss “On average, the American worker's inputs sit worse than in 66% of their own quarterly histories,” while the composite’s own rank in the published record is stated separately — The composite itself sits higher than 87% of all published quarters since 1948. The two numbers answer different questions, and the index publishes both so neither gets quoted as the other.

The Five Bands

The 0–100 scale splits into five equal bands. The thresholds are uniform — not calibrated to any narrative period — and the labels are an editorial decision, severity ascending with the band number. The engine’s usage rule: the labels describe the national time axis and always publish with the literal mean-of-input-histories reading; higher bands mean a worse position for the worker.

The Record Since 1948

The published series holds its worst readings and its best against the worker’s own postwar record — peaking at 85.9 in 2011-Q4 and bottoming at 10.0 in 1953-Q2. Nothing in the method points at those quarters; they emerge from ranking each series against its own record.

Data Rules

Missing data

• no imputation of an absent member within a quarter; a domain scores on the members present
• no cross-series interpolation; annual members carry a real published value forward under the annual_carry_rule
• a quarter with fewer than the publication minimum of domains is not published
• the published tail is trimmed to the last full-member quarter
• orientation and direction are read from each member JSON, never hardcoded here

Annual members and the trailing edge

Two members arrive once a year, not four times. The carry rule keeps them honest: annual members (family income Gini, union membership) are step-carried across their release year and up to 4 further quarters, superseded by the next annual release — a documented carry of a real published value, never an interpolation.

And the published tail is trimmed so the latest reading is never a ragged partial edge: the published series is trimmed at the tail to the last quarter carrying the full current member set, so the latest reading is never a ragged partial edge; interior partial-member quarters are kept.

Publication gate

The engine refuses to publish a quarter rather than publish a partial one. The rule: publish a quarter only when at least 3 of the 4 domains have a present member; the composite is the equal-weight mean of the domains present. Every run also re-proves a set of validation gates — weights, label vocabulary, orientation, series-seam integrity, and reproducibility — and writes nothing if any gate fails.

Revisions and vintages

Inputs are revised series (BLS, BEA, and Federal Reserve constructs via FRED, plus the spliced union-membership series). Historical AWI values are computed on today's revised vintages. Every run restates the full history: the percentile yardstick grows by one quarter per refresh and upstream revisions re-rank past quarters. No out-of-sample claim is made for any historical reading, and the index makes no forecast.

Every refresh restates the full history on today's revised source vintages; the percentile yardstick grows by one quarter per run.

Limitations

The AWI is a national time-series composite. It measures the American worker’s position against the worker’s own postwar record; it does not score individual states, counties, or demographic groups. A high reading does not say which workers are worst off, only that the population-level signal sits high in its own record.

The percentile method reads each series against its own published history. Quarters early in a series’ record have fewer comparison points, and every refresh restates history by small amounts as the yardstick grows. The index treats that restatement as a feature — the alternative, freezing a baseline window, would make the scale depend on a chosen era.

The AWI is not a forecast of wages, employment, or any future outcome. It measures current conditions against the historical record and makes no claim about what comes next.

The American Worker Index is the worker-conditions member of the index family. ADI ranks the nation's present quarter against its own history; SDI and CDI rank places; AWI ranks the American worker's present quarter against 1948-present. Same Hazen transform, same orientation rule, same equal-weight-domain shape.

Replication

The full scoring pipeline is open source. The production engine is at scripts/indexes/compute_worker_index.py, the shared percentile transform at scripts/indexes/family_normalization.py, and the independent validator at scripts/indexes/validate_worker_index.py. All are Python with no dependencies beyond the standard library and numpy.

Source data

9 series, all freely available federal and Federal Reserve data:

FRED attribution

Per FRED’s terms of service, source attribution is required for any FRED-derived series: “[Source Agency], [Full Series Title] [SERIES_ID], retrieved from FRED, Federal Reserve Bank of St. Louis.” Users replicating the index should include the appropriate FRED citation per series. FRED data may not be used for AI/ML training, per the same terms.

License

The AWI score, methodology, and underlying scoring code are released under the Creative Commons Attribution 4.0 license. Reuse is free, commercial use is permitted, and the only obligation is attribution to American Default Research with a link to https://americandefault.org/methodology/awi/.

How to Cite

The American Worker Index is an open data product released under Creative Commons Attribution 4.0. If you use it in research, policy analysis, or journalism, please cite American Default Research as the source.

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Change Log

Substantive methodology changes are recorded here with the date applied. Routine quarterly data refreshes (which update scores but not methodology) are not change-log events.

• 2026-07-12 Band labels aligned with the national time-series contract: Minimal, Low, Typical, High, and Severe. Scores, thresholds, inputs, and historical values did not change.
• 2026-07-07 American Worker Index published under the family-v1 method with Hazen normalization, four equal-weighted domains, refuse-to-publish gates, and five equal score segments. Methodology page /methodology/awi/ first published as the canonical reference.